Exhibit 10.2

 

 

INSURANCE AND INDEMNITY AGREEMENT

Dated as of August 31, 2005

Among

AMBAC ASSURANCE CORPORATION,

as Insurer,

MVL FILM FINANCE LLC,

as Borrower,

MARVEL ENTERPRISES, INC.,

MARVEL STUDIOS, INC.,

MVL PRODUCTIONS LLC,

MVL RIGHTS LLC,

and

HSBC BANK USA, NATIONAL ASSOCIATION,

as Collateral Agent

 

 

 

 

TABLE OF CONTENTS

This Table of Contents is for convenience of reference only and shall not be
deemed to be part of this Insurance Agreement. All capitalized terms used in
this Insurance Agreement and not otherwise defined shall have the meanings set
forth in Article I of this Insurance Agreement.

Page

ARTICLE I  DEFINITIONS

2

 

Section 1.01.

Defined Terms

2

 

Section 1.02.

Other Definitional Provisions

5

ARTICLE II  REPRESENTATIONS, WARRANTIES AND COVENANTS

5

 

Section 2.01.

Representations and Warranties of the Borrower, Marvel Studios and MPROD;
Acknowledgement of MRL

5

 

Section 2.02.

Affirmative Covenants of the Borrower, MEI, Marvel Studios, MRL and Landlord

5

 

Section 2.03.

Negative Covenants of the Borrower, Marvel Studios and MPROD

7

 

Section 2.04.

Representations, Warranties and Covenants of the Insurer

8

ARTICLE III  THE POLICY; REIMBURSEMENT

9

 

Section 3.01.

Issuance of the Policy

9

 

Section 3.02.

Payment of Fees and Premium

11

 

Section 3.03.

Reimbursement Obligation

12

 

Section 3.04.

Indemnification with respect to the Borrower, Marvel Studios, MPROD, the Insurer
and the Collateral Agent

14

 

Section 3.05.

Payment Procedure

16

 

Section 3.06.

Joint and Several Liability

17

 

Section 3.07.

Performance Support

17

ARTICLE IV  FURTHER AGREEMENTS

19

 

Section 4.01.

Effective Date; Term of the Insurance Agreement

19

 

Section 4.02.

Corrective Instruments

20

 

Section 4.03.

Obligations Absolute

20

 

Section 4.04.

Assignments; Reinsurance; Third-Party Rights

21

 

Section 4.05.

Liability of the Insurer

22

ARTICLE V  DEFAULTS AND REMEDIES

22

 

Section 5.01.

Defaults

22

 

Section 5.02.

Remedies; No Remedy Exclusive

23

 

Section 5.03.

Waivers

24

i

 

 

ARTICLE VI  MISCELLANEOUS

25

 

Section 6.01.

Amendments, Etc.

25

 

Section 6.02.

Notices

25

 

Section 6.03.

Severability

26

 

Section 6.04.

Governing Law

26

 

Section 6.05.

Consent to Jurisdiction

27

 

Section 6.06.

Consent of the Insurer

27

 

Section 6.07.

Counterparts; Delivery by Facsimile

27

 

Section 6.08.

Headings

28

 

Section 6.09.

Limited Liability

28

 

Section 6.10.

Entire Agreement

28

 

Section 6.11.

Limited Recourse

28

 

Section 6.12.

Third Party Beneficiary

28

 

Section 6.13.

Authorization and Action of the Collateral Agent

29

 

Section 6.14.

WAIVER OF TRIAL BY JURY

29

 

 

Exhibit A

-

Form of Policy

 

Schedule 3.07

-

Covered Obligations

 

 

ii

 

 

INSURANCE AND INDEMNITY AGREEMENT (this “Insurance Agreement”), dated as of
August 31, 2005, by and among AMBAC ASSURANCE CORPORATION, a Wisconsin stock
insurance company (“Ambac”), as the Insurer, MVL FILM FINANCE LLC, a Delaware
limited liability company (the “Borrower”), MARVEL ENTERPRISES, INC., a Delaware
corporation (“MEI”), MARVEL STUDIOS, INC., a Delaware corporation (“Marvel
Studios”), MVL PRODUCTIONS LLC, a Delaware limited liability company (“MPROD”),
MVL RIGHTS LLC, a Delaware limited liability company (“MRL”), and HSBC BANK USA,
NATIONAL ASSOCIATION, in its capacity as collateral agent for the benefit of the
Lenders under the Credit Agreement referred to below (together with any
successor in interest or any successor collateral agent appointed in accordance
with the Credit Agreement, the “Collateral Agent”).

PRELIMINARY STATEMENTS

WHEREAS, pursuant to that certain Credit and Security Agreement dated as of
August 31, 2005 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”) by and among the Borrower,
the Lenders and the other lenders party thereto, General Electric Capital
Corporation, as Administrative Agent, and the Collateral Agent, the Lenders have
agreed to make Class A Advances to the Borrower in an aggregate principal amount
at any one time outstanding not to exceed $465,000,000;

WHEREAS, pursuant to that certain Exclusive Cross License Agreement dated as of
August 31, 2005 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “License Agreement”) by and between MRL and the
Borrower, MRL licensed to the Borrower the Rights (as defined therein);

WHEREAS, pursuant to that certain Master Development and Distribution Agreement
dated as of August 31, 2005 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Master Agreement”) by and between the
Borrower, MPROD and Marvel Studios, the Borrower licensed to MPROD certain of
its rights acquired under the License Agreement, MPROD agreed to undertake on
behalf of the Borrower certain responsibilities with respect to the
pre-production, development, supervision of production, delivery and
distribution of Pictures (as defined in the License Agreement);

WHEREAS, MPROD intends to enter into from time to time a number of production
agreements (each, a “Production Services Agreement”) with affiliates of itself
and MRL for the production and delivery of such Motion Pictures;

WHEREAS, pursuant to the Credit Agreement, the Borrower has granted to the
Collateral Agent, for the benefit of the Secured Parties, a security interest in
all of the Borrower’s assets, whether now owned or hereafter arising (the
“Collateral”), to secure the prompt and complete repayment of amounts owing
under, and observance and performance of, the Credit Agreement and the
Borrower’s other Obligations from time to time, including its Obligations under
this Insurance Agreement;

 

 

 

 

WHEREAS, in connection with the production of each individual Motion Picture
pursuant to each Production Services Agreement, the Insurer, MPROD, the
Completion Guarantor and a number of other interested parties will enter into an
interparty agreement (each, an “Interparty Agreement”);

WHEREAS, the Insurer is authorized to transact a financial guaranty insurance
business in the State of New York;

WHEREAS, the Borrower has requested that the Insurer issue to the Collateral
Agent (together with its successors and permitted assigns, the “Insured Party”),
for the benefit of the Lenders, a Certificate Guaranty Insurance Policy in
substantially the form of Exhibit A hereto, payable to the Insured Party and
guaranteeing, to the extent and limited as set forth therein, the timely payment
of interest and Unused Commitment Fees on the Class A Advances and the payment
of the Outstanding Amount of the Class A Advances on the Legal Final Maturity
Date; and

WHEREAS, the Insurer, the Borrower, MEI, Marvel Studios, MPROD, MRL and the
Collateral Agent desire to specify the conditions precedent to the issuance by
the Insurer of the Policy and to provide for certain other matters related
thereto;

NOW, THEREFORE, in consideration of the premises and of the agreements herein
contained, the undersigned hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.02. Defined Terms. Unless the context clearly requires otherwise, all
capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Policy or, if not defined therein, in the Credit
Agreement or the Master Agreement. For purposes of this Insurance Agreement, the
following terms shall have the following meanings:

“Borrower Affiliate” means MEI, Marvel Studios, MRL and MPROD.

“Business Day” means any day that is not a Saturday, a Sunday or other day on
which commercial banking institutions in New York City are authorized or
obligated by law or order to be closed.

“Closing Date” means September 1, 2005.

“Covered Obligations” has the meaning set forth on Schedule 3.07 hereto.

“Default” means any event which results, or which with the giving of notice or
the lapse of time or both would result, in an Event of Default.

“Event of Default” means any event of default specified in Section 5.01.

 

2

 

“Excluded Damages” shall mean any and all indirect, punitive, incidental or
consequential claims, damages, losses, costs, expenses, liabilities and
penalties arising out of or in connection with any breach or alleged breach,
violation, default or potential default or other failure of the Covered
Obligations; provided, however, that for purposes of this definition only, in
connection with direct damages (which shall be the only damages for which MEI
shall be liable (including, without limitation, in connection with a breach by
MEI of any Covered Obligation)) arising out of a Covered Obligation, the
foregoing definition shall not exclude incremental damages reasonably and
directly attributed to such breach and incurred as a component of the direct
damages (for example, a payment to the wrong party shall be the direct damage
and the interest on such misdirected payment and the actual and verifiable out
of pocket costs and expenses incurred to recover such payment amount shall be
the incremental damage). Notwithstanding the foregoing to the contrary, any
failure to pay amounts due under the Credit Agreement as a result of the failure
of any Motion Picture to generate gross receipts sufficient to allow the
Borrower to make such payments when due and owing shall constitute Excluded
Damages.

“Insurer” shall mean Ambac Assurance Corporation, a Wisconsin stock insurance
company, or any successor thereto.

“Investment Company Act” means the Investment Company Act of 1940, including,
unless the context otherwise requires, the rules and regulations thereunder, as
amended from time to time.

“Late Payment Rate” shall mean the lesser of (i) the greater of (a) the per
annum rate of interest publicly announced from time to time by Citibank, N.A. as
its prime or base lending rate (any change in such rate of interest to be
effective on the date such change is announced by Citibank, N.A.), plus 2.00%,
and (b) the then applicable highest rate of interest on the Class A Advances
pursuant to the Credit Agreement and (ii) the maximum rate permissible under
applicable usury or similar laws limiting interest rates. Interest at the Late
Payment Rate shall be computed on the basis of a 360-day year and the actual
number of days elapsed in the related accrual period.

“Lenders” means the Class A Lenders (as such term is defined in the Credit
Agreement).

“Material Adverse Change” means, in respect of any Person, a material adverse
change in the ability of such Person to perform its obligations under any of the
Operative Documents to which it is a party, including any material adverse
change in the business, financial condition, results of operations or properties
of such Person on a consolidated basis with its subsidiaries (other than as may
result solely from the performance of the Completed Films).

“MEI Covenant Letter” means the letter agreement dated August 31, 2005 made by
and among MEI, Marvel Studios and Marvel Characters, Inc. in favor of the
Insurer, the Borrower and the Lenders.

 

 

 

 

3

 

 

“Moody’s” means Moody’s Investors Service, Inc., and any successor thereto.

“Operative Documents” means this Insurance Agreement, the Credit Agreement, the
Notes, the License Agreement, the Master Agreement, the Interparty Agreements,
the Production Services Agreements, each Completion Bond (including, without
limitation, each producer’s completion agreement executed in connection
therewith), the Distribution Agreements, the Master Distributor Security
Agreement, each Master Distributor Security Agreement Supplement, the Access
Letters, the Viacom Guaranty, each Laboratory Pledgeholder Agreement, the MEI
Services Letter Agreement dated as of the date hereof and the MEI Covenant
Letter.

“Person” means an individual, joint stock company, trust, unincorporated
association, limited liability company, joint venture, corporation, business or
owner trust, partnership or other organization or entity (whether governmental
or private).

“Policy” means the Certificate Guaranty Insurance Policy, No. AB0919BE, together
with all endorsements thereto, issued by the Insurer in favor of the Insured
Party.

“Premium” means the premium payable in accordance with the Policy and Section
3.02(c) of this Insurance Agreement as, when and in the amounts specified in the
Premium Letter.

“Premium Letter” shall mean the premium letter dated as of the date hereof by
and between the Borrower and the Insurer, as amended, amended and restated,
supplemented or otherwise modified from time to time.

“Reimbursement Amount” shall mean, as of any date of determination, the sum of
(i) all Insured Payments paid by the Insurer and all other amounts then due and
owing to the Insurer under the Insurance Agreement and the other Operative
Documents (without duplication), but for which the Insurer has not been
reimbursed prior to such date, plus (ii) interest accrued thereon, calculated at
the Late Payment Rate from the date on which the Trustee received the related
Insured Payments.

“Relevant Parties” means, collectively, Borrower, Marvel Studios, MRL and MPROD.

“Securities Act” means the Securities Act of 1933, including, unless the context
otherwise requires, the rules and regulations thereunder, as amended from time
to time.

“Securities Exchange Act” means the Securities Exchange Act of 1934, including,
unless the context otherwise requires, the rules and regulations thereunder, as
amended from time to time.

“S&P” means Standard & Poor’s, a division of The McGraw Hill Companies, Inc. and
any successor thereto.

“Specified Covered Obligations” means those Covered Obligations designated as
“Specified Covered Obligations” in paragraph D of Schedule 3.07.

 

 

 

4

 

 

“Transaction” means the transactions contemplated by the Operative Documents.

Section 1.02. Other Definitional Provisions. The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Insurance Agreement
shall refer to this Insurance Agreement as a whole and not to any particular
provision of this Insurance Agreement, and Section, subsection, Schedule and
Exhibit references are to this Insurance Agreement unless otherwise specified.
The meanings assigned to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms. The words “include” and
“including” shall be deemed to be followed by the phrase “without limitation.”
Each reference herein to a specific section number of any Operative Document
shall be deemed to refer to any successor provision of such document, as
applicable, following any amendment or modification thereof.

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 2.01. Representations and Warranties of the Borrower, Marvel Studios and
MPROD; Acknowledgement of MRL.

(a)       The Borrower hereby makes, to and for the benefit of the Insurer, each
of the representations and warranties of the Borrower set forth in Section 6.01
of the Credit Agreement, in Section 6 of the Master Agreement, and in Section 16
of the License Agreement. Marvel Studios hereby makes, to and for the benefit of
the Insurer, each of the representations and warranties of Marvel Studios set
forth in Section 12(d) of the Master Agreement. MPROD hereby makes, to and for
the benefit of the Insurer, each of the representations and warranties of MPROD
set forth in Section 6 of the Master Agreement. Such representations and
warranties are hereby incorporated herein by this reference as if fully set
forth herein and are hereby reconfirmed in favor of the Insurer (solely by each
such party with respect to itself), and shall be deemed to be reconfirmed
hereunder each time such representations and warranties are made or deemed made
under the Credit Agreement, the Master Agreement, and/or the License Agreement.

(b)      MRL hereby acknowledges that (i) the License Agreement and all rights
of the Borrower thereunder have been pledged by the Borrower to the Collateral
Agent for the benefit of, among other Persons, the Insurer, and (ii) the
Insurer, as Control Party, has the right to instruct the Collateral Agent to
exercise its power of attorney granted pursuant to the Credit Agreement to cause
the Borrower to enforce its rights and remedies against MRL with respect to each
of the representations, warranties and covenants of MRL set forth in the License
Agreement. In connection therewith, the Insurer acknowledges that neither it,
the Collateral Agent nor the Borrower has any recourse to any assets of MRL
pursuant to the License Agreement other than the Rights (as defined therein).

Section 2.02. Affirmative Covenants of the Borrower, MEI, Marvel Studios, MRL
and MPROD.

 

 

 

5

 

 

(a)           Incorporation by Reference. The Borrower hereby makes, to and for
the benefit of the Insurer, each covenant of the Borrower set forth in Sections
7.01 and 7.02 of the Credit Agreement and Section 16 of the License Agreement,
each of which is hereby incorporated herein by reference and shall be complied
with by the Borrower unless the Insurer shall otherwise consent in writing.
MPROD hereby makes, to and for the benefit of the Insurer, each covenant of
MPROD set forth in Section 7(a) of the Master Agreement, which is hereby
incorporated herein by reference and shall be complied with by MPROD unless the
Insurer shall otherwise consent in writing. Marvel Studios hereby makes, to and
for the benefit of the Insurer, each covenant of Marvel Studios set forth in
Section 12(a) of the Master Agreement, which is hereby incorporated herein by
reference and shall be complied with by the Marvel Studios unless the Insurer
shall otherwise consent in writing.

(b)           Payment of Taxes, Etc. Marvel Studios will pay and discharge or
otherwise satisfy, before the same shall become delinquent or subjected to
penalty, all Taxes imposed upon it or its property which are due, except (i)
where the amount or validity thereof is currently being contested in good faith
by appropriate proceedings, if any, and reserves in conformity with GAAP with
respect thereto have been provided on the books and records of Marvel Studios or
any consolidated group to which Marvel Studios is a party until any Lien
resulting therefrom attaches to its property and becomes enforceable against
other creditors, or (ii) the failure to pay and discharge or otherwise satisfy
such Taxes could not, individually or in the aggregate, reasonably be expected
to cause a Material Adverse Change with respect to Marvel Studios.

(c)           Access to Financial and Collateral Information. (i) The Borrower
hereby makes, to and for the benefit of the Insurer, the covenant set forth in
Section 7.01(d) of the Credit Agreement, which is hereby incorporated herein by
reference and shall be complied with by the Borrower unless the Insurer shall
otherwise consent in writing. MPROD (A) hereby makes, to and for the benefit of
the Insurer, the covenant set forth in Section 7(a)(iv)(A) of the Master
Agreement and (B) shall cause each Production Company (as defined in the Master
Agreement) to comply with the audit provisions set forth in Section 15C (or any
successor provision) of the related Production Services Agreement, each of which
is hereby incorporated herein by reference and shall be complied with by MPROD
unless the Insurer shall otherwise consent in writing.

(ii)            In order to allow the Insurer to confirm the correctness of
information obtained in the course of audits performed pursuant to clause (c)(i)
above and to diligence compliance with the MEI Covenant Letter, during regular
business hours, upon reasonable advance notice (which shall indicate the
proposed scope of the review) and at reasonable times so as not to interfere
with its business operations, each of MEI and Marvel Studios and, with respect
to diligence of compliance with the MEI Covenant Letter only, MRL will permit
the Insurer or its agents, representatives or accountants, at the expense of the
Insurer (A) to examine and make copies of and abstracts from all books, records
and

 

 

 

6

 

 

documents (including computer tapes and disks) in its possession or under its
control relating to the Operative Documents, Ancillary Documents or any
Collateral, and (B) to visit its offices and properties for the purpose of
examining such materials described in clause (A) above, and (in the case of MRL
as limited above) to discuss matters relating to the Operative Documents,
Ancillary Documents and the Collateral and its performance hereunder or
thereunder with any of its executive officers or its Authorized Officers having
knowledge of such matters or their accountants; provided, that so long as no
Event of Default or Potential Event of Default has occurred and is continuing,
Borrower shall only be responsible for the cost of one (1) such visitation and
inspection per Interest Period; and provided, further, that the Insurer shall,
to the extent that it is reasonably possible for the Insurer to do so, conduct
such visitations, inspections and discussions with respect to the Borrower and
all of its Affiliates under clause (c)(i) above and this clause (c)(ii) at the
same time and in the same location in order to minimize interference with the
business operations of the Marvel Companies.

Section 2.03. Negative Covenants of the Borrower, Marvel Studios and MPROD.

(a)           The Borrower, Marvel Studios and MPROD each hereby agrees with
respect to itself that during the term of this Insurance Agreement, unless the
Insurer shall otherwise expressly consent in writing,

(i)             Impairment of Rights. Neither the Borrower, Marvel Studios nor
MPROD shall take any action, or fail to take any action, if such action or
failure to take action would be reasonably likely to result in a Material
Adverse Change with respect to the Borrower or the Rights (as defined in the
License Agreement), or a material adverse effect on the benefits, interests,
rights or remedies of MPROD under the Master Agreement, nor interfere with the
enforcement of any rights of the Insurer (whether exercised directly or through
the Borrower or the Collateral Agent) under or with respect to any of the
Operative Documents; provided that the foregoing shall not impair any right that
the Borrower or any Marvel Company may have to object to any act of the Insurer
taken in contravention of any Operative Document by which the Insurer may be
bound. The Borrower, Marvel Studios and MPROD shall, upon written request from
the Insurer, furnish to the Insurer all information requested by the Insurer
that is reasonably necessary to determine compliance with this paragraph.

(ii)            Waiver, Amendments, Etc. [Conform termination/ amendment
negative covenant to agreed language to be set forth in Sections 7.03(m) and (n)
of the Credit Agreement].

(b)           Incorporation by Reference. The Borrower hereby makes, to and for
the benefit of the Insurer, the covenants set forth in Section 7.03 of the
Credit Agreement and Section 16 of the License Agreement, each of which is
hereby

 

 

 

7

 

 

incorporated herein by reference and shall be complied with by the Borrower
unless the Insurer shall otherwise consent in writing. MPROD hereby makes, to
and for the benefit of the Insurer, the covenants set forth in Section 7(c) of
the Master Agreement, each of which is hereby incorporated herein by reference
and shall be complied with by MPROD unless the Insurer shall otherwise consent
in writing.

Section 2.04. Representations, Warranties and Covenants of the Insurer. The
Insurer represents, warrants and covenants to the Borrower as follows:

(a)      Organization and Licensing. The Insurer is a duly organized and validly
existing Wisconsin stock insurance corporation duly qualified to conduct an
insurance business in the State of New York and in any other jurisdiction where
qualification may be necessary to accomplish the Transaction.

(b)      Corporate Power. The Insurer has the corporate power and authority to
issue the Policy and execute and deliver this Insurance Agreement and to perform
all of its obligations hereunder and thereunder.

(c)    Authorization; Approvals. Proceedings legally required for the issuance
and execution of the Policy and the execution, delivery and performance of this
Insurance Agreement have been taken and licenses, orders, consents or other
authorizations or approvals of any governmental boards or bodies legally
required for the enforceability of the Policy and the conduct by the Insurer of
the business and activities contemplated by the Transaction have been obtained;
any proceedings not taken and any licenses, authorizations or approvals not
obtained are not material to the enforceability of the Policy.

(d)   Enforceability. The Policy, when issued, and this Insurance Agreement will
each constitute a legal, valid and binding obligation of the Insurer,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, receivership and other similar laws affecting
creditors’ rights generally and to general principles of equity and subject to
principles of public policy limiting the right to enforce the indemnification
provisions contained therein and herein, insofar as such provisions relate to
indemnification for liabilities arising under federal securities laws.

(e)   No Litigation. There are no actions, suits, proceedings or investigations
pending or, to the best of the Insurer’s knowledge, threatened against it at law
or in equity or before or by any court, governmental agency, board or commission
or any arbitrator which, if decided adversely, would materially and adversely
affect its ability to perform its obligations under the Policy.

(f)    Confidential Information. The Insurer agrees that it and its
shareholders, directors, agents, accountants and attorneys shall keep
confidential any matter of which it becomes aware during the inspections
conducted or

 

 

 

8

 

 

discussions had pursuant to Section 2.02(c) of this Insurance Agreement (or the
provisions of the Transaction Documents referred to therein) unless such
information is readily available from public sources or except as may be
otherwise required by regulation, law or court order or requested by appropriate
governmental authorities or as necessary to preserve its rights or security
under or to enforce the Operative Documents; provided, however, that the
foregoing shall not limit the right of the Insurer to make such information
available to its regulators, securities rating agencies, reinsurers, credit and
liquidity providers, counsel and accountants. If the Insurer is requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any information of which it becomes aware through such inspections or
discussions, the Insurer will (to the extent permitted by such process) promptly
notify the Borrower, Marvel Studios and/or MPROD, as applicable, of such
request(s) so that the Borrower, Marvel Studios and/or MPROD may seek an
appropriate protective order and/or waive the Insurer’s compliance with the
provisions of this Insurance Agreement. If, in the absence of a protective order
or the receipt of a waiver hereunder, the Insurer is, nonetheless, in the
opinion of its counsel, compelled to disclose such information to any tribunal
or else stand liable for contempt or suffer other censure or significant
penalty, the Insurer may disclose such information to such tribunal that the
Insurer is compelled to disclose; provided, however, that a copy of all
information disclosed is provided to the Borrower, Marvel Studios and/or MPROD,
as the case may be, promptly after such disclosure to the extent, in the opinion
of its counsel, that it is permitted to do so. Notwithstanding anything set
forth in this subsection (f) to the contrary, the parties hereto and their
successors and permitted assigns (and each of their employees, representatives
and other agents) may disclose to any Person, without limitation of any kind,
the U.S. tax treatment and U.S. tax structure of the transactions contemplated
by this Insurance Agreement and the other Operative Documents and all materials
of any kind (including opinions and other tax analyses) relating to such tax
treatment or tax structure, other than any information revealing the identity of
the parties hereto, and except that, with respect to any document or similar
item that in either case contains information concerning the U.S. tax treatment
or U.S. tax structure of such transactions as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to such tax treatment or tax structure.

ARTICLE III

THE POLICY; REIMBURSEMENT

Section 3.01. Issuance of the Policy. The Insurer agrees to issue the Policy on
the Closing Date subject to satisfaction of the conditions precedent set forth
below on or prior to the Closing Date:

 

 

 

 

9

 

 

 

(a)        Payment of Initial Premium, Fees and Expenses. The Insurer shall have
been paid by or on behalf of the Borrower the fees and expenses payable on the
Closing Date in accordance with Section 3.02;

(b)       Operative Documents. The Insurer shall have received a copy of this
Insurance Agreement, the Credit Agreement, the License Agreement, the Master
Agreement, the Paramount Agreement, the Master Distributor Security Agreement,
the Collection Account Control Agreement and each other Transaction Document
entered into on or prior to the Closing Date, in form and substance reasonably
satisfactory to the Insurer, duly authorized, executed and delivered by each
party thereto;

(c)    Certified Documents and Resolutions. The Insurer shall have received (i)
a copy of the certificate of incorporation and by-laws, or limited liability
company agreement, as applicable, of each of the Borrower, MEI, Marvel Studios,
MRL and MPROD and (ii) a certificate of the Secretary or Assistant Secretary of
each of the Borrower, MEI, Marvel Studios, MRL and MPROD dated the Closing Date
stating that attached thereto is a true, complete and correct copy of
resolutions duly adopted by the Board of Directors or members thereof, as
applicable, authorizing the execution, delivery and performance of each
Operative Document to which it is a party to be entered into on or prior to the
Closing Date and the consummation of the Transaction and that such certificate
of incorporation, by-laws, limited liability company agreement and resolutions,
as applicable, are in full force and effect on the Closing Date;

(d)       Incumbency Certificate. The Insurer shall have received a certificate
dated the Closing Date of the Secretary or an Assistant Secretary of each of the
Borrower, MEI, Marvel Studios, MRL and MPROD certifying the names and signatures
of the officers of the Borrower, MEI, Marvel Studios, MRL and MPROD, as
applicable, authorized to execute and deliver the Operative Documents to which
it is a party and that shareholder consent to the execution and delivery of such
documents is not necessary or has been obtained;

(e)      Representations and Warranties. Each of the representations and
warranties of the Borrower, MEI, Marvel Studios and MPROD set forth or
incorporated by reference in this Insurance Agreement, as applicable, shall be
true and correct on and as of the Closing Date as if made on the Closing Date;

(f)        Opinions of Counsel. The Insurer shall have received all opinions of
counsel addressed to any of Moody’s, S&P, the Lenders, the Borrower and the
Borrower Affiliates in respect of the Borrower, the Borrower Affiliates or any
other parties to the Operative Documents and the Transaction dated the Closing
Date, in form and substance reasonably satisfactory to the Insurer, addressed to
the Insurer and addressing such matters as the Insurer may reasonably request,
and the counsel providing each such opinion shall have been instructed by its
client to deliver such opinion to the addressees thereof;

 

 

 

 

10

 

 

 

(g)      Approvals, Etc. The Insurer shall have received true and correct copies
of all approvals, licenses and consents, if any, including any required approval
of the shareholders or members, as applicable, of each of the Borrower and the
Borrower Affiliates, required in connection with the Transaction;

(h)       No Litigation, Etc. No suit, action or other proceeding, investigation
or injunction, or final judgment relating thereto, shall be pending or, to the
current actual knowledge of MEI or any Relevant Party, threatened before any
court, governmental or administrative agency or arbitrator in which it is sought
to restrain or prohibit or to obtain damages or other relief in connection with
any of the Operative Documents or the Policy or the consummation of the
Transaction;

(i)      Legality. No statute, rule, regulation or order shall have been
enacted, entered or deemed applicable by any government or governmental or
administrative agency or court that would make the Transaction illegal or
otherwise prevent the consummation thereof;

(j)       Issuance of Ratings. The Insurer shall have received confirmation that
the risk to be secured by the Policy has been rated no lower than “BBB-” by S&P
and “Baa3” by Moody’s;

(k)       No Default. No Default or Event of Default shall have occurred; and

(l)         Effectiveness of Credit Agreement. The Insurer shall have received a
certificate of the Borrower certifying that each of the conditions precedent to
the effectiveness of the Credit Agreement set forth in Section 5.01 thereof have
been satisfied or waived.

 

Section 3.02.

Payment of Fees and Premium.

(a)        Legal, Accounting and Due Diligence Fees. The Borrower shall pay or
cause to be paid to the Insurer, on the Closing Date, all legal fees, due
diligence expenses and accounting fees incurred by the Insurer in connection
with the issuance of the Policy specified in the schedule of Closing Fees and
Expenses.

(b)      Rating Agency Fees. The Borrower shall promptly pay the initial fees of
S&P and Moody’s with respect to the Transaction following receipt of a statement
with respect thereto. All periodic and subsequent fees of S&P or Moody’s with
respect to, and directly allocable to, the Borrower’s obligations under the
Credit Agreement shall be for the account of, and shall be billed to, the
Borrower. The fees for any other rating agency shall be paid by the party
requesting such other agency’s rating unless such other agency is a substitute
for S&P or Moody’s in the event that S&P or Moody’s is no longer rating the
Borrower’s obligations under the Credit Agreement, in which case the fees for
such agency shall be paid by the Borrower.

 

 

 

 

11

 

 

 

 

(c)

Premium.

(i)             In consideration of the issuance by the Insurer of the Policy,
the Borrower shall pay to the Insurer, except during the continuance of any
period in which the Insurer is in default of its payment obligations under the
Policy, the Premium in such amounts and at such times as are set forth in the
Premium Letter, and the Collateral Agent shall remit the Premium to the Insurer
as and when required pursuant to Section 3.01(c) of the Credit Agreement, as
applicable.

(ii)            Premium paid to the Insurer shall be nonrefundable without
regard to whether the Insurer makes any payment under the Policy or any other
circumstances relating to the Credit Agreement or provision being made for
repayment of the Class A Advances prior to maturity.

 

Section 3.03.

Reimbursement Obligation.

(a)       As and when due in accordance with and from the funds specified in
Sections 3.01(c)(x) and 3.02(v) of the Credit Agreement, as applicable, the
Insurer shall be entitled to reimbursement for each and every payment made by
the Insurer under the Policy and for each and every other Reimbursement Amount,
which reimbursement shall be due and payable on the date that any amount is paid
thereunder, in an amount equal to the amount to be so paid and all amounts
previously paid that remain unreimbursed, together with interest on any and all
such amounts remaining unreimbursed (to the extent permitted by law, if in
respect of any unreimbursed amounts representing interest) from the date such
amounts became due until paid in full (after as well as before judgment), at a
rate of interest equal to the Late Payment Rate.

(b)       Each of the Borrower and MPROD agrees, severally and not jointly, to
pay to the Insurer as follows: anything in Section 3.03(a) to the contrary
notwithstanding, the Insurer shall be entitled to reimbursement from the
Borrower and MPROD, respectively, and shall have full recourse against the
Borrower and MPROD, respectively, for any payments made by the Insurer under the
Policy arising as a result of (i) the Borrower’s or MPROD’s respective failure
to pay or deposit any amount actually received by the Borrower or MPROD,
respectively, and required to be paid over or deposited by it into the
Collection Account, Borrower Blocked Account or Class A Liquidity Reserve
Account pursuant to the Transaction Documents or (ii) the Borrower’s or MPROD’s
respective failure to honor any demand for a payment referred to in clause (i)
above made by the Collateral Agent under the Credit Agreement or the Master
Agreement in accordance with the terms thereof, which reimbursement shall, in
the case of either of the foregoing clauses (i) and (ii), be due and payable on
the date that such payment is made by the Insurer thereunder and in an amount
equal to the amount of such payment and the amounts of all other such payments
previously made by the Insurer arising under the foregoing clause (i) or (ii)
(other than as a result of any failure by the Borrower to pay amounts due under
the

 

 

 

 

12

 

 

Credit Agreement as a result of the failure of any Motion Picture to generate
gross receipts sufficient to make payments when due and owing), together with
interest on any and all such amounts remaining unreimbursed (including, to the
extent permitted by law, any such unreimbursed amounts representing interest)
from the date such amounts become due and payable until paid in full (after as
well as before judgment), at a rate of interest equal to the Late Payment Rate.

(c)       As and when due in accordance with and from the funds specified in
Section 3.01(c)(i) of the Credit Agreement, the Borrower agrees to pay to the
Insurer any and all reasonable charges, fees, costs and expenses that the
Insurer may reasonably pay or incur, including reasonable outside attorneys’ and
accountants’ fees and expenses, in connection with (i) the enforcement, defense
or preservation of any rights in respect of any of the Operative Documents
and/or the Policy, including defending, monitoring or participating in any
litigation or proceeding (including any insolvency proceeding in respect of any
Transaction participant or any affiliate thereof) relating to any of the
Operative Documents or the Policy, any party to any of the Operative Documents
(in its capacity as such a party) or the Transaction, (ii) the exercise of any
right of the Insurer described in Section 2.02(c)(ii) hereof, or (iii) any
amendment, waiver or other action with respect to, or related to, any Operative
Document or the Policy, whether or not executed or completed. If three Business
Days’ written notice of the intended payment or incurrence shall have been given
to the Borrower by the Insurer, such reimbursement shall be due on the dates on
which such charges, fees, costs or expenses are paid or incurred by the Insurer;
otherwise, such reimbursement shall be due within three Business Days after the
Borrower is notified thereof.

(d)       Each of the Borrower and MPROD, as applicable, agrees, severally and
not jointly, to pay to the Insurer interest (without duplication) on any and all
amounts payable by it described in subsections 3.03(b), 3.03(c) and 3.03(e) and
Section 3.04 from the date such amounts become due or, in the case of subsection
3.03(c) or Section 3.04, are incurred or paid by the Insurer until payment
thereof in full (after as well as before judgment), at the Late Payment Rate.

(e)       The Borrower agrees to pay to the Insurer as follows: any payments
made by the Insurer on behalf of, or advanced to, the Borrower or any Marvel
Company at the Borrower’s written request, including any amounts payable by the
Borrower or MPROD pursuant to any Operative Document (other than payments or
advances made by the Insurer for principal and interest due under the Credit
Agreement), on the date any such payment is made or advanced by the Insurer,
provided that the Insurer shall have given the Borrower and/or MPROD, as
applicable, three Business Days’ advance notice of the Insurer’s intention to
make or advance such payments.

 

 

 

 

13

 

 

 

Section 3.04.   Indemnification with respect to the Borrower, Marvel Studios,
MPROD, the Insurer and the Collateral Agent.

(a)     Without limiting, and in addition to, any other rights which the Insurer
may have hereunder or under applicable law or in equity, the Borrower agrees,
severally and not jointly, and each of Marvel Studios and MPROD agrees, jointly
and severally (with respect to each other and not with respect to the Borrower),
to indemnify and save harmless the Insurer and its officers, directors,
shareholders, employees, agents and each Person, if any, who controls the
Insurer within the meaning of either Section 15 of the Securities Act or Section
20 of the Securities Exchange Act (each, an “Insurer Indemnified Party”), from
and against any and all damages, losses, liabilities (including penalties) and
actual and verifiable out of pocket costs and expenses (including reasonable
fees and disbursements of outside counsel, consultants and auditors) of any
nature (all of the foregoing being collectively referred to as “Indemnified
Amounts”) arising out of, or relating to, or in connection with, (1) any
representation or warranty made by it (or any of its Responsible Officers) under
this Insurance Agreement or under the Transaction Documents which shall have
been incorrect in any material respect when made, without giving effect to any
clauses therein relating to materiality or Material Adverse Effect, or any
omission by MRL to state a material fact required to be stated in any
representation or warranty set forth in Sections 15.2-15.6, inclusive, of the
License Agreement necessary to make the statements contained therein, in light
of the circumstances under which made, not misleading, (2) a failure by it to
perform or observe its covenants or other obligations under this Insurance
Agreement or the Transaction Documents, without giving effect to any clauses
therein relating to materiality or Material Adverse Effect, (3) any action, or
failure to act, by it that would result in the failure to vest and maintain in
favor of the Borrower, legal and equitable title to, and ownership of, the Film
Rights for each Completed Film, free and clear of any Adverse Claim, (4) any
action by it that would result in the failure to vest and maintain in the
Borrower a first priority perfected security interest in any of the Collateral
under the Master Distributor Security Agreement, free and clear of any Adverse
Claim other than Permitted Liens, (5) any action by it that would result in the
failure to vest and maintain in the Collateral Agent a first priority perfected
security interest in any of the Collateral under the Credit Agreement, free and
clear of any Adverse Claim other than Permitted Liens, (6) the failure by it to
comply with any applicable Law, (7) any failure of it to pay when due any Taxes
owed by it, (8) (solely with respect to MPROD and Marvel Studios) the failure by
MPROD to remit Gross Receipts received by it pursuant to Section 3(f)(B) of the
Master Agreement to the Collection Account as required thereby, or any
commingling of amounts received in respect of Gross Receipts with other funds of
any Marvel Company, (9) (solely with respect to MPROD and Marvel Studios) any
breach by MPROD of a material obligation under a Subdistributor Agreement, and
(10) the gross negligence, bad faith, willful misconduct, misfeasance,
malfeasance or theft committed by any director, officer, employee or agent of
the Borrower, Marvel Studios or MPROD in connection with any Transaction arising
from or relating to the Operative Documents. Without

 

 

 

 

14

 

 

limiting or being limited by the foregoing, the Borrower agrees, severally and
not jointly, and each of Marvel Studios and MPROD agrees, jointly and severally
(with respect to each other and not with respect to the Borrower), to pay, on
demand, to each Insurer Indemnified Party any and all amounts necessary to
indemnify such Insurer Indemnified Party from and against any and all
Indemnified Amounts relating to or resulting from any litigation, proceeding or
third-party investigation related to any of the matters referred to above in
this Section 3.04(a) or any litigation, proceeding or third-party investigation
with respect to any action, or failure to act, by the Borrower, Marvel Studios
or MPROD, as applicable, under any of the Transaction Documents to which it is a
party or any of the transactions contemplated thereby. Notwithstanding anything
in this Section 3.04(a) to the contrary, none of the Borrower, Marvel Studios
and MPROD shall have any obligation to indemnify any Insurer Indemnified Party
under this Section 3.04(a) in respect of Indemnified Amounts to the extent
resulting from the gross negligence or willful misconduct of such Insurer
Indemnified Party.

(b)     The Insurer agrees to pay, and to protect, indemnify and save harmless,
the Borrower, Marvel Studios and MPROD and their respective officers, directors,
shareholders, employees, agents and each Person, if any, who controls the
Borrower, Marvel Studios and MPROD within the meaning of either Section 15 of
the Securities Act or Section 20 of the Securities Exchange Act from and
against, any and all claims, losses, liabilities (including penalties), actions,
suits, judgments, demands, damages, costs or expenses suffered or incurred by
such Person (including reasonable fees and expenses of attorneys, consultants
and auditors and reasonable costs of investigations) of any nature arising out
of or by reason of (i) a breach of any of the representations and warranties of
the Insurer contained in Section 2.04 or (ii) the gross negligence, bad faith,
willful misconduct, misfeasance, malfeasance or theft committed by any director,
officer, employee or agent of the Insurer in connection with any Transaction
arising from or relating to the Operative Documents and/or the Policy.

(c)   If any action or proceeding (including any governmental investigation)
shall be brought or asserted against any Person (individually, an “Indemnified
Party” and, collectively, the “Indemnified Parties”) in respect of which the
reimbursement obligation for litigation or claims provided in Section
3.03(c)(i), or the indemnity provided in Section 3.04(a) or (b), may be sought
from the Borrower, Marvel Studios or MPROD, on the one hand, or the Insurer, on
the other (each, an “Indemnifying Party”) hereunder, each such Indemnified Party
shall promptly notify the Indemnifying Party in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all
expenses. The Indemnified Party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof at the expense of
the Indemnified Party; provided, however, that the fees and expenses of such
separate counsel shall be at the expense of the Indemnifying Party if (i) the
Indemnifying

 

 

 

 

15

 

 

Party has agreed to pay such fees and expenses, (ii) the Indemnifying Party
shall have failed within a reasonable period of time to assume the defense of
such action or proceeding and employ counsel reasonably satisfactory to the
Indemnified Party in any such action or proceeding or (iii) the named parties to
any such action or proceeding (including any impleaded parties) include both the
Indemnified Party and the Indemnifying Party, and the Indemnified Party shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Indemnifying Party (in which case, if the Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such action or proceeding on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying Party
shall not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for the Indemnified Parties, which firm shall be designated in writing by
the Indemnified Party and shall be reasonably satisfactory to the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any
such action or proceeding effected without its written consent, which consent
shall not be unreasonably withheld, conditioned or delayed, but, if settled with
its written consent, or if there is a final judgment for the plaintiff in any
such action or proceeding with respect to which the Indemnifying Party shall
have received notice in accordance with this subsection (c), the Indemnifying
Party agrees to indemnify and hold the Indemnified Parties harmless from and
against any loss or liability by reason of such settlement or judgment.

(d)       To provide for just and equitable contribution if the indemnification
provided by the Indemnifying Party is determined to be unavailable or
insufficient to hold harmless any Indemnified Party (other than due to
application of this Section 3.04), each Indemnifying Party shall contribute to
the losses incurred by the Indemnified Party on the basis of the relative fault
of the Indemnifying Party, on the one hand, and the Indemnified Party, on the
other hand.

Section 3.05. Payment Procedure. In the event of any payment by the Insurer,
then the Collateral Agent, the Borrower, MEI, Marvel Studios, MRL and MPROD
agree to accept the voucher or other evidence of payment as prima facie evidence
of the propriety thereof and the liability, if any, described in Section 3.03
therefor to the Insurer. All payments to be made to the Insurer under this
Insurance Agreement shall be made to the Insurer in lawful currency of the
United States of America in immediately available funds at the notice address
for the Insurer as specified in Section 6.02(a) on the date when due or as the
Insurer shall otherwise direct by written notice to the other parties hereto. In
the event that the date of any payment to the Insurer or the expiration of any
time period hereunder occurs on a day that is not a Business Day, then such
payment or expiration of time period shall be made or occur on the next
succeeding Business Day

 

 

 

 

16

 

 

with the same force and effect as if such payment was made or time period
expired on the scheduled date of payment or expiration date.

Section 3.06. Joint and Several Liability. Marvel Studios and MPROD shall be
jointly and severally liable for all amounts due and payable to the Insurer
hereunder by each such party.

 

Section 3.07.

Performance Support.

(a)     Subject to this Section 3.07(a), MEI hereby agrees that it will instruct
each of the Borrower, MPROD, each Production Company (as defined in the Master
Agreement) and Marvel Studios (each, a “Section 3.07 Party”) to perform each of
their respective Covered Obligations as set forth in the Transaction Documents
to which each such Section 3.07 Party is a party in accordance with the terms
set forth in such Transaction Document. Notwithstanding the preceding sentence,
(i) MEI shall have no obligation to give any such instruction if MEI would be
required to incur any out of pocket cost or expense, or offer credit support, or
make any capital contribution to any Section 3.07 Party in order to make such
instruction and (ii) if the applicable Covered Obligation involves the judgment
or discretion of a Section 3.07 Party, MEI’s obligations to instruct such
Section 3.07 Party to act shall be deemed satisfied if such Section 3.07 Party
has elected, in good faith, a course of action that is permitted by the
applicable Operative Document. Without limiting the generality of the foregoing,
(x) MEI shall not be liable for Excluded Damages and (y) MEI shall not be liable
for any damages (including, without limitation, Excluded Damages) under this
Section 3.07(a) in connection with the Specified Covered Obligations if MEI’s
actions pursuant to this Section 3.07(a) were taken in good faith.

(b)       Subject to this Section 3.07(b), MEI hereby agrees that it will cause
each Section 3.07 Party to perform its respective Covered Obligations as set
forth in the Transaction Documents to which such Section 3.07 Party is a party
in accordance with the terms set forth in such Transaction Document. MEI’s
performance of the Covered Obligations on behalf of each Section 3.07 Party (or
its causing such Section 3.07 Party to so perform) shall be carried out with
reasonable care and in a manner so as not to be negligent. Notwithstanding the
preceding two sentences, MEI shall have no obligation to cause such Section 3.07
Party to perform any Covered Obligation if (i) such Covered Obligation is
unenforceable or stayed under applicable Law or if MEI is otherwise prevented
from fulfilling such Covered Obligation by applicable Law, (ii) MEI would be
required to incur any out of pocket cost or expense, or offer credit support, or
make any capital contribution to any Section 3.07 Party in order to cause such
Covered Obligation to be performed or (iii) the applicable Covered Obligation
involves the judgment or discretion of a Section 3.07 Party, and such Section
3.07 Party has elected, in good faith, a course of action that is permitted by
the applicable Operative Document; provided, however, that MEI agrees to cause
such Section 3.07 Party to make such decision or judgment in good faith and in
accordance with the Operative Documents. Without limiting the generality of the
foregoing, (x) MEI shall not be liable for Excluded Damages and (y) MEI shall
not be liable for any damages (including, without limitation,

 

 

 

 

17

 

 

Excluded Damages) under this Section 3.07(b) in connection with the Specified
Covered Obligations if MEI’s actions pursuant to this Section 3.07(b) were taken
in good faith.

(c)   The obligations of MEI under this Insurance Agreement are dependent on the
Covered Obligations, and no separate action or actions may be brought and
prosecuted against MEI to enforce this Section 3.07 unless an action is first or
simultaneously brought against the Relevant Party.

(d)          MEI hereby waives any right to revoke its obligations under this
Section 3.07, and acknowledges that this Section 3.07 is continuing in nature
and applies to all Covered Obligations, whether existing now or in the future.

(e)           MEI will not exercise any rights which it may now or hereafter
acquire by way of subrogation under this Insurance Agreement, by any payment
made hereunder or otherwise, until all amounts payable to the Insurer under this
Insurance Agreement shall have been paid in full and the Class A Collection Date
shall have occurred under and as defined in the Credit Agreement.

 

(f)

MEI hereby represents and warrants to the Insurer as follows:

(i)        MEI has been duly incorporated and is validly existing and in good
standing as a corporation under the laws of the State of Delaware, and has all
necessary corporate power and authority to execute, deliver and perform its
obligations under this Insurance Agreement and the transactions contemplated
hereby and to conduct its business as described herein and therein. The
execution, delivery and performance of the obligations of MEI under this
Insurance Agreement and the transactions contemplated hereby are actions that
are within MEI’s powers and have been duly authorized by all necessary corporate
action. MEI is duly qualified and is authorized to do business and is in good
standing in each jurisdiction in which the conduct of its business requires it
to be so qualified or be authorized, except where the failure to so qualify
would not reasonably be expected to materially and adversely affect the (i)
business, condition (financial or otherwise), operations or properties of MEI
and its Subsidiaries taken as a whole, (ii) interests of the Insurer or the
Collateral Agent hereunder or under the Credit Agreement or in the Collateral or
(iii) the ability of MEI to enforce or perform its obligations hereunder. MEI
has all requisite corporate power and authority to own its properties and to
carry on its business.

(ii)       The execution, delivery and performance by MEI of this Insurance
Agreement and the transactions contemplated hereby do not (i) contravene MEI’s
certificate of incorporation or by-laws, (ii) violate any applicable law
(including, without limitation, the Securities Exchange Act of 1934), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award other than where such violation would not be
reasonably likely to have a Material Adverse Effect, (iii) conflict with or
result in the breach of or constitute a default under, in any material respect,
any contract, loan agreement, indenture,

 

 

 

 

18

 

 

mortgage, deed of trust, lease or other agreement or instrument binding on or
affecting MEI or any of its properties with respect to which MEI has an
obligation or potential obligation in an aggregate amount in excess of
$50,000,000 or (iv) result in or require the creation of any Adverse Claim upon
or with respect to the Collateral.

(iii)       No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by MEI of this Insurance Agreement or
any other document or instrument to be delivered hereunder or for the perfection
of or the exercise by the Collateral Agent or the Insurer of its respective
rights and remedies under this Insurance Agreement.

(iv)     This Insurance Agreement constitutes the legal, valid and binding
obligation of MEI enforceable against MEI in accordance with its terms, except
as may be limited by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally, and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).

(v)       Except as disclosed by MEI to the Insurer in writing on or before the
date hereof, there are no actions, suits or proceedings pending, or to the
knowledge of MEI threatened, against or affecting MEI or any Subsidiary thereof,
or the property of MEI or of any Subsidiary thereof, in any court, or before any
arbitrator of any kind, or before or by any governmental body (i) which is
likely to materially adversely affect (A) the financial condition or operations
of MEI and its Subsidiaries taken as a whole or (B) the ability of MEI to
perform its obligations under this Insurance Agreement or (ii) which purports to
affect the legality, validity, binding effect or enforceability of this
Insurance Agreement.

(vi)      MEI owns, directly or indirectly, 100% of the shares or membership
interests, as applicable, in Borrower, Marvel Studios, MRL and MPROD, free and
clear of any Adverse Claim.

ARTICLE IV

FURTHER AGREEMENTS

Section 4.01. Effective Date; Term of the Insurance Agreement. This Insurance
Agreement shall take effect on the Closing Date and shall remain in effect until
the later of (a) such time as the Insurer is no longer subject to a claim under
the Policy and the Policy shall have been surrendered to the Insurer for
cancellation and (b) all amounts payable to the Insurer, if any, by the
Borrower, MEI, Marvel Studios and/or MPROD hereunder or from any other source
hereunder or under the Operative Documents have been paid in full; provided,
however, that the provisions of Sections 3.02(b), 3.02(c)(ii), 3.03, 3.04, 3.06
and 3.07 hereof shall survive any termination of this Insurance Agreement.

 

 

 

 

19

 

 

 

 

Section 4.02.

Corrective Instruments.

(a)      To the extent permitted by law, MEI and each of the Relevant Parties
agrees that it will, from time to time, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such supplements hereto and
such further instruments as the Insurer may reasonably request and as may be
required in the Insurer’s reasonable judgment to effectuate the intention of or
facilitate the performance of this Insurance Agreement by such party.

(b)       To the extent permitted by law, the Insurer agrees that it will, from
time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further instruments
as the Borrower may reasonably request and as may be required in the Borrower’s
reasonable judgment to effectuate the intention of or facilitate the performance
of this Insurance Agreement by the Insurer.

 

Section 4.03.

Obligations Absolute.

(a)       The obligations of MEI and the Relevant Parties hereunder shall be
absolute and unconditional and shall be paid or performed strictly in accordance
with this Insurance Agreement under all circumstances irrespective of:

(i)             any lack of validity or enforceability of, or any amendment or
other modifications of, or waiver, with respect to any of the Operative
Documents or the Policy that have not been approved by the Insurer (to the
extent that the Insurer has consent rights with respect thereto);

 

(ii)

any exchange or release of any other obligations hereunder;

(iii)           the existence of any claim, setoff, defense, reduction,
abatement or other right that MEI or any Relevant Party may have at any time
against the Insurer or any other Person;

(iv)          any document presented by MEI or a Relevant Party in connection
with the Policy proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;

(v)           any payment by the Insurer under the Policy against presentation
of a certificate or other document that does not strictly comply with terms of
the Policy;

(vi)          any failure of the Borrower, MRL or MPROD to receive the proceeds
of Advances under the Credit Agreement; and

(vii)         any other circumstances, other than payment in full, that might
otherwise constitute a defense available to, or discharge of, MEI or any
Relevant Party in respect of any Operative Document.

 

 

 

 

20

 

 

 

(b)       MEI, the Relevant Parties and any and all others who are now or may
become liable for all or part of the obligations of MEI and the Relevant Parties
under this Insurance Agreement renounce, to the extent permitted by law, the
right to assert as a defense to the performance of their respective obligations
each of the following: (i) any and all redemption and exemption rights and the
benefit of all valuation and appraisement privileges against the indebtedness
and obligations evidenced by any Operative Document or by any extension or
renewal thereof, (ii) presentment and demand for payment, notices of nonpayment
and of dishonor, protest of dishonor and notice of protest, (iii) all notices in
connection with the delivery and acceptance hereof and all other notices in
connection with the performance, default or enforcement of any payment
hereunder, except as required by the Operative Documents, and (iv) all rights of
abatement, diminution, postponement or deduction, or to any defense other than
payment, or to any right of setoff or recoupment arising out of any breach under
any of the Operative Documents, by any party thereto or any beneficiary thereof,
or out of any obligation at any time owing to it.

(c)       MEI, the Relevant Parties and any and all others who are now or may
become liable for all or part of the obligations of MEI and the Relevant Parties
under this Insurance Agreement agree to be bound by this Insurance Agreement
and, to the extent lawful, (i) agree that any consent, waiver or forbearance
hereunder with respect to an event shall operate only for such event and not for
any subsequent event, (ii) consent to any and all extensions of time that may be
granted by the Insurer with respect to any payment hereunder or other provisions
hereof and to the termination and release of any security interest or guaranty
at any time given for any payment hereunder, or any part thereof, with or
without substitution, and to the release of any Person or entity liable for any
such payment, and (iii) consent to the addition of any and all other makers,
endorsers, guarantors and other obligors for any payment hereunder (other than
any Marvel Company), and to the acceptance of any and all other security for any
payment hereunder, and agree that the addition of any such obligors or security
shall not affect the liability of the parties hereto for any payment hereunder;
provided that such addition does not increase the liabilities of MEI or any
other Relevant Party hereunder.

(d)    Nothing herein shall be construed as prohibiting MEI or any Relevant
Party from pursuing any rights or remedies it may have against any Person in a
separate legal proceeding.

 

Section 4.04.

Assignments; Reinsurance; Third-Party Rights.

(a)      This Insurance Agreement shall be a continuing obligation of the
parties hereto and shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither MEI nor
any Relevant Party may assign its rights under this Insurance Agreement, or
delegate any of its duties hereunder, without the prior written consent of the

 

 

 

 

21

 

 

Insurer. Any purported assignment made in violation of this Insurance Agreement
shall be null and void.

(b)     The Insurer shall have the right to give participations in its rights
under this Insurance Agreement and to enter into contracts of reinsurance with
respect to the Policy upon such terms and conditions as the Insurer may in its
discretion determine; provided, however, that no such participation or
reinsurance agreement or arrangement shall relieve the Insurer of any of its
obligations hereunder or under the Policy.

(c)      Except as provided herein with respect to participants and reinsurers,
nothing in this Insurance Agreement shall confer any right, remedy or claim,
express or implied, upon any Person, including, particularly, the Collateral
Agent, the Administrative Agent or any Lender, other than the Insurer against
MEI and the Relevant Parties, or MEI and the Relevant Parties against the
Insurer, and all the terms, covenants, conditions, promises and agreements
contained herein shall be for the sole and exclusive benefit of such parties and
their successors and permitted assigns. Neither the Collateral Agent, the
Administrative Agent nor any Lender shall have any right to payment from any
Premium paid or payable hereunder or under the Credit Agreement or from any
amounts paid by MEI and the Relevant Parties pursuant to Sections 3.02, 3.03 or
(solely to the extent relating to Sections 3.02 or 3.03) Section 3.07.

Section 4.05. Liability of the Insurer. Neither the Insurer nor any of its
officers, directors or employees shall be liable or responsible for (a) the use
that may be made of the Policy by the Collateral Agent or the Administrative
Agent or for any acts or omissions of the Collateral Agent or the Administrative
Agent in connection therewith or (b) the validity, sufficiency, accuracy or
genuineness of documents delivered to the Insurer in connection with any claim
under the Policy, or of any signatures thereon, even if such documents or
signatures should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged (unless the Insurer shall have actual
knowledge thereof). In furtherance and not in limitation of the foregoing, the
Insurer may accept documents that appear on their face to be in order, without
responsibility for further investigation.

ARTICLE V

DEFAULTS AND REMEDIES

Section 5.01. Defaults. The occurrence of any of the following shall constitute
an Event of Default hereunder:

(a)     Any representation or warranty made by the Borrower or any Borrower
Affiliate hereunder or under any of the Operative Documents, or in any
certificate furnished hereunder or under the Operative Documents, shall prove to
be untrue or incomplete in any material respect;

(b)      (i) The Borrower or any Borrower Affiliate shall fail to pay when due
any amount payable by it hereunder or (ii) a legislative body has enacted any

 

 

 

 

22

 

 

law that declares or a court of competent jurisdiction shall find or rule that
this Insurance Agreement or any other Operative Document is not valid and
binding on the Borrower or any Borrower Affiliate, provided that, with respect
to any law or judicial action within the scope of this clause (ii), the Borrower
or such Borrower Affiliate shall have 30 days to reinstate the binding effect of
this Insurance Agreement or any other Operative Document, and the Insurer agrees
to take such actions as may be reasonably requested of it to facilitate the
reinstatement of such binding effect;

(c)      The occurrence and continuance of (i) an “Event of Default” (as defined
in the Credit Agreement), including, without limitation, the occurrence of any
Bankruptcy Event with respect to MEI, the Borrower or Marvel Studios, or (ii)
any “event of default” or other term of similar meaning or effect under any
Operative Document (other than this Insurance Agreement and the Credit
Agreement) by MEI or any Relevant Party;

(d)       Any failure on the part of the Borrower or any Borrower Affiliate duly
to observe or perform in any material respect any of the covenants or agreements
on the part of the Borrower or such Borrower Affiliates contained in this
Insurance Agreement other than those incorporated by reference herein which
continues unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Borrower and/or such Borrower Affiliate, as applicable, by the Insurer
(with a copy to the Collateral Agent); or

(e)       The Borrower shall become subject to registration as an investment
company under the Investment Company Act.

 

Section 5.02.

Remedies; No Remedy Exclusive.

(a)     Upon the occurrence of an Event of Default, the Insurer may exercise any
one or more of the rights and remedies set forth below:

(i)             declare all indebtedness of every type or description then owed
by the defaulting party to the Insurer to be immediately due and payable, and
the same shall thereupon be immediately due and payable from such defaulting
party;

(ii)            if such Event of Default also constitutes an “Event of Default”
as defined in the Credit Agreement, exercise any contractual rights and remedies
available under the Credit Agreement in accordance with the terms thereof or
direct the Collateral Agent to exercise such remedies in accordance with the
terms of the Credit Agreement;

(iii)           if such Event of Default also triggers contractual rights and/or
remedies of the Insurer under any Operative Document, exercise such rights
and/or remedies in accordance with the terms thereof or direct

 

 

 

 

23

 

 

the Collateral Agent, the Borrower and/or each Marvel Company to exercise such
remedies in accordance with the terms thereof;

(iv)          take whatever action at law or in equity as may appear necessary
or desirable in its judgment to collect the amounts, if any, then due to it from
the defaulting party under this Insurance Agreement, the Policy and the Premium
Letter or to enforce performance and observance of any obligation, agreement or
covenant of the Borrower and/or each Marvel Company under this Insurance
Agreement, the Policy and the Premium Letter; or

(v)           if authorized in any other Operative Document as a result of the
event that caused such Event of Default, take whatever action at law or in
equity as may appear necessary or desirable in its judgment to collect the
amounts, if any, then due to it under such Operative Document or to enforce
performance and observance of any obligation, agreement or covenant of the
Borrower and/or each Marvel Company under such Operative Document.

(b)       Unless otherwise expressly provided, no remedy herein conferred or
reserved is intended to be exclusive of any other available remedy, but each
remedy shall be cumulative and shall be in addition to other remedies given
under this Insurance Agreement, the other Operative Documents or existing at law
or in equity. No delay or omission to exercise any right or power accruing under
this Insurance Agreement or any other Operative Documents upon the happening of
any event set forth in Section 5.01 shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Insurer to exercise any remedy reserved to the Insurer in this
Article, it shall not be necessary to give any notice, other than such notice as
may be required by this Article.

 

Section 5.03.

Waivers.

(a)        No failure by the Insurer to exercise, and no delay by the Insurer in
exercising, any right hereunder shall operate as a waiver thereof. The exercise
by the Insurer of any right hereunder shall not preclude the exercise of any
other right, and the remedies provided herein to the Insurer are declared in
every case to be cumulative and not exclusive of any remedies provided by law or
equity.

(b)     The Insurer shall have the right, to be exercised in its complete
discretion, to waive any Event of Default hereunder, by a writing setting forth
the terms, conditions and extent of such waiver signed by the Insurer and
delivered to the Borrower and each applicable Borrower Affiliate. Unless such
writing expressly provides to the contrary, any waiver so granted shall extend
only to the specific event or occurrence which gave rise to the Event of Default
so waived

 

 

 

 

24

 

 

and not to any other similar event or occurrence which occurs subsequent to the
date of such waiver.

ARTICLE VI

MISCELLANEOUS

Section 6.01. Amendments, Etc. This Insurance Agreement may be amended,
modified, supplemented or terminated only by written instrument or written
instruments signed by the parties hereto. The Borrower agrees to provide a copy
of any amendment to this Insurance Agreement promptly to the Collateral Agent
and the rating agencies maintaining a rating on the Notes and/or the Borrower’s
obligations under the Notes. No act or course of dealing shall be deemed to
constitute an amendment, modification, supplement or termination hereof.

Section 6.02. Notices. All demands, notices and other communications to be given
hereunder shall be in writing (except as otherwise specifically provided herein)
and shall be mailed by registered mail or personally delivered and telecopied to
the recipient as follows:

 

(a)

To the Insurer:

 

Ambac Assurance Corporation

One State Street Plaza

New York, New York 10004

Attention: Consumer Asset Backed Securities

Facsimile: (212) 363-1459

Confirmation: (212) 668-0340

(in each case in which such notice or other communication to the Insurer refers
to an Event of Default, a claim on the Policy or with respect to which failure
on the part of the Insurer to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication shall also be sent
to the attention of the general counsel of each of the Insurer, the Borrower and
the Collateral Agent and, in all cases, both any original and all copies shall
be marked to indicate “URGENT MATERIAL ENCLOSED.”)

 

(b)

To the Borrower, MEI, Marvel Studios, MRL and/or MPROD:

 

9242 Beverly Boulevard

Suite 350

Beverly Hills, CA 90210

Attention: President

Facsimile: 310-285-9825

with copies to:

 

 

 

 

25

 

 

Marvel Enterprises, Inc.

417 5th Avenue

New York, New York 10016

Attention: General Counsel

Facsimile: (212) 576-4005

Liner Yankelevitz Sunshine & Regenstreif LLP

1100 Glendon Avenue, 14th Floor

Los Angeles, California 90024

Attention: Joshua B. Grode, Esq.

Facsimile: (310) 500-3501

Notice to the Borrower shall also constitute notice to the Borrower Affiliates
(in each case in which notice or other communication to the Borrower refers to
an Event of Default, a claim against the Borrower or the Borrower Affiliates or
with respect to which failure on the part of the Borrower or any Borrower
Affiliate to respond shall be deemed to constitute consent or acceptance, then a
copy of such notice or other communication should also be sent to the attention
of the general counsel of each of the Insurer and the Collateral Agent and, in
all cases, both any original and all copies shall be marked to indicate “URGENT
MATERIAL ENCLOSED.”).

 

(c)

To the Collateral Agent:

 

HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018

Attn: Corporate Trust and Loan Agency

Facsimile: (212) 525-1300

 

A party may specify an additional or different address or addresses by writing
mailed or delivered to the other parties as aforesaid. All such notices and
other communications shall be effective upon receipt.

Section 6.03. Severability. In the event that any provision of this Insurance
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, the parties hereto agree that such holding shall not invalidate or
render unenforceable any other provision hereof. The parties hereto further
agree that the holding by any court of competent jurisdiction that any remedy
pursued by any party hereto is unavailable or unenforceable shall not affect in
any way the ability of such party to pursue any other remedy available to it.

Section 6.04. Governing Law. This Insurance Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

 

 

 

 

26

 

 

 

 

Section 6.05.

Consent to Jurisdiction.

(a)      The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of the United States District Court for the Southern District of
New York and any court in the State of New York located in the Borough of
Manhattan, and any appellate court from any thereof, in any action, suit or
proceeding brought against it and to or in connection with any of the Operative
Documents, the Policy or the Transaction or for recognition or enforcement of
any judgment, and the parties hereto hereby irrevocably and unconditionally
agree that all claims in respect of any such action or proceeding may be heard
or determined in such New York state court or, to the extent permitted by law,
in such federal court. The parties hereto agree that a final unappealable
judgment in any such action, suit or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. To the extent permitted by applicable law, the parties hereto
hereby waive and agree not to assert by way of motion, as a defense or otherwise
in any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such courts, that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that the related documents or the subject matter
thereof may not be litigated in or by such courts.

(b)      To the extent permitted by applicable law, the parties hereto shall not
seek and hereby waive the right to any review of the judgment of any such court
by any court of any other nation or jurisdiction which may be called upon to
grant an enforcement of such judgment.

(c)       Service on the Borrower, MEI, Marvel Studios, MRL or MPROD may be made
by mailing or delivering copies of the summons and complaint and other process
which may be served in any suit, action or proceeding to the applicable party at
its then-current notice address as specified in Section 6.02.

(d)      Nothing contained in this Insurance Agreement shall limit or affect any
party’s right to serve process in any other manner permitted by law or to start
legal proceedings relating to any of the Operative Documents or the Policy
against any other party or its properties in the courts of any jurisdiction.

Section 6.06. Consent of the Insurer. In the event that the consent of the
Insurer is required under any of the Operative Documents or the Policy, the
determination whether to grant or withhold such consent shall be made by the
Insurer in its sole discretion without any implied duty towards any other
Person, except as otherwise expressly provided herein or therein.

Section 6.07. Counterparts; Delivery by Facsimile. This Insurance Agreement may
be executed in counterparts by the parties hereto, and each such counterpart
will be considered an original and all such counterparts will constitute one and
the same instrument. Delivery of an executed counterpart of a signature page to
this Insurance

 

 

 

 

27

 

 

Agreement by telecopier shall constitute delivery of a manually executed
counterpart of this Insurance Agreement.

Section 6.08. Headings. The headings of Articles and Sections and the Table of
Contents contained in this Insurance Agreement are provided for convenience
only. They form no part of this Insurance Agreement and shall not affect its
construction or interpretation.

Section 6.09. Limited Liability. No recourse under any Operative Document or the
Policy shall be had against, and no personal liability shall attach to, any
officer, employee, director, affiliate or shareholder of any party hereto, as
such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise in respect of any of the
Operative Documents or the Policy, it being expressly agreed and understood that
each Operative Document and the Policy is solely a corporate obligation of each
party thereto, and that any and all personal liability, either at common law or
in equity, or by statute or constitution, of every such officer, employee,
director, affiliate or shareholder for breaches of any party hereto of any
obligations under any Operative Document or the Policy is hereby expressly
waived as a condition of and in consideration for the execution and delivery of
this Insurance Agreement.

Section 6.10. Entire Agreement. This Insurance Agreement and the Policy set
forth the entire agreement between the parties with respect to the subject
matter hereof and thereof, and this Insurance Agreement supersedes and replaces
any agreement or understanding that may have existed between the parties prior
to the date hereof in respect of such subject matter.

Section 6.11. Limited Recourse. No recourse for any obligations of the Borrower,
MEI, Marvel Studios, MRL and MPROD, respectively, hereunder will be had against
any organizer, stockholder, officer, director, member, manager, employee, agent
or Affiliate of such Person, including, without limitation, any Marvel Company,
in such capacity (without prejudice to any recourse that the Insurer may have
directly against such Person provided for herein or in any other Operative
Document); it being expressly agreed and understood that this Insurance
Agreement and all amounts due hereunder are solely corporate or limited
liability company obligations, as applicable, of such Person, and that no
personal liability whatsoever will attach to or be incurred by any organizer,
stockholder, officer, director, member, manager, employee, agent or Affiliate of
such Person including, wit hout limitation, any Marvel Company in such capacity
(without prejudice to any recourse that the Insurer may have directly against
such Person provided for herein or in any other Operative Document).

Section 6.12. Third Party Beneficiary. The Collateral Agent, the Borrower, MEI,
Marvel Studios, MRL and MPROD each agree that the Insurer shall have all rights
provided to the Insurer in the Operative Documents and that the Insurer shall be
a third-party beneficiary in respect of the Operative Documents to which the
Insurer is not a party.

 

 

 

 

28

 

 

 

Section 6.13. Authorization and Action of the Collateral Agent. The Insurer
hereby appoints and authorizes HSBC Bank USA, National Association to act as the
Collateral Agent, to take such action as Collateral Agent on its behalf and to
exercise such powers and discretion under the Credit Agreement and the other
Operative Documents as are delegated to the Collateral Agent by the terms hereof
and thereof, together with such powers and discretion as are reasonably
incidental thereto and consistent herewith and the other Operative Documents.
The terms and conditions set forth in Sections 10.01 and 10.03 of the Credit
Agreement shall apply to the foregoing appointment and authorization of the
Collateral Agent by the Insurer. During the term of this Insurance Agreement,
the Collateral Agent will, unless the Insurer shall otherwise consent in
writing, (a) comply with each covenant and obligation of the Collateral Agent
set forth in the Operative Documents and the Ancillary Documents and (b) comply
solely with the written instructions of the Insurer, as Control Party, when
required pursuant to the terms of the Operative Documents and the Ancillary
Documents. In the performance of its duties hereunder, the Collateral Agent
shall be entitled to all of the rights, benefits and protections afforded to it
under the Credit Agreement.

Section 6.14. WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH
ANY OF THE OPERATIVE DOCUMENTS, THE POLICY OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREUNDER. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THE OPERATIVE
DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS WAIVER.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

29

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Insurance Agreement,
all as of the day and year first above mentioned.

 

AMBAC ASSURANCE CORPORATION,

as Insurer

 

 

By:   /s/ Harris C. Mehos

Name: Harris C. Mehos

Title: First Vice President

 

 

 

 

 

MVL FILM FINANCE LLC

 

 

 

By: /s/ John Turitzin

Name: John Turitzin

Title: Executive Vice President

 

MARVEL ENTERPRISES, INC.

 

 

 

By: /s/ John Turitzin

Name: John Turitzin

Title: Executive Vice President

 

MARVEL STUDIOS, INC.

 

 

 

By: /s/ John Turitzin

Name: John Turitzin

Title: Executive Vice President

 

MVL PRODUCTIONS LLC

 

 

 

By:  /s/ John Turitzin

Name: John Turitzin

Title: Executive Vice President

 

 

MVL RIGHTS LLC

 

 

 

By:   /s/ John Turitzin

Name: John Turitzin

Title: Executive Vice President

 

 

 

 

 

HSBC BANK USA, NATIONAL ASSOCIATION, as Collateral Agent

 

 

By:  /s/ Stephen Ferrera

Name: Stephen Ferrera

Title: Vice President

 

 

 

 

Schedule 3.07 to the

Insurance Agreement

 

Covered Obligations

 

The present and future obligations of the Section 3.07 Parties set forth in the
following sections of the Operative Documents are the “Covered Obligations”
under Section 3.07 of the Insurance Agreement, provided (i) that in no event
shall anything in this Schedule 3.07 be construed to expand any obligation of
MEI under Section 3.07 of the Insurance Agreement beyond the relevant Covered
Obligation, (ii) that with respect to any obligation in respect of the payment
or expenditure of funds, the obligation of MEI under Section 3.07 of the
Insurance Agreement in respect thereof shall be limited to the extent that there
are funds available to the relevant Section 3.07 Party to make such payment
pursuant to the terms of the relevant Operative Document and MEI is not legally
barred from causing such payment to be made, and (iii) that the obligations of
MEI under Section 3.07 of the Insurance Agreement with respect to certain of the
Covered Obligations are limited as set forth below under “Limitations”:

 

A. Section 3.07 Party: MVL

 

Credit Agreement Sections 2.02(d), 2.05, 2.06, 2.08(b), 3.01(c), 3.02, 3.03(c),
4.03(a), 4.03(b), 4.07, 7.01 (excluding clauses (g)(i)(A), (i) and (j)), 7.02,
and 7.03.

 

Master Agreement Section 7(b).

 

Limitations:

 

Credit Agreement Section 3.03(c)(y)(i): Covered Obligation with respect to
satisfaction of the conditions precedent to fundings shall be limited to the
actual knowledge of Responsible Officers of MEI.

 

Credit Agreement Section 7.03(a): Covered Obligation with respect to “suffer to
exist” Adverse Claims shall be limited to taking reasonable actions to remove
such Adverse Claims.

 

Credit Agreement Section 7.03(b): Covered Obligation with respect to “suffer to
exist” Indebtedness shall be limited to taking reasonable actions to discharge
such Indebtedness.

 

Credit Agreement Section 7.03(g): Covered Obligation with respect to “suffer to
exist” negative pledge agreements shall be limited to taking commercially
reasonable actions to avoid such agreements.

 

B. Section 3.07 Party: MPROD

 

 

 

 

 

Master Agreement Sections 2(e)(ii), 3(c)(v), 3(f), 3(g), 3(k), 7(a) (excluding
7(a)(vi)(A) and 7(a)(xii)), 7(c), 8, and 9.

 

Master Distributor Security Agreement Sections 6, 7, and 10.

 

Limitations: Master Agreement Section 7(a)(vii)(x): Covered Obligation shall be
limited to maintaining insurance if procured.

 

Master Agreement Section 7(a)(viii): Covered Obligation shall be limited to
maintaining each Completion Bond if procured.

 

Master Agreement Section 7(c)(i): Covered Obligation with respect to “suffer to
exist” Adverse Claims shall be limited to taking reasonable actions to remove
such Adverse Claims.

 

C.

Section 3.07 Party: Each Production Company (as defined in the Master Agreement)

 

Production Services Agreement Sections 12 and 15.

 

D.           The following Covered Obligations are the “Specified Covered
Obligations” under Section 3.07 of the Insurance Agreement:

 

Credit Agreement Sections 7.01(a), 7.02(c) and 7.02(d).

 

Master Agreement Sections 3(c)(v) (with respect to the Insurer’s rights to
respond), 3(f) (second sentence), 3(g), 3(k) (penultimate sentence), 7(a)(i),
7(a)(vi), 7(a)(vii)(y), 7(a)(ix)(E), 7(a)(x), 7(a)(xi), 7(c)(iv)(ii), 8, and 9.

 

Production Services Agreement Sections 12 and 15.