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Exhibit 10.1 EMAK WORLDWIDE, INC.
EIGHTH AMENDMENT AND WAIVER
TO CREDIT AGREEMENT This EIGHTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT(this Agreement) is dated as of March
30, 2005 and entered into by and among EMAK Worldwide, Inc. (formerly known as Equity Marketing,
Inc.), a Delaware corporation (Company), the financial institutions listed on the signature pages
hereof (Lenders), Bank of America, N.A., as administrative agent for Lenders (Administrative
Agent), Equity Marketing Hong Kong, Ltd., a Delaware corporation (EMHK), Corinthian Marketing,
Inc., a Delaware corporation (CMI), Equity Marketing, Inc., a Delaware corporation (EMI),
Upshot, Inc., a Delaware corporation (Upshot), SCI Promotion, Inc., a Delaware corporation
(SCI), Logistix, Inc., a Delaware corporation (Logistix), Pop Rocket, Inc., a Delaware
corporation (Pop Rocket), EMAK Worldwide Service Corp., a Delaware corporation (EMAK
Worldwide), and Johnson Grossfield, Inc., a Delaware corporation (JGI), EMAK Hong Kong Limited,
a Hong Kong company (EMAK Hong Kong), and EMAK China Limited, a Hong Kong company (EMAK China,
and together with Company, EMHK, CMI, EMI, Upshot, SCI, Logistix, Pop Rocket, EMAK Worldwide, JGI
and EMAK Hong Kong, Grantors), is made with reference to that certain Credit Agreement dated as
of April 24, 2001, as amended by that certain First Amendment dated as of November 14, 2001, that
certain Second Amendment dated as of February 8, 2002, that certain Third Amendment and Waiver
dated as of September 30, 2002, that certain Fourth Amendment dated as of November 14, 2003, that
certain Fifth Amendment dated as of April 26, 2004, that certain Sixth Amendment dated as of August
12, 2004 and that certain Seventh Amendment and Waiver dated as of November 15, 2004 (as so
amended, the Credit Agreement), by and among Company, Lenders and Administrative Agent, and to
the Security Agreement described below. Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Credit Agreement. RECITALS WHEREAS, Company and Lenders desire to amend the Credit Agreement as set forth below; WHEREAS, Company and Lenders desire that Lenders waive Companys compliance with certain
provisions of the Credit Agreement; and WHEREAS, Grantors and Lenders desire to amend that certain Security Agreement dated as of
April 24, 2001, as amended by that certain First Amendment to Security Agreement dated as of
September 30, 2002, by and among Grantors and Administrative Agent on behalf of Lenders (as so
amended, the Security Agreement); NOW, THEREFORE,in consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows: 1




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Section 1. AMENDMENTS TO CREDIT AGREEMENT AND SECURITY AGREEMENT 1.1Amendments to Section 1.01. Defined Terms (A) Section 1.01 of the Credit Agreement is hereby amended by adding thereto the following
definition, which shall be inserted in proper alphabetical order: Consolidated Total Liabilities means, as of any date of determination, total
liabilities of Borrower and its Subsidiaries on a consolidated basis as determined in accordance
with GAAP. Consolidated Tangible Net Worth means, as of any date of determination, (i) total
assets of Borrower and its Subsidiaries on a consolidated basis as determined in accordance with
GAAP minus (ii) the sum of (a) total liabilities of Borrower and its Subsidiaries on a
consolidated basis as determined in accordance with GAAP plus (b) Intangible Assets. Eighth Amendment and Waiver to Credit Agreement means that certain Eighth Amendment
and Waiver to Credit Agreement dated as of March 30, 2005, by and among Borrower, certain
Subsidiaries of Borrower, Lenders and Administrative Agent. Eighth Amendment Effective Date means that effective date of that certain Eighth
Amendment and Waiver to Credit Agreement. Intangible Assets means assets of Borrower and its Subsidiaries on a consolidated
basis that are considered to be intangible assets under GAAP, including customer lists, goodwill,
copyrights, trade names, trademarks, patents, franchises and licenses. SOFA means a secured over-advanced facility. SOFA Portion means, as of any date of determination during the SOFA Period, that
portion of the Outstanding Obligations on such date which exceeds the Borrowing Base then in
effect. SOFA Period means a period from and including May 1, 2005 to and excluding July 31,
2005. (B) The definition of Applicable Amount is hereby amended by adding the following fourth
proviso after the table: ; provided further, that to the extent that the SOFA Portion is greater than
zero, such SOFA Portion shall be attributed to Eurodollar Rate Loans then outstanding and to the
extent that such SOFA Portion is greater than the aggregate principal amount of Eurodollar Rate
Loans then outstanding, then to Base Rate Loans then outstanding and the Applicable Amount for
SOFA Portion of Revolving Loans which are Eurodollar Rate Loans shall be 3.00% and the Applicable
Amount for SOFA Portion of Revolving Loans (without duplication) which are Base Rate Loans shall be
1.25% during the SOFA Period. 2




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(C) The definition of Applicable Average Commitment Amount is hereby amended by deleting the
reference to 15% of the outstanding principal amount of the Combined Commitments contained
therein and substituting 15% of the average amount of the Outstanding Obligations for such Fiscal
Quarter therefor. (D) The definition of Eligible Inventory Advance Rate is hereby amended by deleting it in
its entirety therefrom and substituting the following therefor: Eligible Inventory Advance Rate means 0%. (E) The definition of Maturity Date is hereby amended by deleting the reference to June 30,
2005 contained therein and substituting March 31, 2006 therefor. 1.2Amendment to Section 2: The Commitments and Extensions of Credit (A) Subsection 2.01(a) of the Credit Agreement is hereby amended by (1) adding the following
provisos at the end of the second sentence of such subsection 2.01(a): ; provided, that from and including March 30, 2005, the aggregate amount of the
Revolving Loan Commitments shall be automatically reduced to $20,000,000, and (2) adding the following at the end of clause (iii) appearing at the end of such
subsection 2.01(a): (or, during the SOFA Period, the lesser of (1) the combined Revolving Loan Commitments then
in effect (as reduced from time to time pursuant to Section 2.05 or 2.06 or
otherwise), or (2) the Borrowing Base then in effect plus, at any time that the Borrowing Base is
greater than or equal to $15,000,000, $3,000,000). (B) Subsection 2.03(a) of the Credit Agreement is hereby amended by adding the following at
the end of clause (ii) of such subsection 2.03(a): (or, during the SOFA Period, the lesser of (1) the combined Revolving Loan Commitments then
in effect (as reduced from time to time pursuant to Section 2.05 or 2.06 or
otherwise), or (2) the Borrowing Base then in effect plus, at any time that the Borrowing Base is
greater then or equal to $15,000,000, $3,000,000). (C) Subsection 2.04(a) of the Credit Agreement is hereby amended by adding the following at
the end of such subsection 2.04(a): (or, during the SOFA Period, the lesser of (1) the combined Revolving Loan Commitments then
in effect (as reduced from time to time pursuant to Section 2.05 or 2.06 or
otherwise), or (2) the Borrowing Base then in effect plus, at any time that the Borrowing Base is
greater then or equal to $15,000,000, $3,000,000). (D) Subsection 2.05(c) is hereby amended by adding at the end of the phrase (2) the Borrowing
Base then in effect appearing therein the following: 3




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(or, during the SOFA Period, the lesser of (1) the combined Revolving Loan Commitments then
in effect (as reduced from time to time pursuant to Section 2.05 or 2.06 or
otherwise), or (2) the Borrowing Base then in effect plus, at any time that the Borrowing Base is
greater then or equal to $15,000,000, $3,000,000). 1.3Amendments to Section 6: Affirmative Covenants (A) Section 6.13 of the Credit Agreement is hereby amended by adding at the end thereof the
following: Notwithstanding anything to the contrary in this Section 6.13, (i) with respect to EMAK
Europe Holdings Ltd., a United Kingdom company (EMAK Europe), EMAK Hong Kong, EMAK China, EMAK
Asia Holdings Company Limited, a Hong Kong company, and Megaprint Group Limited, a United Kingdom
company (Megaprint), Borrower shall deliver, or cause to be delivered, to Administrative Agent
the applicable items set forth above (which shall include an equitable charge governed by the law
of the United Kingdom) on or prior to May 15, 2005 and, (ii) with respect to EMI, Upshot, SCI,
Logistix, Pop Rocket and EMAK Worldwide, Borrower shall deliver, or cause to be delivered, to
Administrative Agent the applicable items set forth above on or prior to April 19, 2005, including
without limitation with respect to each such Domestic Subsidiary, (a) the applicable items required
by Section 4.01(iii) , 4.01(vi) and 4.01(j) hereof (to the extent not
delivered on or prior to the Eighth Amendment Effective Date), (b) the legal opinions described in
Section 6.13(c) (which the Grantors hereby agree are being requested by Administrative
Agent), (c) executed Grant of Trademark Security Interest, Grant of Patent Security Interest and
Grant of Copyright Security Interest (in each case to the extent required by Administrative Agent),
and (d) collateral documents relating to Real Property Assets of such Subsidiaries. Borrower
hereby represents and warrant that, as of the Eighth Amendment Effective Date, EMAK Europe does not
hold any assets other than stock of Megaprint, EMAK Europe Services Limited, a United Kingdom
company (EMAK Europe Services) and Prodesign Marketing Limited, a United Kingdom company
(Prodesign) and hereby covenants that, after the Eighth Amendment Effective Date, it will not own
any assets other than the stock of Megaprint, EMAK Europe Services, Prodesign and Logistix Limited,
a United Kingdom company. 1.4Amendments to Section 7: Negative Covenants (A) Section 7.06 of the Credit Agreement is hereby amended by deleting the reference to
$28,000,000 contained therein and substituting $15,000,000 therefor. (B) Section 7.12 of the Credit Agreement is hereby amended as follows: (i) Subsection 7.12(a) is hereby amended by (1) deleting the reference to
1.30:1.00 appearing at the end thereof and substituting 0.60:1.00 therefor, and
(2) adding the following proviso after the table: ; provided, that this Section 7.12(a) shall not apply for the Fiscal Quarters ending
on March 31, 2005, June 30, 2005 and September 30, 2005. 4




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(ii) Subsection 7.12(b) of the Credit Agreement is hereby amended by (1)
deleting the reference to 2.00:1.00 contained in clause (iv) thereof and
substituting 2.25:1.00 therefor, and (2) adding the following at the end thereof: ; provided further, that this Section 7.12(b) shall not apply from
and including March 31, 2005 through and including December 30, 2005. (iii) Subsection 7.12(c) of the Credit Agreement is hereby amended by adding
the following proviso: ; provided, that this Section 7.12(c) shall not apply for the Fiscal Quarters
ending on March 31, 2005, June 30, 2005 and September 30, 2005 (it being agreed for purposes of
clarification that (i) if as of December 31, 2005, Consolidated Net Income were less than zero for
both the Fiscal Quarter ending on September 30, 2005 and December 31, 2005, then this Section
7.12 (c) shall have been breached as of December 31, 2005 and (ii) if as of March 31, 2006,
Consolidated Net Income were less than zero for both the Fiscal Quarter ending on December 31, 2005
and March 31, 2006, then this Section 7.12 (c) shall have been breached as of March 31,
2006). (iv) Section 7.12 is hereby further amended by adding the following clauses (d)
through (f) at the end of such Section: (d) Minimum Consolidated EBITDA. Permit the Consolidated EBITDA for the one Fiscal
Quarter period ending as of March 31, 2005, two Fiscal Quarters period ending as of June 30, 2005,
three Fiscal Quarters period ending as of September 30, 2005 and four Fiscal Quarters period ending
as of December 31, 2005 to be less than the correlative amount set forth below: Period Ending on
    
    Minimum Consolidated EBITDAMarch 31, 2005
    
    ($4,500,000)June 30, 2005
    
    ($3,400,000)September 30, 2005
    
    $100,000December 31, 2005
    
    $6,000,000
 (e) Minimum Consolidated Tangible Net Worth. Permit the Consolidated Tangible Net
Worth at any time from and including March 31, 2005 through and including December 31, 2005 to be
less than the correlative amount set forth below: Period
    
    Consolidated Tangible Net WorthMarch 31, 2005
    
    $17,900,000Fiscal Quarter Ending on June 30, 2005
    
    $18,000,000Fiscal Quarter Ending on September 30, 2005
    
    $20,000,000Fiscal Quarter Ending on December 31, 2005
    
    $22,500,000
 5




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(f) Maximum Consolidated Total Liabilities to Consolidated Tangible Net Worth Ratio.
Permit the Consolidated Total Liabilities to Consolidated Tangible Net Worth Ratio as of the last
day of any Fiscal Quarter set forth below to be more than the correlative ratio indicated: Consolidated Total Liabilities to ConsolidatedFiscal Quarter Ending on
    
    Tangible Net Worth RatioMarch 31, 2005
    
    2.55:1.00June 30, 2005
    
    3.00:1.00September 30, 2005
    
    3.50:1.00December 31, 2005
    
    3.15:1.00
 1.5Amendments to Exhibit B: Compliance Certificate Exhibit B of the Credit Agreement is hereby amended by deleting it in its entirety and
substituting therefor the compliance certificate in the form of Exhibit A attached hereto. 1.6Amendments to Security Agreement Section 1 of the Security Agreement is hereby amended by deleting the second to last paragraph
of such Section 1 in its entity and substituting the following therefor: Notwithstanding anything herein to the contrary (but subject to the last sentence of this
paragraph), in no event shall the Collateral include, and no Grantor shall be deemed to have
granted a security interest in (i) any of such Grantors rights or interests in any license,
contract or agreement to which such Grantor is a party or any of its rights or interests thereunder
to the extent, but only to the extent, that such a grant would, under the terms of such license,
contract or agreement or otherwise, result in a breach of the terms of, or constitute a default
under any license, contract or agreement to which such Grantor is a party (other than to the extent
that any such term would be rendered ineffective pursuant to the UCC, as it exists on the date of
this Agreement or as it may hereafter be amended, in the State of California or any other
applicable law (including the Bankruptcy Code) or principles of equity); provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include,
and such Grantor shall be deemed to have granted a security interest in, all such rights and
interests as if such provision had never been in effect, or (ii) any real property leasehold,
unless a Grantor has executed a leasehold mortgage or leasehold deed of trust covering such real
property leasehold. Notwithstanding the foregoing, in no event shall the forgoing sentence (or the
operation thereof) exclude any Inventory or Accounts from the Collateral. 6




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Section 2. WAIVER (A) Subject to the terms and conditions set forth herein and in reliance on the
representations and warranties of Company herein contained, Lenders hereby waive compliance with
the provisions of (i) subsection 7.12(a) of the Credit Agreement to the extent, and only to the
extent, that it applies to the Fiscal Quarter ending December 31, 2004, (ii) subsection 7.12(b) of
the Credit Agreement to the extent, and only to the extent, that it applies from and including
October 1, 2004 to and including March 30, 2005, and (iii) subsection 7.12(c) of the Credit
Agreement to the extent, and only to the extent, that it applies to the Fiscal Quarter ending
December 31, 2004. (B) Without limiting the generality of the provisions of Section 10.01 of the Credit
Agreement, the waiver set forth above shall be limited precisely as written and relates solely to
the extent Company would otherwise be in noncompliance with the provisions of subsections 7.12(a),
7.12(b) and 7.12(c) of the Credit Agreement in the manner and to the extent described above, and
nothing in this Agreement shall be deemed to: (i) constitute a waiver of compliance by Company with respect to (i)
subsections 7.12(a), 7.12(b) and 7.12(c) of the Credit Agreement in any other
instance or (ii) any other term, provision or condition of the Credit Agreement or
any other instrument or agreement referred to therein (whether in connection with
this Agreement or otherwise); or (ii) prejudice any right or remedy that Administrative Agent or any Lender may
now have (except to the extent such right or remedy was based upon existing defaults
that will not exist after giving effect to this Agreement) or may have in the future
under or in connection with the Credit Agreement or any other instrument or
agreement referred to therein. (C) Except as expressly set forth herein, the terms, provisions and conditions of the Credit
Agreement and the other Loan Documents shall remain in full force and effect and in all other
respects are hereby ratified and confirmed. Section 3. CONDITIONS TO EFFECTIVENESS Sections 1 and 2 of this Agreement shall become effective only upon the satisfaction of the
following conditions precedent (the date of satisfaction of such conditions being referred to as
the Eighth Amendment Effective Date: (A) On or before the Eighth Amendment Effective Date, Company shall deliver to Lenders (or to
Administrative Agent for Lenders) executed copies of this Agreement signed by each Grantor. (B) On or before the Eighth Amendment Effective Date, each Grantor shall have delivered the
items described in Schedule A attached hereto. (C) On or before the Eighth Amendment Effective Date, Company shall pay to Administrative
Agent an amendment fee equal to $50,000.00. 7




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(D) On or before the Eighth Amendment Effective Date, Company shall pay to counsel
to Administrative Agent all outstanding legal fees owing to counsel to Administrative Agent
(including fees accrued in connection with the Eighth Amendment and amounts reasonably estimated to
be incurred in connection therewith). Section 4. COMPANYS REPRESENTATIONS AND WARRANTIES In order to induce Lenders to enter into this Agreement and thereby amend the Credit Agreement
in the manner provided herein, Company represents and warrants to each Lender that the following
statements are true, correct and complete: 4.1Corporate Power and Authority.Each Grantor has all requisite corporate power and
authority to enter into this Agreement and to carry out the transactions contemplated by, and
perform its obligations under, the Credit Agreement as amended by this Agreement (as so amended,
the Amended Agreement) and the Security Agreement as amended by this Agreement (the Amended
Security Agreement). 4.2Authorization of Agreements.The execution and delivery of this Agreement and the
performance of the Amended Agreement and the Amended Security Agreement have been duly authorized
by all necessary corporate action on the part of each Grantor. 4.3Binding Obligation.This Agreement, the Amended Agreement and the Amended
Security Agreement are, together, the legal, valid and binding obligation of each Grantor party
hereto or thereto, enforceable against it in accordance with their terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors rights generally or by equitable principles, and any instrument or agreement
required hereunder or by the Amended Agreement or the Amended Security Agreement, in each case,
when executed and delivered, will be similarly valid, binding and enforceable. 4.4Incorporation of Representations and Warranties From Credit Agreement and Security
Agreement.The representations and warranties contained in Section 5 of the Credit Agreement
and in Section 4 of the Security Agreement are true, correct and complete in all material respects,
except to the extent such representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects on and as of such earlier
date. 4.5Absence of Default.No event has occurred and is continuing or will result from
the consummation of this Agreement that would constitute an Event of Default or a Default. Section 5. MISCELLANEOUS 5.1Reference to and Effect on the Credit Agreement and the Other Loan Documents. 8




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(A) On and after the Eighth Amendment Effective Date, each reference in the Credit Agreement
to this Agreement, hereunder, hereof, herein or words of like import referring to the
Credit Agreement, and each reference in the other documents entered pursuant to the Credit
Agreement to the Credit Agreement, thereunder, thereof or words of like import referring to
the Credit Agreement shall mean and be a reference to the Amended Agreement. On and after the
Eighth Amendment Effective Date, each reference in the Security Agreement to this Agreement,
hereunder, hereof, herein or words of like import referring to the Security Agreement, and
each reference in the other documents entered pursuant to the Security Agreement to the Security
Agreement, thereunder, thereof or words of like import referring to the Security Agreement
shall mean and be a reference to the Amended Security Agreement. (B) Except as specifically amended by this Agreement, the Credit Agreement, the Security
Agreement and the other documents entered pursuant to the Credit Agreement shall remain in full
force and effect and are hereby ratified and confirmed. (C) The execution, delivery and performance of this Agreement shall not, except as expressly
provided herein, constitute a waiver of any provision of, or operate as a waiver of any right,
power or remedy of Administrative Agent or any Lender under the Credit Agreement or any of the
other Loan Documents. 5.2Headings.Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect. 5.3California Law.This Agreement shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of California, without regard to
conflicts of laws principles. 5.4Counterparts; Effectiveness.This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages are physically
attached to the same document. This Agreement (other than the provisions of Sections 1 and 2
hereof, the effectiveness of which is governed by Section 3 hereof) shall become effective upon the
execution of a counterpart hereof by each Grantor and Lenders and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and authorization of
delivery thereof. Section 6. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS Each of EMHK, CMI, EMI, Upshot, SCI, Logistix, Pop Rocket, EMAK Worldwide, JGI, EMAK Hong Kong
and EMAK China (Guarantors) hereby acknowledges that it has read this Agreement and consents to
the terms thereof, and hereby confirms and agrees that, notwithstanding the effectiveness of this
Agreement, the obligations of each Guarantor under its applicable Subsidiary Guaranty shall not be
impaired or affected and the applicable 9




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Subsidiary Guaranty is, and shall continue to be, in full force and effect and is hereby
confirmed and ratified in all respects. Each Guarantor further agrees that nothing in the Credit
Agreement, this Agreement or any other Loan Document shall be deemed to require the consent of such
Guarantor to any future amendment to the Credit Agreement. [Remainder of page intentionally left blank] 10




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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date first written
above. EMAK WORLDWIDE, INC.EQUITY MARKETING HONG KONG, LTD.CORINTHIAN MARKETING, INC.EQUITY MARKETING, INC.UPSHOT, INC.SCI PROMOTION, INC.LOGISTIX, INC.POP ROCKET, INC.EMAK WORLDWIDE SERVICE CORP.JOHNSON GROSSFIELD, INC.EMAK HONG KONG LIMITEDEMAK CHINA LIMITEDBy:Name: Zohar ZivTitle: Chief Financial Officer
 S -1




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BANK OF AMERICA, N.A.,as Administrative AgentBy:Name: Ken PuroTitle: Vice President
 S -2




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BANK OF AMERICA, N.A.,as Lender, Swing Line Lender
and Issuing LenderBy:Name:Title:
 S -3




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Schedule A A. From each of EMI, Upshot, SCI, Logistix, Pop Rocket and EMAK Worldwide (the New Subsidiaries): 1. Executed Security Agreement Counterpart; 2. Executed Subsidiary Guaranty Counterpart; 3. Secretarys Certificate certifying as to the attached Resolutions and incumbency
certificate; 4. UCC-1 Financing Statements; 5. Good Standing Certificate from the Secretary of State of the State of Delaware; and 6. Certificate of Incorporation certified by the Secretary of State of the State of Delaware. B. From the Company: 1. Executed Pledge Supplement; 2. Updated Schedules to the Credit Agreement and the Security Agreement in the form attached
as Exhibit B to this Agreement; 3. Stock Certificates for each of the New Subsidiaries with blank Stock Powers attached; 4. Secretarys Certificate certifying as to the incumbency certificate; 5. Good Standing Certificate from the Secretary of State of the State of Delaware; and 6. Certificate of Incorporation certified by the Secretary of State of the State of Delaware. C. From EMHK and CMI: 1. Good Standing Certificate from the Secretary of State of the State of Delaware; and 2. Certificate of Incorporation certified by the Secretary of State of the State of Delaware. A - 1




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C. From JGI: 1. Good Standing Certificate from the Secretary of State of the State of Delaware; 2. Certificate of Incorporation certified by the Secretary of State of the State of Delaware;
and 3. UCC-1 Financing Statements. A - 2