Document:

exv10w40

Exhibit 10.40

AMENDMENT NO. 1 TO

SECURITIES PURCHASE AGREEMENT

     AMENDMENT NO. 1 dated as of August 7, 2007 (“Amendment”) to the Securities Purchase
Agreement dated as of June 27, 2007 (as amended, restated, supplemented or otherwise modified from
time to time, the “Securities Purchase Agreement”) among THE FILM DEPARTMENT LLC, a
Delaware limited liability company (the “Company”), THE FILM DEPARTMENT HOLDINGS LLC, a
Delaware limited liability company (“Holdings”), the Purchasers named therein and GENERAL
ELECTRIC CAPITAL CORPORATION, as collateral agent for the Secured Parties defined therein (in such
capacity, and together with its successors and permitted assigns, the “Collateral Agent”).
Terms defined in the Securities Purchase Agreement and not otherwise defined herein are used herein
as therein defined.

R E C I T A L S

     The Company, Holdings and the Required Holders have agreed to amend the Securities Purchase
Agreement in accordance with, and pursuant to the terms and conditions set forth in, this
Amendment.

     In consideration of the mutual agreements herein contained and other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto
agree as follows:

     Section 1. Amendments to Section 1.1 of the Securities Purchase Agreement. (a) The following
definitions hereby are inserted in Section 1.1 of the Securities Purchase Agreement in the proper
alphanumerical order

     “Amendment No. 1” means Amendment No. 1 to Securities Purchase Agreement dated
as of August 7, 2007 among the Company, Holdings, the Required Holders and the Collateral
Agent.

     “First Amendment Effective Date” means the first date on which all conditions
set forth in Section 9 of Amendment No. 1 have been satisfied.

     “Incremental Revolving Commitments” has the meaning specified in the Credit
Agreement (as in effect on the date hereof).

     (b) The following definition appearing in Section 1.1 of the Securities Purchase Agreement
hereby is deleted: “Consolidated Net Worth”

     Section 2. Amendment to Section 2.6 of the Securities Purchase Agreement. Section 2.6 of the
Securities Purchase Agreement hereby is amended and restated in its entirety as follows:

     Section 2.6 Optional Prepayments. The Company may, at any time or from time to
time after the first anniversary of the Closing Date and so long as all amounts outstanding
under the Credit Agreement have been paid in full, all commitments thereunder have been
terminated and any letters of credit issued thereunder cash collateralized in the manner
provided therein (or to the extent such payments are otherwise permitted under the Credit
Agreement as a result of an amendment thereto or waiver thereof following the Closing Date),
prepay the Notes in whole or from time to time in part (any such partial prepayment to be
made pro rata among the Holders, and in a minimum aggregate amount of
$1,000,000), at the redemption prices (expressed as

 

 

percentages of the principal amount of the Notes being prepaid) set forth below, plus
interest accrued thereon (if any) to the Prepayment Date, if redeemed during the 12-month
period ending June 27, in each of the years set forth below:

	 	 	 	 	 
	12 Month Period Ending	 	Redemption Price
	June 27, 2008
	 	Non-redeemable
	June 27, 2009
	 	 	106	%
	June 27, 2010
	 	 	104	%
	June 27, 2011
	 	 	102	%
	June 28, 2012
	 	 	101	%
	June 28, 2013, and thereafter
	 	 	100	%

     Anything in this Agreement to the contrary notwithstanding, the Company may not make
any optional prepayment on the Notes, whether pursuant to this Section 2.6 or
otherwise, and whether in whole or in part, if such prepayment would result in a Default or
an Event of Default.

     The Company will not, and will not permit any Affiliate to, purchase, redeem, repay or
otherwise acquire, directly or indirectly, any of the outstanding Notes, except in
accordance with the terms of this Section 2.6 or Sections 2.8 or
11.2(b). The Company shall, and shall cause each other Note Party or Affiliate, to
cancel promptly all Notes acquired by it, and no Notes may be issued in substitution or
exchange for any such Notes.

     Section 3. Amendments to Section 8.1(f) and (g) to the Securities Purchase Agreement.
Sections 8.1(f) and (g) of the Securities Purchase Agreement hereby are amended and restated in its
entirety as follows:

     (f) Indebtedness of the Company owing under the Credit Agreement, including Guaranty
Obligations of the Guarantors in respect thereof, in an aggregate outstanding principal
amount not to exceed at any time (i) the sum of (x) $140,000,000, plus (y) an amount equal
to the aggregate Incremental Revolving Commitments under the Credit Agreement (but not to
exceed an aggregate of $85,000,000), plus (z) an amount equal to 10% of the sum of the
preceding clauses (x) and (y) less (ii) the amount of any permanent commitment reductions
thereunder (other than to the extent constituting a refinancing with a replacement first
lien credit facility in accordance with the terms of the Intercreditor Agreement); and

     (g) to the extent the same may constitute Indebtedness hereunder, liabilities of a
Group Member (other than Holdings) relating to profit participations and other contingent
compensation, including royalties, deferments and guild residuals with respect to the
development, production, distribution or other exploitation of Qualifying Films;
provided, that the aggregate amount of all payment obligations in respect thereof in
excess of $1,000,000 reduce on a dollar for dollar basis Borrowing Availability without any
double counting.

     Section 4. Amendment to Section 8.5(c)(ii) of the Securities Purchase Agreement. Section
8.5(c)(ii) of the Securities Purchase Agreement hereby is amended and restated in its entirety as
follows:

     (ii) Reserved; and

2

 

     Section 5. Restatement of Schedule II to the Securities Purchase Agreement. Schedule II to
the Securities Purchase Agreement hereby is amended and restated in its entirety in the form
attached hereto as Amended and Restated Schedule II.

     Section 6. Restatement of Exhibit A to the Securities Purchase Agreement. Exhibit A to the
Securities Purchase Agreement hereby is amended and restated in its entirety in the form attached
hereto as Amended and Restated Exhibit A.

     Section 7. Consent of Holdings; Consent of Holders.

     (a) Holdings hereby acknowledges and consents to this Amendment, and affirms and
acknowledges that the Guaranty and Security Agreement and each other Note Document executed
and delivered by Holdings remains in full force and effect and that Holdings remains
obligated thereunder without defense, offset or counterclaim of any kind whatsoever, as if
each such Note Document were executed and delivered to Collateral Agent and the Purchasers
(or their assigns) on the date hereof.

     (b) The Required Holders hereby consent to the amendment to the Credit Agreement
contemplated by Section 9(d) hereof.

     Section 8. Representations and Warranties. To induce the Required Holders to enter into this
Amendment, the Company and Holdings represent and warrant to the Required Holders that:

     (a) Representations and Warranties in Note Documents. Each of the
representations and warranties of the Company and Holdings contained in the Note Documents
to which each is a party (i) were true and correct in all material respects when made and
(ii) after giving effect to this Amendment, continue to be true and correct in all material
respects on the date hereof (except to the extent that such representations and warranties
relate expressly to an earlier date).

     (b) Authority. The execution and delivery by the Company and Holdings of this
Amendment and each other document to be executed by either thereof in accordance with the
terms hereof and the performance by the Company and Holdings of their respective obligations
under the Securities Purchase Agreement as amended hereby (i) are within its power and
authority, (ii) have been duly authorized by all necessary proceedings, (iii) do not (A)
contravene the Constituent Documents of either Person, (B) violate any applicable
Requirement of Law, (C) conflict with, contravene, constitute a default or breach under, or
result in or permit the termination or acceleration of, any material Contractual Obligation
of either Person or any of its Subsidiaries (including other Related Documents or Note
Documents) other than those that would not, in the aggregate, have a Material Adverse Effect
or (D) result in the imposition of any Lien (other than a Permitted Lien) upon any property
of any either Person or any of their respective Subsidiaries and (iv) do not require any
Permit of, or filing with, any Governmental Authority or any consent of, or notice to, any
Person.

     (c) Enforceability. Each Note Document (including the Securities Purchase
Agreement, as amended hereby) constitutes a legal, valid and binding obligation of the
Company or Holdings, as the case may be, enforceable against such Person in accordance with
its terms.

     (d) No Default. After giving effect to this Amendment, no Default or Event of
Default exists.

3

 

     Section 9. Conditions to Effectiveness. This Amendment shall become effective on the date
when the following conditions precedent have been satisfied (such date, the “Effective
Date”):

     (a) The Company, Holdings, the Required Holders and the Collateral Agent shall have
executed and delivered this Amendment.

     (b) The Company shall have executed and delivered to each Holder a replacement Note in
the form of the Amended and Restated Exhibit A attached hereto.

     (c) Holdings shall have executed and delivered to each Holder a Notation of Guaranty in
respect of each Note executed and delivered in connection with the preceding clause (b).

     (d) The Required Holders shall have received a certified copy of an amendment to the
Credit Agreement providing consents and amendments substantially similar to those provided
herein.

     (e) The representations and warranties set forth in Section 8 hereof shall be true and
correct on the date hereof and on the Effective Date.

     (f) No injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the consummation of the transactions contemplated herein shall have
been issued and remain in force by any Governmental Authority against the Company, Holdings
or any Holder.

     (g) The Company shall have paid all reasonable out-of-pocket costs and expenses of the
Holders, to the extent invoices therefor have been presented.

     (h) All other documents and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered or executed or recorded and shall
be in form and substance reasonably satisfactory to the Required Holders.

     Section 10. Ratification and Incorporation of Securities Purchase Agreement; No Novation. The
Company and Holdings expressly acknowledge and agree with each of the following:

     (a) except as expressly modified under this Amendment, (i) each of Company and Holdings
hereby acknowledges, confirms, and ratifies all of the terms and conditions set forth in,
and all of its obligations under (including all Liens granted pursuant to), the Securities
Purchase Agreement and the other Note Documents and (ii) all of the terms and conditions set
forth in the Securities Purchase Agreement and the other Note Documents are incorporated
herein by this reference as if set forth in full herein;

     (b) except as expressly modified under this Amendment, the execution, delivery, and
effectiveness of this Amendment shall not (i) limit, impair, constitute a waiver of, or
otherwise affect any right, power, or remedy of any Secured Party under the Securities
Purchase Agreement or any other Note Document, (ii) constitute a waiver of any provision in
the Securities Purchase Agreement or in any of the other Note Documents, or (iii) alter,
modify, amend, or in any way affect any of the terms, conditions, obligations, covenants, or
agreements contained in the Securities Purchase Agreement, all of which are ratified and
affirmed in all respects and shall continue in full force and effect; and

4

 

     (c) That the Warrants may be transferred separately from the Notes, subject to the
transfer restrictions reflected in the Amended and Restated Holdings LLC Agreement, the
Warrants and the Securities Purchase Agreement and compliance with applicable securities
laws.

     Section 11. Reference to and Effect on Securities Purchase Agreement.

     (a) Upon the effectiveness of this Amendment, each reference in the Securities Purchase
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import, and each
reference in the other Note Documents to the Securities Purchase Agreement, shall mean and
be a reference to the Securities Purchase Agreement as amended hereby.

     (b) This Amendment shall be a Note Document for all purposes.

     Section 12. Benefits of Amendment. The terms and provisions of this Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns to the extent contemplated by the Note Documents.

     Section 13. Interpretation. The Article and Section headings used in this Amendment are for
convenience of reference only and shall not affect the construction hereof.

     Section 14. Execution in Counterparts. This Amendment may be executed in any number of
counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one and the same
Amendment. Delivery of an executed counterpart of a signature page hereto by facsimile or other
electronic transmission shall be effective as delivery of a manually executed counterpart thereof.

     Section 15. Severability. If any provision of this Amendment shall be held to be invalid,
illegal or unenforceable under applicable law in any jurisdiction, such provision shall be
ineffective only to the extent of such invalidity, illegality or unenforceability, which shall not
affect any other provisions hereof or the validity, legality and enforceability of such provision
in any other jurisdiction.

     Section 16. Governing Law. This Amendment and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with, the law of the State
of New York.

     Section 17. Entire Agreement. This Amendment together with all other instruments, agreements,
and certificates executed by the parties in connection herewith or with reference thereto, embody
the entire understanding and agreement between the parties hereto and thereto with respect to the
subject matter hereof and thereof and supercede all prior agreements, understandings, and
inducements, whether express or implied, oral or written.

[signature pages follow]

5

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
as of the date first set forth above.

	 	 	 	 	 	 	 

	 	 	THE FILM DEPARTMENT LLC	 	 
	 	 	By: THE FILM DEPARTMENT HOLDINGS LLC, its sole Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Mark Gill	 	 
	 

	 	 	 	 

Mark Gill, Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Neil Sacker	 	 
	 

	 	 	 	 

Neil Sacker, President & Chief Operating Officer
	 	 
	 
	 	 	 	 	 	 
	 	 	THE FILM DEPARTMENT HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Mark Gill	 	 
	 

	 	 	 	 

Mark Gill, Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Neil Sacker	 	 
	 

	 	 	 	 

Neil Sacker, President & Chief Operating Officer
	 	 

Amendment No. 1

to The Film Department LLC

Securities Purchase Agreement

 

 

	 	 	 	 	 	 	 

	 	 	GE CAPITAL MARKETS, INC., as a Holder	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Andrew T. Brode	 	 
	 

	 	Name:
	 	Andrew T. Brode
	 	 
	 

	 	Title:	 	MD	 	 

Amendment No. 1

to The Film Department LLC

Securities Purchase Agreement

 

 

	 	 	 	 	 	 	 

	 	 	GENERAL ELECTRIC CAPITAL CORPORATION, 
as Collateral
Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John Bambach	 	 
	 

	 	Name:
	 	John Bambach
	 	 
	 

	 	Its:
	 	Duly Authorized Signatory	 	 

Amendment No. 1

to The Film Department LLC

Securities Purchase Agreement

 

 

AMENDED AND RESTATED

SCHEDULE II

COLLECTION ACCOUNT PAYMENT WATERFALL

          (a) Subject to paragraphs (b), (c) and (d) below, on each Settlement Date (as defined in the
Credit Agreement), the Credit Agreement Administrative Agent shall (if the Credit Agreement
Administrative Agent has approved the Borrower Settlement Statement delivered by the Company)
instruct the Collection Bank in writing to apply all collected and available funds on deposit in
the Collection Account (including any investment earnings received with respect to such funds) in
the following order of priority and in accordance with the Borrower Settlement Statement and the
Collection Account Agreement:

          (i) first, to the extent not deducted directly out of revenues prior to
deposit into the Collection Account or otherwise paid, to the P&R Reserve Account for
payment by the Company to third parties (that are not Affiliates) of participations and
residuals;

          (ii) second, ratably, (A) to the account of the Credit Agreement
Administrative Agent designated in accordance with Section 2.13(a) of the Credit
Agreement, for payment by the Credit Agreement Administrative Agent of (I) the annual
Agency Fee under the Fee Letter and (II) any other fees or expenses of the Credit Agreement
Administrative Agent or the Credit Agreement Collateral Agent for which the Company is
responsible (other than the unused commitment fee), and (B) to the account designated by
the Collateral Agent from time to time, for payment in respect of expenses of the
Collateral Agent, in each case to the extent due and payable;

          (iii) third, to the account of the Credit Agreement Administrative Agent
designated in accordance with Section 2.13(a) of the Credit Agreement, for payment
by the Credit Agreement Administrative Agent of (A) interest and any unused commitment fee
and (B) any letter of credit fees and related issuance expenses to the L/C Issuer;

          (iv) fourth, to the extent the aggregate amount of funds on deposit in the
applicable Borrower Liquidity Reserve Account is less than the applicable Threshold Amount,
to such Borrower Liquidity Reserve Account in the amount of such deficiency;

          (v) fifth, if not otherwise prohibited from being paid or received in
accordance with the Intercreditor Agreement and the Company has not elected to defer the
payment of cash interest on the Notes in accordance with the terms thereof, to the
Company’s operating account for payment of interest in cash on the Notes;

          (vi) sixth, to the Company’s operating account, for distributions to be made
by the Company to Holdings for payment by Holdings to the holders of its Stock to enable
such holders to pay their respective tax obligations with respect to taxable income
allocated to them from Holdings and its Subsidiaries in accordance with Section
8.5(c)(i);

          (vii) seventh, to the account of the Credit Agreement Administrative Agent
designated in accordance with Section 2.13(a) of the Credit Agreement, for payment
by the Credit Agreement Administrative Agent of principal on all revolving loans then
outstanding under the Credit Agreement;

          (viii) eighth, to the account of the Credit Agreement Administrative Agent
designated in accordance with Section 2.13(a) of the Credit Agreement, for payment
by the

 

 

Credit Agreement Administrative Agent of any other obligations or liabilities then due
and payable under the Credit Agreement; and

          (ix) ninth, to the Company’s operating account for use by the Company in
accordance with the provisions of the Agreement and the Operating Budget.

          (b) Subject to paragraphs (c) and (d) below, if, on any Settlement Date, any Approved
Completion Guarantor (i) has advanced amounts under the completion guaranty issued by it with
respect to a Qualifying Film (any such Qualifying Film, a “Designated Film”) and (ii) has
not been reimbursed in full for all amounts advanced by it and all other amounts payable pursuant
thereto, then, notwithstanding the order of priority set forth in paragraph (a) above, at such time
as the aggregate principal amount of loans made under the Credit Agreement in respect of the
Designated Film (together with all interest thereon and fees and costs incurred in connection
therewith to the extent permitted by the Completion Guaranty) have been repaid in full, and the
Company has retained or recouped any sums permitted by the completion guaranty to be retained or
recouped out of such aggregate sums before recoupment by such Approved Completion Guarantor, all
subsequent sums derived from such Designated Film and deposited into the Collection Account shall
be applied (A) first to the Company’s operating account for payment by the Company to such Approved
Completion Guarantor until such Approved Completion Guarantor shall have been reimbursed in full
and (B) second, as provided in paragraph (a) above.

          (c) If the Credit Agreement Collateral Agent (i) notifies the Collection Bank that an “event
of default” has occurred and is continuing under the Credit Agreement Documents and (ii) so
instructs the Collection Bank in its notification thereto (with a copy to the Company), the
Collection Bank shall remit all funds maintained in the Collection Account, to the account of the
Administrative Agent designated in accordance with Section 2.13(a) of the Credit Agreement
for application by the Administrative Agent to the payment of the obligations and other liabilities
of the Company in accordance with the terms of Section 2.12 of the Credit Agreement.

          (d) If (i) the Credit Agreement Collateral Agent notifies the Collection Bank that all
revolving credit commitments under the Credit Agreement have been terminated and the obligations
and liabilities of the Company thereunder have been paid in full in cash and (ii) the Collateral
Agent (A) notifies the Collection Bank that an Event of Default has occurred and is continuing and
(B) so instructs the Collection Bank in its notification thereto, the Collection Bank shall remit
all funds maintained in the Collection Account to the account designated by the Collateral Agent in
its notice to the Collection Bank for payment by the collateral agent to the Holders of the Notes.

 

 

AMENDED AND RESTATED

EXHIBIT A

FORM OF NOTE

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS SECURITY IS SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM AND UPON THE SATISFACTION OF CERTAIN
CONDITIONS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT REFERRED TO BELOW.
WITHOUT LIMITING THE FOREGOING, THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES THAT THIS SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE
TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF
RULE 144(d) UNDER THE ACT, IF APPLICABLE) UNDER THE ACT, AS IN EFFECT ON THE DATE OF
TRANSFER ONLY (1) TO THE COMPANY OR THE FILM DEPARTMENT HOLDINGS LLC, (2) TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN
RULE 144A UNDER THE ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE ACT, (3) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
ACT, (4) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (3) OR (7) OF RULE 501 UNDER REGULATION D UNDER THE ACT THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE COMPANY A SIGNED LETTER SUBSTANTIALLY IN THE
FORM OF EXHIBIT H TO THE SECURITIES PURCHASE AGREEMENT, OR BASED UPON AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, (5) OUTSIDE THE UNITED STATES TO A
NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE ACT,
(6) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND BASED UPON AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, OR
(7) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, AND IN EACH CASE IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.

BY ITS ACQUISITION OF THIS SECURITY THE HOLDER HEREOF WILL BE DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE ASSETS USED BY SUCH
HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES THE ASSETS OF AN EMPLOYEE
BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT

 

 

INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR OF A PLAN, ACCOUNT OR OTHER
ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”), OR OF ANY ENTITY WHOSE UNDERLYING ASSETS ARE
CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR
(II) THE ACQUISITION AND HOLDING OF THIS SECURITY WILL NOT CONSTITUTE A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A
VIOLATION UNDER ANY APPLICABLE SIMILAR LAW.

THIS NOTE IS SUBJECT TO PROVISIONS IN THE SECURITIES PURCHASE AGREEMENT DATED AS OF
JUNE 27, 2007 AMONG THE FILM DEPARTMENT LLC, THE PURCHASERS NAMED THEREIN AND
GENERAL ELECTRIC CAPITAL CORPORATION, AS THE ORIGINAL COLLATERAL AGENT FOR THE
SECURED PARTIES, AS AMENDED FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED FROM
THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR FEDERAL INCOME TAX
PURPOSES. PLEASE CONTACT THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES FOR THE
INFORMATION DESCRIBED IN TREASURY REGULATIONS SECTION 1.1275-3(B)(1)(i).

			
	 	 	 
	No. [___]
	 	                     ___, 20___
	$                     	 	 

SECURED SECOND LIEN NOTE

               
     FOR VALUE RECEIVED, the undersigned, The Film Department LLC, a Delaware limited liability
company (the “Company”), promises to pay                                         , or its registered assigns
(the “Holder”), the principal sum of                                          Dollars ($                    ) plus
all interest that has been capitalized and added to the outstanding principal balance of this Note
on June 27, 2014 (the “Scheduled Maturity Date”), or such earlier date as the obligations
evidenced hereby may become due and payable pursuant to the terms of the Securities Purchase
Agreement (as defined below), and to pay interest (computed on the basis of a year of 360 days and
twelve 30-day months) at a rate per annum equal to the Applicable Interest Rate (as defined below).
The Company promises to pay interest, in arrears, on the outstanding principal amount of the Note
quarterly on March 31, June 30, September 30 and December 31 of each year (each, an “Interest
Payment Date”), commencing on September 30, 2007 (or on the next Business Day following such
date, in the event such date is not a Business Day) and on such date as this Note may be prepaid or
the maturity accelerated. All accrued but unpaid interest required to be paid on any applicable
Interest Payment Date on or before September 30, 2008 shall be paid by being capitalized and added
to the aggregate outstanding principal amount of this Note (and may not be paid in cash). All
interest that has been paid by being capitalized and added to the outstanding principal balance of
this Note shall be due and payable in cash on the Scheduled Maturity Date, or such earlier date as
the obligations evidenced hereby may become due and payable pursuant to the Securities Purchase
Agreement. All accrued but unpaid interest required to be paid after September 30, 2008 shall be
paid in cash; provided, that, so long as no Event of Default shall have occurred and be
continuing and written notice thereof given to the Holder not later than five nor more than 15
Business Days prior to the relevant Interest Payment Date (which notice may not be given in respect
of consecutive Interest Payment Dates or in respect of interest due on the Scheduled Maturity Date
or such earlier date as the obligations

 

 

evidenced hereby may become due and payable pursuant to the Securities Purchase Agreement; and
which notice, if given, shall certify that no Event of Default has occurred and is continuing), the
Company may elect to defer the payment of accrued but unpaid interest due on an Interest Payment
Date occurring after September 30, 2008 to the next succeeding Interest Payment Date, on which date
the Company shall be required to pay in cash (and shall not be permitted to defer in accordance
with the preceding clause the payment of) all accrued but unpaid interest due hereunder for the
preceding two quarterly periods. If an Event of Default has occurred and is continuing, the per
annum interest rate payable in respect of the outstanding principal balance of this Note shall
equal the Applicable Default Interest Rate (computed on the basis of a year of 360 days and twelve
30-day months), which if accruing shall be payable in cash on demand by the Company.

          Terms defined in the Securities Purchase Agreement and not otherwise defined herein are used
herein as therein defined. For the purposes hereof, the following terms shall have the following
meanings:

          “Applicable Default Interest Rate” means a percentage per annum equal to four percent
(4.0%) per annum in excess of the interest rate otherwise applicable to the Obligations.

          “Applicable Interest Rate” means a percentage per annum equal to (a) twelve percent
(12.0%) per annum, if in respect of a period after September 30, 2008 and (b) thirteen and one half
percent (13.5%) per annum, in all other cases.

          This Note is one of a series of Secured Second Lien Notes due 2014 (herein called the
“Notes”) issued pursuant to the Securities Purchase Agreement dated as of June 27, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the “Securities
Purchase Agreement”) among the Company, The Film Department Holdings LLC, a Delaware limited
liability company, as one of the guarantors, the respective Purchasers named therein and General
Electric Capital Corporation, as collateral agent, and is entitled to the benefits thereof and each
other Note Document. Each holder of this Note will be deemed, by its acceptance hereof, (i) to
have agreed to the confidentiality provisions set forth in Section 11.20 of the Securities
Purchase Agreement and (ii) to have made the representations set forth in Article XII of
the Securities Purchase Agreement. This Note is guaranteed by the Guarantors pursuant to the
Guaranty and Security Agreement. The obligations evidenced hereby, and those of the Guarantors
under the Guaranty and Security Agreement, are secured by Liens in the Collateral described in the
Guaranty and Security Agreement and the other Security Documents. This Note and the Liens granted
by the Company and the Guarantors pursuant to the Guaranty and Security Agreement are subject to
the terms of the Intercreditor Agreement.

          This Note is a registered obligation. The right, title and interest of the Holder and its
assignees in and to this Note shall be transferable only upon notation of such transfer in the
register described in Section 11.2 of the Securities Purchase Agreement and no assignment
thereof shall be effective until recorded therein as provided in Section 11.2 of the
Securities Purchase Agreement. This paragraph and Section 11.2 of the Securities Purchase
Agreement shall be construed so that this Note is at all times maintained in “registered form”
within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related
regulations (and any successor provisions). Without limiting the foregoing, as provided in the
Securities Purchase Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal
amount will be issued to, and registered in the name of, the transferee. Prior to due presentment
for registration of transfer, the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all other purposes, and
the Company will not be affected by any

 

 

notice to the contrary.

          Payments of principal of, interest on and any premiums due in respect of this Note are to be
made in lawful money of the United States of America in accordance with Section 2.9 of the
Securities Purchase Agreement.

          This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms and conditions specified in the Securities Purchase Agreement, but not
otherwise.

          If an Event of Default occurs and is continuing, the principal of this Note (including any
capitalized interest) may be declared or otherwise become due and payable in the manner, at the
price and with the effect provided in the Securities Purchase Agreement.

          This Note shall be governed by, and construed and interpreted in accordance with, the law of
the State of New York.

          The Company hereby waives diligence, presentment, demand, protest and notice of any kind
whatsoever. The nonexercise by the Holder of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent instance.

          IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by its duly
authorized officers as of the day and year first above written.

	 	 	 	 	 	 	 

	 	 	THE FILM DEPARTMENT LLC	 	 
	 	 	By: The Film Department Holdings LLC, its sole member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Mark Gill, Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Neil Sacker, President & Chief Operating Officerexv10w41

Exhibit 10.41

AMENDMENT NO. 2

TO

SECURITIES PURCHASE AGREEMENT

     AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT dated as of May 22, 2008 (this
“Amendment”) with respect to the Securities Purchase Agreement dated as of June 27, 2007
(as amended, restated, supplemented or otherwise modified from time to time, the “Securities
Purchase Agreement”) among THE FILM DEPARTMENT LLC, a Delaware limited liability company (the
“Company”), THE FILM DEPARTMENT HOLDINGS LLC, a Delaware limited liability company
(“Holdings”), the Purchasers party thereto and UNION BANK OF CALIFORNIA, N.A., as
collateral agent for the Secured Parties defined therein (in such capacity, and together with its
successors and permitted assigns, the “Collateral Agent”). Terms defined in the Securities
Purchase Agreement and not otherwise defined herein are used herein as therein defined.

 R E C I T A L S

     The Company, Holdings and the Required Holders have agreed to amend the Securities Purchase
Agreement in accordance with, and pursuant to the terms and conditions set forth in, this
Amendment, and TFD LITERARY ACQUISITIONS, LLC, a Delaware limited liability company (“TFD
Acquisitions”), has agreed to consent and make various other agreements with respect to such
amendments.

     In consideration of the mutual agreements herein contained and other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto
agree as follows:

     Section 1. Amendment to Section 1.1 of the Securities Purchase Agreement.

     (a) The following definition hereby is inserted in Section 1.1 of the Securities Purchase
Agreement in the proper alphanumerical order:

     “ ‘UBOC’ means Union Bank of California, N.A.”

     (b) The following definitions appearing in Section 1.1 of the Securities Purchase Agreement
hereby are amended and restated in their entirety as follows:

     “ ‘Collection Bank’ means UBOC or any other depositary bank acceptable to the
Credit Agreement Administrative Agent (or if all obligations under the Credit Agreement have
been paid in full and all commitments thereunder terminated, the Collateral Agent) in its
reasonable credit judgment.”

     “ ‘Credit Agreement’ means the Credit Agreement dated as of June 27, 2007 among
the Company, the lenders and letter of credit issuers party thereto and UBOC, as
administrative agent and collateral agent thereunder, as the same may be amended, restated,
supplemented, replaced, refunded or refinanced in whole or in part from time to time (and
whether or not with the original agents and lenders or other agents and lenders).”

     “ ‘Film Budget’ means an ordinary and customary film production budget that has
been approved by an Approved Completion Guarantor and sets forth the actual direct costs of

1

 

production including (a) Company producer fees not to exceed the lesser of (i) 2.5% of
the budget and (ii) $875,000, (b) third party producer fees not to exceed the lesser of (i)
2.5% of the budget and (ii) $875,000; provided, that the budget may include third
party producer fees in excess of such percentage thereof so long as any such excess fees are
funded solely with the proceeds of the Notes and the Equity Investment, (c) an overhead
allocation not to exceed the lesser of (i) 7.5% of the budget and (ii) $2,625,000 (which
fees and overhead allocation are otherwise consistent with the then effective Operating
Budget), (d) any contingency required by the Approved Completion Guarantor and (e) an amount
not to exceed an estimated 16 months of interest expense in respect of Indebtedness the
proceeds of which are utilized to fund the costs of production, together with costs
associated with completion bonds and reduced by the amount of all subsidies and production
related benefits expected to be received by the Company.”

     Section 2. Amendment to Section 7.11(b) of the Securities Purchase Agreement. Section 7.11(b)
of the Securities Purchase Agreement hereby is amended and restated in its entirety as follows:

     “(b) All funds maintained in the Collection Account shall be governed by the Collection
Account Agreement (if a Collection Account Agreement is required by the terms of the Credit
Agreement) and shall be invested solely in Cash Equivalents. If (i) a Collection Account
Agreement is not required by the terms of the Credit Agreement and (ii) the Collection Bank
is not also the Credit Agreement Administrative Agent, the provisions of the preceding
clause (a)(iv) shall govern the Collection Account.”

     Section 3. Amendment to Section 8.16 of the Securities Purchase Agreement. Section 8.16 of
the Securities Purchase Agreement hereby is amended and restated in its entirety as follows:

     “Section 8.16. Film Related Restrictive Covenants. No Group Member shall do
any of the following:

     (a) In connection with the production of the first and second Films (which Films shall
be Qualifying Films) of the Group Members after the Closing Date, utilize more than
$22,500,000 in the aggregate from the proceeds of the Equity Investment and the issuance and
sale of the Notes (calculated after applying the aggregate reimbursements of such proceeds
pursuant to the Loans made with respect to such Films under the Credit Agreement; provided,
however, that the last applicable reimbursement for the purposes hereof shall be made from
the initial Loan on the second Film under the Credit Agreement) to fund the aggregate
development and production of such Films; or

     (b) In connection with the production of the third and fourth Films (which Films shall
be Qualifying Films) of the Group Members after the Closing Date, utilize more than
$11,250,000 from the proceeds of the Equity Investment and the issuance and sale of the
Notes to fund the aggregate development and production of any such Films (such amount
calculated without giving effect to any reimbursements pursuant to Loans made under the
Credit Agreement or third party advances); or

     (c) Greenlight any Film with a Film Budget of greater than $45,000,000.”

     Section 4. Amendment to Section 11.11(a) of the Securities Purchase Agreement. Subclause
(i)(B) of Section 11.11(a) of the Securities Purchase Agreement hereby is amended and restated in
its entirety as follows:

2

 

     “...(B) if to the Collateral Agent, to Union Bank of California, N.A., Entertainment Finance
Group, 1901 Avenue of the Stars, Suite 600, Los Angeles, CA 90067, Attention: Alex Cho, Tel:
310.551.8963, Fax: 310.551.8980, with a copy to Akin Gump Strauss Hauer & Feld LLP, 2029
Century Park East, Suite 2400, Los Angeles, CA 90067, Attention: P. John Burke, Esq., Tel:
310.229.1038, Fax: 310.229.1001...”

     Section 5. Amendment to Section 11.19 of the Securities Purchase Agreement. Section 11.19 of
the Securities Purchase Agreement hereby is hereby amended and restated in its entirety as follows:

     “Section 11.19 Use of Name.

     Each of Holdings and the Company agrees, and shall cause each other Note Party to
agree, that it shall not, and none of its Affiliates shall, issue any press release or other
public disclosure (other than any document filed with any Governmental Authority relating to
a public offering of the Securities of any Note Party or disclosures set forth in its
Financial Statements) using the name, logo or otherwise referring to GE Capital and/or UBOC
and/or of any of its respective Affiliates, the Note Documents or any transaction
contemplated therein to which the Secured Parties are party without at least two Business
Days’ prior notice to GE Capital and/or UBOC (as applicable) and without the prior consent
of GE Capital and/or UBOC (as applicable) except to the extent required to do so under
applicable Requirements of Law and then, only after consulting with GE Capital and/or UBOC
(as applicable) prior thereto. For the avoidance of doubt, the parties hereto hereby agree
that (i) in no event shall any of Holdings, the Company or any other Note Party be required
to notify: (a) GE Capital prior to the issuance of any such press release or other public
disclosure using the name, logo, or otherwise referring to UBOC and/or any of its
Affiliates, or (b) UBOC prior to the issuance of any such press release or other public
disclosure using the name, logo or otherwise referring to GE or any of its Affiliates; and
(ii) in no event shall there be a requirement that any press release or other public
disclosure issued by Holdings, the Company, or any other Note Party mention both of GE
Capital and UBOC.”

     Section 6. Restatement of Schedule II to the Securities Purchase Agreement. Schedule II to
the Securities Purchase Agreement hereby is amended and restated in its entirety in the form
attached hereto as Amended and Restated Schedule II.

     Section 7. Consent of Holdings and TFD Acquisition. Each of Holdings and TFD Acquisitions
hereby acknowledges and consents to this Amendment, and affirms and acknowledges that the Guaranty
and Security Agreement and each other Note Document executed and delivered by it remains in full
force and effect and that it remains obligated thereunder without defense, offset or counterclaim
of any kind whatsoever, as if each such Note Document were executed and delivered to Collateral
Agent and the Purchasers (or their assigns) on the date hereof.

     Section 8. Representations and Warranties. To induce the Required Holders to enter into this
Amendment, the Company, Holdings and TFD Acquisitions represent and warrant to the Required Holders
that:

     (a) Representations and Warranties in Note Documents. Each of the
representations and warranties of the Company, Holdings and TFD Acquisitions contained in
the Note Documents to which each is a party (i) were true and correct in all material
respects when made and (ii) after giving effect to this Amendment, continue to be true and
correct in all material

3

 

respects on the date hereof (except to the extent that such representations and
warranties relate expressly to an earlier date).

     (b) Authority. The execution and delivery by each of the Company, Holdings and TFD
Acquisitions of this Amendment and each other document to be executed by such Person in
accordance with the terms hereof and the performance by the Company, Holdings and TFD
Acquisitions of their respective obligations under the Securities Purchase Agreement as
amended hereby (i) are within such Person’s power and authority, (ii) have been duly
authorized by all necessary proceedings, (iii) do not (A) contravene the Constituent
Documents of either Person, (B) violate any applicable Requirements of Law, (C) conflict
with, contravene, constitute a default or breach under, or result in or permit the
termination or acceleration of, any material Contractual Obligation of such Person or any of
its Subsidiaries (including other Related Documents or Note Documents) other than those that
would not, in the aggregate, have a Material Adverse Effect or (D) result in the imposition
of any Lien (other than a Permitted Lien) upon any property of any such Person or any of
such Person’s respective Subsidiaries and (iv) do not require any Permit of, or filing with,
any Governmental Authority or any consent of, or notice to, any such Person.

     (c) Enforceability. Each Note Document (including the Securities Purchase
Agreement, as amended hereby) constitutes a legal, valid and binding obligation of the
Company, Holdings and TFD Acquisitions, as the case may be, enforceable against such Person
in accordance with its terms.

     (d) No Default. After giving effect to this Amendment, no Default or Event of
Default exists.

     Section 9. Conditions to Effectiveness. This Amendment shall become effective on the date
when the following conditions precedent have been satisfied (such date, the “Effective
Date”):

     (a) The Company, Holdings, TFD Acquisitions, the Required Holders and the Collateral
Agent shall have executed and delivered this Amendment.

     (b) The Required Holders shall have received a certified copy of an amendment to the
Credit Agreement providing consents and amendments substantially similar to those provided
herein.

     (c) The representations and warranties set forth in Section 8 hereof shall be true and
correct on the date hereof and on the Effective Date.

     (d) No injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the consummation of the transactions contemplated herein shall have
been issued and remain in force by any Governmental Authority against the Company, Holdings,
TFD Acquisitions or any Holder.

     (e) The Company shall have paid all reasonable out-of-pocket costs and expenses of the
Holders, to the extent invoices therefor have been presented.

     Section 10. Ratification and Incorporation of Securities Purchase Agreement; No Novation. The
Company, Holdings and TFD Acquisitions expressly acknowledge and agree with each of the following:

4

 

     (a) except as expressly modified under this Amendment, (i) each of Company, Holdings
and TFD Acquisitions hereby acknowledges, confirms, and ratifies all of the terms and
conditions set forth in, and all of its obligations under (including all Liens granted
pursuant to), the Securities Purchase Agreement and the other Note Documents to which it is
a party and (ii) all of the terms and conditions set forth in the Securities Purchase
Agreement and the other Note Documents are incorporated herein by this reference as if set
forth in full herein; and

     (b) except as expressly modified under this Amendment, the execution, delivery, and
effectiveness of this Amendment shall not (i) limit, impair, constitute a waiver of, or
otherwise affect any right, power, or remedy of any Secured Party under the Securities
Purchase Agreement or any other Note Document, (ii) constitute a waiver of any provision in
the Securities Purchase Agreement or in any of the other Note Documents, or (iii) alter,
modify, amend, or in any way affect any of the terms, conditions, obligations, covenants, or
agreements contained in the Securities Purchase Agreement, all of which are ratified and
affirmed in all respects and shall continue in full force and effect.

     Section 11. Reference to and Effect on Securities Purchase Agreement.

     (a) Upon the effectiveness of this Amendment, each reference in the Securities Purchase
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import, and each
reference in the other Note Documents to the Securities Purchase Agreement, shall mean and
be a reference to the Securities Purchase Agreement as amended hereby.

     (b) This Amendment shall be a Note Document for all purposes.

     Section 12. Benefits of Amendment. The terms and provisions of this Amendment shall be
binding upon and inure to the benefit of the parties to the Securities Purchase Agreement and the
other parties hereto and their respective successors and assigns to the extent contemplated by the
Note Documents.

     Section 13. Interpretation. The Section headings used in this Amendment are for convenience
of reference only and shall not affect the construction hereof.

     Section 14. Execution in Counterparts. This Amendment may be executed in any number of
counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one and the same
Amendment. Delivery of an executed counterpart of a signature page hereto by facsimile or other
electronic transmission shall be equally effective as delivery of a manually executed counterpart
of this Amendment.

     Section 15. Severability. If any provision of this Amendment shall be held to be invalid,
illegal or unenforceable under applicable law in any jurisdiction, such provision shall be
ineffective only to the extent of such invalidity, illegality or unenforceability, which shall not
affect any other provisions hereof or the validity, legality and enforceability of such provision
in any other jurisdiction.

     Section 16. Governing Law. This Amendment and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with, the law of the State
of New York.

     Section 17. Entire Agreement. This Amendment together with all other instruments, agreements,
and certificates executed by the parties in connection herewith or with reference thereto,

5

 

embody the entire understanding and agreement between the parties hereto and thereto with
respect to the subject matter hereof and thereof and supercede all prior agreements,
understandings, and inducements, whether express or implied, oral or written.

[signature pages follow]

6

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
as of the date first set forth above.

	 	 	 	 	 
	 	THE FILM DEPARTMENT LLC
	 
	 	By:  	THE FILM DEPARTMENT HOLDINGS LLC,
 	 
	 	its sole Member	 
	 	 	 	 
	 
	 	By:  	/s/ Neil Sacker
 	 
	 	 	Neil Sacker, President & Chief Operating Officer 	 
	 	 	 	 
	 
	 	THE FILM DEPARTMENT HOLDINGS LLC

 	 
	 	By:  	/s/ Neil Sacker	 
	 	 	Neil Sacker, President & Chief Operating Officer 	 
	 
	 
	 	TFD LITERARY ACQUISITIONS, LLC 	 
	 
	 	 	 
	 	By:  	                                              THE FILM DEPARTMENT HOLDINGS LLC,
 	 
	 	its sole Member	 
	 
	 	 	 
	 	By:  	/s/ Neil Sacker	 
	 	 	Neil Sacker, President & Chief Operating Officer 	 
	 	 	 	 
	 

SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT

THE FILM DEPARTMENT LLC

 

	 	 	 	 	 
	 	ETON PARK CLO MANAGEMENT 1

By: Eton Park Asset Management, L.L.C, as Collateral

Manager, as a Holder	 
	 
	 	 	 
	 	By:  	/s/
Terrence Aquino 	 
	 	 	Name:  	Terrence Aquino 	 
	 	 	Its:  Controller	 
	 
	 
	 	ETON PARK CLO MANAGEMENT 2

By: Eton Park Asset Management, L.L.C., as Collateral

Manager, as a Holder	 
	 
	 	 	 
	 	By:  	/s/
Terrence Aquino
 	 
	 	 	Name:  	Terrence Aquino 	 
	 	 	Its:  Controller	 
	 
	 
	 	ETON PARK MASTER FUND, LTD.

By: Eton Park Capital Management, L.P., its investment

manager, as a Holder	 
	 
	 	 	 
	 	By:  	/s/
Terrence Aquino
 	 
	 	 	Name:  	Terrence Aquino 	 
	 	 	Its:  Controller	 
	 
	 
	 	ETON PARK FUND, L.P.

By: Eton Park Capital Management, L.P., its

investment manager, as a Holder	 
	 
	 	 	 
	 	By:  	/s/
Terrence Aquino
 	 
	 	 	Name:  	Terrence Aquino 	 
	 	 	Its:  Controller	 
	 

SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT

THE FILM DEPARTMENT LLC

 

	 	 	 	 	 
	 	UNION BANK OF CALIFORNIA, N.A.,

as Collateral Agent

 	 
	 	By:  	/s/ Alex cho	 
	 	 	Name:  	Alex Cho 	 
	 	 	Its:       Duly Authorized Signatory 	 
	 

SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT

THE FILM DEPARTMENT LLC

 

AMENDED AND RESTATED

SCHEDULE II

COLLECTION ACCOUNT PAYMENT WATERFALL

     (a) Subject to paragraphs (b), (c) and (d) below, on each Settlement Date (as defined in the
Credit Agreement), the Credit Agreement Administrative Agent shall (if the Credit Agreement
Administrative Agent has approved the Borrower Settlement Statement delivered by the Company) : (i)
if the Collection Bank is also the Credit Agreement Administrative Agent, apply all collected and
available funds on deposit in the Collection Account (including any investment earnings received
with respect to such funds) in the following order of priority and in accordance with the Borrower
Settlement Statement; or (ii) if the Collection Bank is not also the Credit Agreement
Administrative Agent, instruct the Collection Bank in writing to apply all collected and available
funds on deposit in the Collection Account (including any investment earnings received with respect
to such funds) in the following order of priority and in accordance with the Borrower Settlement
Statement and the Collection Account Agreement:

     (i) first, to the extent not deducted directly out of revenues prior to
deposit into the Collection Account or otherwise paid, to the P&R Reserve Account for
payment by the Company to third parties (that are not Affiliates) of participations and
residuals;

     (ii) second, ratably, (A) to the account of the Credit Agreement
Administrative Agent designated in accordance with Section 2.13(a) of the Credit
Agreement, for payment by the Credit Agreement Administrative Agent of (I) the annual
Agency Fee under the Fee Letter and (II) any other fees or expenses of the Credit Agreement
Administrative Agent or the Credit Agreement Collateral Agent for which the Company is
responsible (other than the unused commitment fee), and (B) to the account designated by
the Collateral Agent from time to time, for payment in respect of expenses of the
Collateral Agent, in each case to the extent due and payable;

     (iii) third, to the account of the Credit Agreement Administrative Agent
designated in accordance with Section 2.13(a) of the Credit Agreement, for payment
by the Credit Agreement Administrative Agent of (A) interest and any unused commitment fee
and (B) any letter of credit fees and related issuance expenses to the L/C Issuer;

     (iv) fourth, to the extent the aggregate amount of funds on deposit in the
applicable Borrower Liquidity Reserve Account is less than the applicable Threshold Amount,
to such Borrower Liquidity Reserve Account in the amount of such deficiency;

     (v) fifth, if not otherwise prohibited from being paid or received in
accordance with the Intercreditor Agreement and the Company has not elected to defer the
payment of cash interest on the Notes in accordance with the terms thereof, to the
Company’s operating account for payment of interest in cash on the Notes;

     (vi) sixth, to the Company’s operating account, for distributions to be made
by the Company to Holdings for payment by Holdings to the holders of its Stock to enable
such holders to pay their respective tax obligations with respect to taxable income
allocated to them from Holdings and its Subsidiaries in accordance with Section
8.5(c)(i);

     (vii) seventh, to the account of the Credit Agreement Administrative Agent
designated in accordance with Section 2.13(a) of the Credit Agreement, for payment
by the Credit Agreement Administrative Agent of principal on all revolving loans then
outstanding under the Credit Agreement;

10

 

     (viii) eighth, to the account of the Credit Agreement Administrative Agent
designated in accordance with Section 2.13(a) of the Credit Agreement, for payment
by the Credit Agreement Administrative Agent of any other obligations or liabilities then
due and payable under the Credit Agreement; and

     (ix) ninth, to the Company’s operating account for use by the Company in
accordance with the provisions of the Agreement and the Operating Budget.

     (b) Subject to paragraphs (c) and (d) below, if, on any Settlement Date, any Approved
Completion Guarantor (i) has advanced amounts under the completion guaranty issued by it with
respect to a Qualifying Film (any such Qualifying Film, a “Designated Film”) and (ii) has
not been reimbursed in full for all amounts advanced by it and all other amounts payable pursuant
thereto, then, notwithstanding the order of priority set forth in paragraph (a) above, at such time
as the aggregate principal amount of loans made under the Credit Agreement in respect of the
Designated Film (together with all interest thereon and fees and costs incurred in connection
therewith to the extent permitted by the applicable Completion Guaranty) have been repaid in full,
and the Company has retained or recouped any sums permitted by such Completion Guaranty to be
retained or recouped out of such aggregate sums before recoupment by such Approved Completion
Guarantor, all subsequent sums derived from such Designated Film and deposited into the Collection
Account shall be applied (A) first to the Company’s operating account for payment by the Company to
such Approved Completion Guarantor until such Approved Completion Guarantor shall have been
reimbursed in full and (B) second, as provided in paragraph (a) above.

     (c) If the Collection Bank is also the Credit Agreement Administrative Agent, then, if an
“event of default” has occurred and is continuing under the Credit Agreement Documents, the Credit
Agreement Administrative Agent shall apply all funds maintained in the Collection Account to the
payment of the obligations and other liabilities of the Company in accordance with the terms of
Section 2.12 of the Credit Agreement. If the Collection Bank is not also the Credit
Agreement Administrative Agent, then if the Credit Agreement Administrative Agent (i) notifies the
Collection Bank that an “event of default” has occurred and is continuing under the Credit
Agreement Documents and (ii) so instructs the Collection Bank in its notification thereto (with a
copy to the Company), the Collection Bank shall remit all funds maintained in the Collection
Account, to the account of the Credit Agreement Administrative Agent designated in accordance with
Section 2.13(a) of the Credit Agreement for application by the Credit Agreement
Administrative Agent to the payment of the obligations and other liabilities of the Company in
accordance with the terms of Section 2.12 of the Credit Agreement.

     (d) If the Collection Bank is also the Credit Agreement Administrative Agent, then, if (i) all
revolving credit commitments under the Credit Agreement have been terminated and the obligations
and liabilities of the Company thereunder have been paid in full in cash and (ii) the Collateral
Agent (A) notifies the Credit Agreement Administrative Agent that an Event of Default has occurred
and is continuing and (B) so instructs the Credit Agreement Administrative Agent in its
notification thereto, the Credit Agreement Administrative Agent shall remit all funds maintained in
the Collection Account to the account designated by the Collateral Agent in its notice to the
Credit Agreement Administrative Agent for payment by the Collateral Agent to the Holders of the
Notes. If the Collection Bank is not also the Credit Agreement Administrative Agent, then, if (i)
the Credit Agreement Administrative Agent notifies the Collection Bank that all revolving credit
commitments under the Credit Agreement have been terminated and the obligations and liabilities of
the Company thereunder have been paid in full in cash and (ii) the Collateral Agent (A) notifies
the Collection Bank that an Event of Default has occurred and is continuing and (B) so instructs
the Collection Bank in its notification thereto, the Collection Bank shall remit all funds
maintained in the Collection Account to the account designated by the Collateral Agent in its
notice to the Collection Bank for payment by the Collateral Agent to the Holders of the Notes.

11

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