Document:

exv10w37

Exhibit 10.37

No. ____

THIS WARRANT MAY NOT BE EXERCISED PRIOR TO ___, 2010 AND MAY NOT BE SOLD, TRANSFERRED OR
ASSIGNED PRIOR TO THAT DATE EXCEPT TO AN OFFICER OR PARTNER OF THE HOLDER. THIS WARRANT WILL
EXPIRE AND BE VOID AFTER ___, 2015.

Warrant To Purchase Up To 160,000 Shares

of

THE FILM DEPARTMENT HOLDINGS, INC.

(A Delaware Corporation)

     THIS CERTIFIES THAT, in consideration of that certain Investment Advisory Services letter
agreement dated March 30, 2010, the Film Department Holdings, Inc. (the “Company”) grants to Girard
Securities, Inc. (the “Holder”) as registered owner of this Warrant the right to purchase at any
time or from time to time at or after ___, 2010 (which,
for the avoidance of doubt, is the date six (6) months following the
effective date of the registration statement relating to the
Company’s initial public offering) and at or before 5:00 p.m., Eastern Time,
___, 2015 (the “Termination Date”), but not thereafter, 160,000 shares of common stock, ___
par value (“Common Stock”) of the Company. This Warrant is exercisable at $___ per share so
purchased (the “Exercise Price”), upon presentation and surrender of this Warrant and upon payment
of the Exercise Price for such of the Common Stock at the principal office of the Company;
provided, however, that upon the occurrence of any of the events specified in the Statement of
Rights of Warrant, a copy or which is attached as Annex I hereto and by this reference made a part
hereof, the rights granted by this Warrant, including the number of shares of Common Stock to be
received upon such exercise, shall be adjusted as therein specified. If the Termination Date is a
day on which banking institutions are authorized by law to close, then this Warrant may be
exercised in accordance with the terms herein on the next succeeding day which is not such a day on
which banking institutions are authorized by law to close. During the period ending on the
Termination Date, the Company agrees not to take any action that would terminate the Warrant.

     This Warrant may be exercised, in whole or in part, at any time and from time to time during
the Exercise Period. Such exercise shall be accomplished by tender to the Company of the purchase
price set forth above as the warrant price (the “Warrant Price”), either (a) in cash, by wire
transfer or by certified check or bank cashier’s check, payable to the order of the Company, or (b)
by surrendering all or a portion of the of the Warrant using the amount by which the Fair Market
Value, as defined, exceeds the Warrant Price to purchase a number of shares of Common Stock without
the payment of any cash as illustrated in the formula provided below (a “Cashless Exercise”),
together with presentation and surrender to the Company of this Warrant with an executed form of
election and instructions for registration in substantially the form attached hereto as Exhibit A.
Upon receipt of the foregoing, the Company will deliver to the Holder, as promptly as possible but
in no event more than three business days, a certificate or certificates representing the shares of
Common Stock so purchased, registered in the name of the Holder or its transferee. With respect to
any exercise of this Warrant, the Holder will for all purposes be deemed to have become the holder
of record of the number of shares of Common Stock purchased hereunder on the date this Warrant and
payment of the Warrant Price is received by the Company (the “Exercise Date”), irrespective of the
date of delivery of the certificate evidencing such shares, except that, if the date of such
receipt is a date on which the stock transfer books of the Company are closed, such person will be
deemed to have become the holder of such shares at the close of business on the next succeeding
date on which the stock transfer books are open. Fractional shares of Common Stock will not be
issued upon the exercise of this Warrant. In lieu of any fractional shares that would have been
issued but for the immediately preceding sentence, the Holder will be entitled to receive cash
equal to the current Fair Market Value of such fraction of a share of Common Stock on the trading
day immediately preceding the Exercise Date. In the event this Warrant is exercised in part, the
Company shall issue a new Warrant to the Holder covering the aggregate number of shares of Common
Stock for which this Warrant remains exercisable.

 

 

If the Holder elects to conduct a Cashless Exercise, the Company
shall cause to be delivered to the Holder a certificate or certificates representing the
number of shares of Common Stock computed using the following formula:

	 	 	 	 
	X = Y

	*
	(A-B)	 
	 

	 	 	 
	 

	 	A	 
	Where:
	 	 	 
	
	
	
	

	 

	 	X =
	the number of shares of Common Stock to be issued to the Holder;
	
	
	
	

	 

	 	Y =
	the portion of the Warrant (in number of shares of Common
Stock) being exercised by the Holder (at the date of such
calculation);
	
	
	
	

	 

	 	A =
	the Fair Market Value of one share of Common Stock on the
Exercise Date (as calculated below); and
	
	
	
	

	 

	 	B =
	the Warrant Price.

For purposes of the foregoing calculation, “Fair Market Value of one share of Common Stock on the
Exercise Date” shall mean: (i) if the principal trading market for such securities is a national
securities exchange, the Nasdaq Stock Market or the Over-the-Counter Bulletin Board (“OTCBB”), the
closing or last sale price on such exchange or market (during regular hours) on the last trading
day immediately prior to such Exercise Date; or (ii) if (i) is not applicable, and if bid and ask
prices for shares of Common Stock are reported by the National Quotation Bureau (“NQB”), the
average of the high bid and low ask prices so reported on the last trading day immediately prior to
such Exercise Date. Notwithstanding the foregoing, if there is no reported closing price, last
sales price, or bid and ask prices, as the case may be, for the period in question, then the Fair
Market Value shall be determined in good faith by, and reflected in a formal resolution of the
Board of Directors of the Company.

     Upon exercise of this Warrant, the form of election attached hereto as Exhibit A must be duly
executed and the instructions for registration of the Common Stock acquired by such exercise must
be completed. If the subscription rights represented hereby shall not be exercised at or before
5:00 p.m., Eastern Time, on the Termination Date, then, from and after such date and time, this
Warrant shall become and be void without further force or effect, and all rights represented hereby
shall cease and expire.

     The registered Holder of this Warrant, by its acceptance hereof, agrees that it will not sell,
transfer or assign or hypothecate this Warrant prior to
___, 2010 (which,
for the avoidance of doubt, is the date six (6) months following the
effective date of the registration statement relating to the
Company’s initial public offering) to anyone other than an
officer or partner of such Holder. Subsequent to that date, this Warrant may be assigned by the
Holder in whole or in part by execution by the Holder of the form of assignment, a copy of which is
attached hereto as Exhibit B, to certain persons, including dealers or their officers or partners,
In the event of any assignment made as aforesaid, the Company, upon request and surrender of this
Warrant by the Holder at the principal office of the Company accompanied by payment of all transfer
taxes, if any, payable in connection therewith, shall transfer this Warrant on the books of the
Company and shall execute and deliver a new Warrant or Warrants of like tenor to the appropriate
assignee expressly evidencing the right to purchase the aggregate number of Common Stock
purchasable hereunder or such portion of such aggregate number as shall be contemplated by any such
agreement.

     Notwithstanding anything herein to the contrary, each certificate for securities purchased
under this Warrant shall bear a legend as follows:

“THE SHARES REPRESENTED BY THIS STOCK CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE FEDERAL
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH LAWS AS MAY BE APPLICABLE OR AN OPINION OF
COUNSEL

2

 

REASONABLY SATISFACTORY TO THE CORPORATION THAT AN EXEMPTION FROM SUCH APPLICABLE LAWS
EXISTS.”

     The Holder agrees for itself and all subsequent owners, that before any disposition is made of
any securities purchased pursuant to the Warrant, the owner shall give written notice to the
Company describing briefly the manner of any such proposed disposition. The securities shall not be
transferred unless and until (i) the Company has received the opinion of counsel for such owners
that the securities may be sold pursuant to an exemption from registration under the Securities Act
of 1933 (the “Act”), or (ii) a Registration Statement relating to such securities has been filed by
the Company and declared effective by the Securities and Exchange Commission (the “Commission”).

     Subject to the above, this Warrant may be exercised or assigned in whole or in part. In the
event of the exercise or assignment hereof in part only, upon surrender of this Warrant for
cancellation, together with the duly executed exercise or assignment and funds sufficient, to pay
any transfer tax, the Company shall cause to be delivered to the Holder without charge a new
Warrant of like tenor to this Warrant in the name of the Holder evidencing the right of the Holder
to purchase the number of Common Stock purchasable hereunder as to which this Warrant has not been
exercised or assigned.

     Upon receipt of the Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant and execution of a customary affidavit of loss and indemnity agreement,
the Company shall execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute
an additional contractual obligation on the part of the Company.

     The Company, upon request of the then Holder(s) of a majority of the outstanding Warrant or
shares of Common Stock issuable upon exercise of the Warrant, agrees to register expeditiously, on
one occasion, the Common Stock underlying the Warrants and will file on such occasion a
registration statement on Form S-3 (subject to the Company’s eligibility to use such form) covering
such Common Stock underlying the Warrants. Such request must be made at any time during a period of
four and one-half years beginning six months from the effective date of the Company’s initial
public offering filed with the Securities and Exchange Commission on Form S-1, file number
333-163514. In connection with the request, the Company shall bear all expenses, one time only,
attendant to registering the securities and shall immediately after the receipt of the registration
request, give a notice to the other holders of Warrants who shall have 20 days to elect to include
their shares of Common Stock in such registration. In addition, for a period of four and one-half
years beginning six months after the date of the Warrant, the holders of the Warrants shall have
the right to include such securities as part of any other registration of securities, other than on
Forms S-4, S-8 or other inappropriate form, filed by the Company; provided, that if in the
opinion of the managing underwriter in connection with any such offering the aggregate number of
shares to be sold in such offering exceeds the maximum number which may be distributed without
adversely affecting the price, timing or distribution of the shares being distributed, then each
holder of Warrants shall be entitled to include in such registration not more than its pro rata
portion of such maximum number of shares. The Company shall bear all expenses attendant to such
registrations, and agrees to give the holders thereof not less than 30 days’ written notice
thereof, including any terms or conditions, prior to the filing of any such registration statement
with the Commission. The Company agrees to use its best efforts to promptly file and cause the
filing required herein to become effective to register the Common Stock underlying the Warrants and
to use its best efforts to keep the registration statement current and accurate for a period of 180
days (12 months on Form S-3).

     In each instance in which registration of the Common Stock underlying the Warrant is required,
the Company shall:

     (1) Supply to the Holders intending to make a public distribution of their Common
Stock, one executed copy of each registration statement and a reasonable number of copies of
the preliminary, final and other prospectus in conformity with requirements of the Act and
the Rules and Regulations promulgated thereunder and such other documents as the Holders
shall reasonably request.

3

 

     (2) Indemnify and hold harmless each such Holder and each underwriter, within the
meaning of the Act, who may purchase from or sell for any such Holder, any Common Stock,
from and against any and all losses, claims, damages, and liabilities (including, but not
limited to, any and all expenses whatsoever reasonably incurred in investigation, preparing,
defending or settling any claim) arising from (i) any untrue or alleged untrue statement of
material fact contained in any such registration statement or any prospectus contained
therein or delivered thereunder, or from (ii) any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading,
unless each untrue statement or omission or such alleged untrue statement or omission was
based upon information furnished or required to be furnished in writing to the Company by
such Holders expressly for use therein, or the alleged liability arises from a violation by
any Holders and/or any underwriter of the securities laws of any state relating to
registration of securities or brokers or dealers, which indemnification shall include each
person, if any, who controls any such Holders or underwriter within the meaning of the Act;
provided, however, that the Company shall not be so obligated to indemnify any such Holders
or controlling person unless such Holders shall at the same time indemnify the Company, its
directors, each officer signing any registration statement and each person, if any, who
controls the Company within the meaning of the Act, from and against any and all losses,
claims, damages and liabilities (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigation, preparing, defending or settling any claim)
arising from (a) any untrue or alleged untrue statement of a material fact contained in any
registration statement or prospectus contained therein or (b) any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but the indemnity of such Holders or controlling
person shall be limited to liability based upon information furnished in writing to the
Company by such Holders or controlling person expressly for use therein or relating the
registration of securities or brokers or dealers in any state.

     The Company will also cooperate with the Holder(s) of the or Warrants issued upon the exercise
of the Warrants in preparing and signing any registration statement or notification, in addition to
the registration rights hereinabove provided, required in order to sell or transfer the Common
Stock underlying this Warrant and will supply all information required therefor; but such
additional registration or notification shall be at the Holder(s) cost and expense. The Company’s
agreements with respect to registration of the securities will continue in effect regardless of the
exercise or surrender of this Warrant.

     In no event shall this Warrant (or the securities issuable upon full or partial exercise
hereof) be offered or sold except in conformity with the Act.

     This Warrant shall be governed by, and construed in accordance with, the laws of the State of
California, without regard to its conflicts of laws principles or rules.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as of this            day
of      , 2010.

	 	 	 	 	 
	 	THE FILM DEPARTMENT HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Mark Gill, Chief Executive Officer 	 
	 	 	 	 

4

 

	 	 	 	 	 

ANNEX I

THE FILM DEPARTMENT HOLDINGS, INC.

STATEMENT OF RIGHTS OF WARRANTS

     (a) In the event, prior to the expiration of the Warrant to which this Statement of Rights
is attached by exercise or by its terms, the Company shall issue any of its Common Stock as a share
dividend or shall subdivide the number of outstanding Common Stock into a greater number of shares,
then, in either of such events, the then applicable Exercise Price per share purchasable pursuant
to this Warrant in effect at the time of such action shall be reduced proportionately and the
number of shares of Common Stock at that time purchasable pursuant to this Warrant shall be
increased proportionately; and, conversely, in the event that the Company shall reduce the number
of outstanding shares of Common Stock by combining such shares into a smaller number of shares,
then, in such event, the then applicable Exercise Price per share purchasable pursuant to this
Warrant in effect at the time of such action shall be increased proportionately and the number of
shares of Common Stock at that time purchasable pursuant to this Warrant proportionately shall be
decreased. Any dividend paid or distributed upon the Common Stock in shares of any other class of
the Company or securities convertible into Common Stock shall be treated as a dividend paid in
Common Stock to the extent that the shares of Common Stock are issuable upon the conversion
thereof.

     (b) In the event, prior to the expiration of this Warrant by exercise or by its terms, the
Company shall be recapitalized by reclassifying its outstanding Common Stock (other than into
shares with a different par value, or by changing its outstanding Common Stock to shares without
par value), or in the event the Company or a successor corporation shall consolidate or merge with
or convey all or substantially all of its, or of any successor corporation’s, property and assets
to any other corporation or corporations (any such other corporation being included within the
meaning of the term “successor corporation” hereinbefore used in the context of any consolidation
or merger of any other corporation with, or the sale of all or substantially all of the property of
any such other corporation to, another corporation or corporations), or in the event of any other
material change in the capital structure of the Company or of any successor corporation by reason
of any reclassification, reorganization, recapitalization, consolidation, merger, conveyance or
otherwise, then, as a condition of any such reclassification, reorganization, recapitalization,
consolidation, merger or conveyance, a prompt, proportionate, equitable, lawful and adequate
provision shall be made whereby the Holder of this Warrant shall thereafter have the right to
purchase, upon the basis and the terms and conditions specified in this Warrant, in lieu of the
securities of the Company theretofore purchasable upon the exercise of this Warrant, such shares,
securities or assets as may be issued or payable with respect to or in exchange for the number of
securities of the Company theretofore purchasable upon the exercise of this Warrant had such
reclassification, reorganization, recapitalization, consolidation, merger or conveyance not taken
place; and in any such event, the rights of the Holder of this Warrant to any adjustment in the
number of Common Stock purchasable upon exercise of this Warrant, as provided herein, shall
continue and be preserved in respect of any shares, securities or assets which the Holder becomes
entitled to purchase. Notwithstanding anything herein to the contrary, the provisions of this
paragraph (b) shall not apply to a merger with a subsidiary provided the Company is the continuing
corporation and provided further such merger does not result in any reclassification, capital
reorganization or other change of the securities issuable under this Warrant. The foregoing
provisions of this paragraph (b) shall apply to successive reclassifications, capital
reorganizations and changes of securities and to successive consolidation, mergers, sales or
conveyances.

     (c) In the event the Company, at any time while this Warrant shall remain unexpired and
unexercised, shall sell all or substantially all of its property, or dissolves, liquidates, or
winds up its affairs, prompt, proportionate, equitable, lawful and adequate provision shall be made
as part of the terms of any such sale, dissolution, liquidation, or winding up such that the Holder
of this Warrant may thereafter receive, upon exercise hereof, in lieu of the securities of the
Company which it would have been entitled to receive, the same kind and amount of any shares,
securities or assets as may be issuable, distributable or payable upon any such sale, dissolution,
liquidation or winding up with respect to each Common Share of the Company; provided, however, that
in the event of any such sale, dissolution, liquidation or winding up, the right to exercise this
Warrant shall terminate on a date fixed by the Company, such date so fixed to be not earlier than
5:00 p.m., Eastern Time, on the 45th day next succeeding the date

5

 

on which notice of such termination of the right to exercise this Warrant has been given by mail to
the Holder of this Warrant at such Holder’s address as it appears on the books of the Company.

     (d) Upon any exercise of this Warrant by the Holder, the Company shall not be required to
deliver fractions of any securities; but prompt, proportionate, equitable, lawful and adequate
adjustment in the Exercise Price payable by the Holder shall be made in respect of any such
fraction of any securities on the basis of the Exercise Price then applicable upon the exercise of
this Warrant.

     (e) In the event, prior to the expiration of this Warrant by exercise or by its terms, the
Company shall determine to take a record of its securities holders for the purpose of determining
securities holders entitled to receive any share dividend, distribution or other right which will
cause any change or adjustment in the number, amount, price or nature of the Common Stock or other
shares, securities or assets deliverable upon the exercise of this Warrant pursuant to the
foregoing provisions, the Company shall specify the date as of which such record is to be taken;
the purpose for which such record is to be taken; and the number, amount, price and nature of the
shares of Common Stock or other securities or assets which will be deliverable upon exercise of
this Warrant after the action for which such record will be taken has been consummated.

     (f) The Company may deem and treat the registered Holder of this Warrant at any time as the
absolute owner hereof for all purposes, and the Company shall not be affected by any notice to the
contrary.

     (g) Whenever the Exercise Price shall be adjusted as required by the provisions of paragraph
(a) hereof, the Company shall forthwith file in the custody of its Secretary or Assistant Secretary
at its principal office, and with its stock transfer agent, if any, an officer’s certificate
showing the adjusted Exercise Price determined as herein provided and setting forth in reasonable
detail the facts requiring such adjustment. Each such officer’s certificate shall be made available
at all reasonable times for inspection by the Holder and the Company shall, forthwith after each
such adjustment, deliver a copy of such certificate to the Holder. Such certificate shall be
conclusive as to the correctness of such adjustment.

     (h) This Warrant shall not entitle the Holder hereof to any of the rights of shareholders or
to any dividend declared upon the Common Stock unless the Holder shall have exercised this Warrant
prior to the record date fixed by the Board of Directors of the Company for the determination of
holders of Common Stock entitled to such dividend or other right.

6

 

EXHIBIT A

FORM TO BE USED TO EXERCISE WARRANT:

The Film Department Holdings, Inc.

8439 Sunset Blvd., 2nd Floor

West Hollywood, California 90069

Date:               , 20

     The Undersigned hereby elects irrevocably to exercise the attached Warrant dated
        , 2010 and to purchase            shares of The Film Department Holdings, Inc. called for
thereby, and hereby makes payment of $         (at the rate of $         per share) in
payment of the Exercise Price pursuant thereto or the surrender herewith of the Warrant to purchase         shares in consideration of the Cashless Exercise Price pursuant thereto, as the case may
be. Please issue the shares as to which this Warrant is exercised in accordance with the
instructions given below.

	 	 	 	 	 
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	

	 	 	 
	 	Signature	 
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	

	 	 	 
	 	Signature Guaranteed (Medallion)	 
	 	 	 
	 	 	 
	 	 	 
	 

INSTRUCTIONS FOR REGISTRATION OF COMMON STOCK

	 	 	 	 
	Name	 	 	 
	 	 	(Print in Block Letters)	 
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	

	Address	 	 	 
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	

	FEIN #	 	 	 

7

 

	 	 	 	 	 

EXHIBIT B

FORM TO BE USED TO ASSIGN WARRANT:

ASSIGNMENT

     (To be executed by the registered Holder to effect a transfer of the within Warrant:)

     FOR VALUE RECEIVED,              does hereby sell, assign and transfer unto
             the right to purchase            shares of The Film Department Holdings,
Inc. evidenced by that certain Warrant dated      , 2010 and does hereby irrevocably
constitute and appoint            attorney to transfer such right on the books of such
Company with full power of substitution in the premises.

Dated:             , 20    .

	 	 	 	 	 
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	

	 	 	 
	 	Signature	 
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	

	 	 	 
	 	Signature Guaranteed (Medallion)	 
	 	 	 
	 	 	 
	 	 	 
	 

     NOTICE: The signature to the form to exercise or form to assign must correspond with the name
as written upon the face of the Warrant in every particular without alteration or enlargement or
any change whatsoever, and must be medallion guaranteed by a bank, other than a savings bank, or by
a trust company or by a firm having membership on a registered national securities exchange.

8exv10w39

Exhibit 10.39

EXECUTION COPY

 

SECURITIES PURCHASE AGREEMENT

$30,000,000
PRINCIPAL AMOUNT

OF

SECURED SECOND LIEN NOTES DUE 2014

AND

WARRANTS TO PURCHASE CLASS C UNITS

Dated as of June 27, 2007

among

THE FILM DEPARTMENT LLC,

as the Company

THE FILM DEPARTMENT HOLDINGS LLC,

as one of the Guarantors

THE PURCHASERS NAMED HEREIN

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Collateral Agent

 ̈  ̈
 ̈

GE
CAPITAL MARKETS, INC.,
 as Sole Placement Agent

 

 

 

TABLE
OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE I DEFINITIONS,
INTERPRETATION AND ACCOUNTING TERMS	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 1.1	 	Defined Terms	 	 	1	 
	 
	 	Section 1.2	 	UCC Terms	 	 	18	 
	 
	 	Section 1.3	 	Accounting Terms and Principles	 	 	18	 
	 
	 	Section 1.4	 	Interpretation	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II THE ISSUANCE AND SALE OF
THE NOTES AND WARRANTS	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 2.1	 	Description of Notes	 	 	19	 
	 
	 	Section 2.2	 	Warrant to Acquire Class C Units of Holdings	 	 	19	 
	 
	 	Section 2.3	 	Original Issue Discount	 	 	19	 
	 
	 	Section 2.4	 	Legends	 	 	19	 
	 
	 	Section 2.5	 	Mandatory Repayment of the Notes	 	 	21	 
	 
	 	Section 2.6	 	Optional Prepayments	 	 	21	 
	 
	 	Section 2.7	 	Allocation of Prepayments	 	 	22	 
	 
	 	Section 2.8	 	Notice of Prepayment of the Notes	 	 	22	 
	 
	 	Section 2.9	 	Method of Payment on the Notes	 	 	22	 
	 
	 	Section 2.10	 	Certain Tax Matters	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III CONDITIONS TO THE PURCHASERS’ OBLIGATIONS	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 3.1	 	Closing	 	 	23	 
	 
	 	Section 3.2	 	Conditions to the Purchasers’ Obligations	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE NOTE PARTIES	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 4.1	 	Corporate Existence; Compliance with Law	 	 	25	 
	 
	 	Section 4.2	 	Note and Related Documents	 	 	26	 
	 
	 	Section 4.3	 	Ownership of Group Members	 	 	27	 
	 
	 	Section 4.4	 	Financial Statements	 	 	27	 
	 
	 	Section 4.5	 	Material Adverse Effect	 	 	27	 
	 
	 	Section 4.6	 	Solvency	 	 	28	 
	 
	 	Section 4.7	 	Litigation	 	 	28	 
	 
	 	Section 4.8	 	Taxes	 	 	28	 
	 
	 	Section 4.9	 	Margin Regulations	 	 	28	 
	 
	 	Section 4.10	 	No Burdensome Obligations; No Defaults	 	 	28	 
	 
	 	Section 4.11	 	Investment Company Act	 	 	28	 
	 
	 	Section 4.12	 	Labor Matters	 	 	28	 
	 
	 	Section 4.13	 	ERISA	 	 	29	 
	 
	 	Section 4.14	 	Environmental Matters	 	 	29	 
	 
	 	Section 4.15	 	Intellectual Property	 	 	29	 
	 
	 	Section 4.16	 	Title; Real Property	 	 	30	 
	 
	 	Section 4.17	 	Full Disclosure	 	 	30	 
	 
	 	Section 4.18	 	Eligibility Requirements	 	 	30	 
	 
	 	Section 4.19	 	Private Offering	 	 	30	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE V RESERVED	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI REPORTING COVENANTS	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 6.1	 	Financial Statements	 	 	31	 
	 
	 	Section 6.2	 	Other Events	 	 	33	 
	 
	 	Section 6.3	 	Copies of Notices and Reports	 	 	33	 
	 
	 	Section 6.4	 	Taxes	 	 	33	 
	 
	 	Section 6.5	 	Labor Matters	 	 	34	 
	 
	 	Section 6.6	 	ERISA Matters	 	 	34	 
	 
	 	Section 6.7	 	Environmental Matters	 	 	34	 
	 
	 	Section 6.8	 	Rule 144A Information Delivery Obligations	 	 	34	 
	 
	 	Section 6.9	 	Other Information	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII AFFIRMATIVE COVENANTS	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 7.1	 	Maintenance of Corporate Existence	 	 	35	 
	 
	 	Section 7.2	 	Compliance with Laws, Etc	 	 	35	 
	 
	 	Section 7.3	 	Payment of Obligations	 	 	35	 
	 
	 	Section 7.4	 	Maintenance of Property	 	 	35	 
	 
	 	Section 7.5	 	Maintenance of Insurance	 	 	35	 
	 
	 	Section 7.6	 	Keeping of Books	 	 	36	 
	 
	 	Section 7.7	 	Access to Books and Property	 	 	36	 
	 
	 	Section 7.8	 	Environmental	 	 	36	 
	 
	 	Section 7.9	 	Use of Proceeds	 	 	36	 
	 
	 	Section 7.10	 	Additional Collateral and Guaranties	 	 	37	 
	 
	 	Section 7.11	 	Deposit Accounts; Securities Accounts, Collection Accounts and Cash Collateral Accounts	 	 	 	 
	 
	 	 	 	 	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII NEGATIVE COVENANTS	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 8.1	 	Indebtedness	 	 	38	 
	 
	 	Section 8.2	 	Liens	 	 	39	 
	 
	 	Section 8.3	 	Investments	 	 	41	 
	 
	 	Section 8.4	 	Asset Sales	 	 	41	 
	 
	 	Section 8.5	 	Restricted Payments	 	 	42	 
	 
	 	Section 8.6	 	Prepayment of Indebtedness	 	 	43	 
	 
	 	Section 8.7	 	Fundamental Changes	 	 	43	 
	 
	 	Section 8.8	 	Change in Nature of Business	 	 	43	 
	 
	 	Section 8.9	 	Transactions with Affiliates	 	 	44	 
	 
	 	Section 8.10	 	Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted Payments	 	 	44	 
	 
	 	Section 8.11	 	Modification of Certain Documents	 	 	44	 
	 
	 	Section 8.12	 	Accounting Changes; Fiscal Year	 	 	45	 
	 
	 	Section 8.13	 	Margin Regulations	 	 	45	 
	 
	 	Section 8.14	 	Compliance with ERISA	 	 	45	 
	 
	 	Section 8.15	 	Hazardous Materials	 	 	45	 
	 
	 	Section 8.16	 	Film Related Restrictive Covenants	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX EVENTS OF DEFAULT	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 9.1	 	Definition	 	 	45	 
	 
	 	Section 9.2	 	Remedies	 	 	47	 
	 
	 	Section 9.3	 	Quiet Enjoyment	 	 	47	 

ii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE X THE COLLATERAL AGENT	 	 	48	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 10.1	 	Appointment and Duties	 	 	48	 
	 
	 	Section 10.2	 	Binding Effect	 	 	49	 
	 
	 	Section 10.3	 	Use of Discretion	 	 	49	 
	 
	 	Section 10.4	 	Delegation of Rights and Duties	 	 	49	 
	 
	 	Section 10.5	 	Reliance and Liability	 	 	49	 
	 
	 	Section 10.6	 	Acting Individually	 	 	50	 
	 
	 	Section 10.7	 	Credit Decisions	 	 	50	 
	 
	 	Section 10.8	 	Expenses; Indemnities	 	 	51	 
	 
	 	Section 10.9	 	Resignation of Collateral Agent	 	 	51	 
	 
	 	Section 10.10	 	Release of Collateral or Guarantors	 	 	52	 
	 
	 	Section 10.11	 	Additional Secured Parties	 	 	52	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 	53	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 11.1	 	Amendments, Waivers, Etc	 	 	53	 
	 
	 	Section 11.2	 	Registration and Transfer of Notes	 	 	54	 
	 
	 	Section 11.3	 	Costs and Expenses	 	 	55	 
	 
	 	Section 11.4	 	Indemnities	 	 	56	 
	 
	 	Section 11.5	 	Survival	 	 	57	 
	 
	 	Section 11.6	 	Limitation of Liability for Certain Damages	 	 	57	 
	 
	 	Section 11.7	 	Lender-Creditor Relationship	 	 	57	 
	 
	 	Section 11.8	 	Right of Setoff	 	 	57	 
	 
	 	Section 11.9	 	Sharing of Payments, Etc	 	 	57	 
	 
	 	Section 11.10	 	Marshaling; Payments Set Aside	 	 	58	 
	 
	 	Section 11.11	 	Notices	 	 	58	 
	 
	 	Section 11.12	 	Electronic Transmissions	 	 	59	 
	 
	 	Section 11.13	 	Governing Law	 	 	60	 
	 
	 	Section 11.14	 	Jurisdiction	 	 	60	 
	 
	 	Section 11.15	 	Waiver of Jury Trial	 	 	60	 
	 
	 	Section 11.16	 	Severability	 	 	60	 
	 
	 	Section 11.17	 	Execution in Counterparts	 	 	60	 
	 
	 	Section 11.18	 	Entire Agreement	 	 	61	 
	 
	 	Section 11.19	 	Use of Name	 	 	61	 
	 
	 	Section 11.20	 	Non-Public Information; Confidentiality	 	 	61	 
	 
	 	Section 11.21	 	Patriot Act Notice	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XII REPRESENTATIONS OF THE PURCHASERS	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 12.1	 	No Registration	 	 	62	 
	 
	 	Section 12.2	 	Accredited Investor and Other Investment MattersError! Bookmark not defined.	 	 	 	 
	 
	 	Section 12.3	 	Authorization, etc.	 	 	63	 
	 
	 	Section 12.4	 	ERISA Matters	 	 	63	 

iii

 

SCHEDULES

	 	 	 	 	 

	Schedule I

	 	—
	 	Purchaser Information
	Schedule II

	 	—
	 	Collection Account Payment Waterfall
	Schedule III

	 	—
	 	Initial Operating Budget
	Schedule 4.2

	 	—
	 	Consents
	Schedule 4.3

	 	—
	 	Ownership of Holdings, the Company and Subsidiaries
	Schedule 8.9

	 	—
	 	Transactions with Affiliates
	Schedule 12.2

	 	—
	 	Risk Factors

EXHIBITS

	 	 	 	 	 

	Exhibit A

	 	—
	 	Form of Note
	Exhibit B

	 	—
	 	Form of Warrant
	Exhibit C

	 	 	 	Form of Notation of Guaranty
	Exhibit D

	 	—
	 	Form of Compliance Certificate
	Exhibit E

	 	—
	 	Form of Guaranty and Security Agreement
	Exhibit F

	 	—
	 	Form of Intercreditor Agreement
	Exhibit G

	 	—
	 	Form of Notice of Assignment and Distributor’s Acceptance
	Exhibit H

	 	—
	 	Form of Accredited Investor Letter

iv

 

     This
SECURITIES PURCHASE AGREEMENT, dated as of June 27, 2007, is entered into 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 (as defined below)and GENERAL ELECTRIC CAPITAL CORPORATION (“GE Capital”), as
collateral agent for the Secured Parties (as defined below) (in such capacity, and together with
its successors and permitted assigns, the “Collateral Agent”).

     The parties hereto agree as follows:

ARTICLE I

DEFINITIONS,
INTERPRETATION AND ACCOUNTING TERMS

     Section 1.1 Defined Terms. As used in this Agreement, the following terms have the
following meanings:

     “Accredited Investor” has the meaning specified in Section 4.19.

     “Affiliate” means, with respect to any Person, each officer, director, general partner
or joint-venturer of such Person and any other Person that directly or indirectly controls, is
controlled by, or is under common control with, such Person; provided, however,
that no Secured Party shall be an Affiliate of the Company. For purpose of this definition,
“control” means the possession of either (a) the power to vote, or the beneficial ownership
of, 10% or more of the Voting Stock of such Person or (b) the power to
direct or cause the direction of the management and policies of such Person, whether by contract or
otherwise.

     “Agreement” means this Securities Purchase Agreement.

     “Amended and Restated Holdings LLC Agreement” means that certain Amended and Restated
Limited Liability Company Agreement of The Film Department Holdings LLC to become effective as of
the Closing Date, and as the same may be subsequently amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and as permitted by this Agreement.

     “Applicable Default Interest Rate” has the meaning set forth in the Notes.

     “Applicable Interest Rate” has the meaning set forth in the Notes.

     “Applicable Tax Rate” means, with respect to each Fiscal Year, the sum of the actual
marginal tax rates applicable to the respective taxpayers under the United States federal income
tax laws and applicable state and local income tax laws for such years, taking into account the
deductibility of state and local taxes on the corresponding taxpayer’s federal tax return.

     “Approved Completion Guarantor” means any of the Fireman’s Fund Insurance Company,
Film Finances, Inc., cineFinance (on behalf of Houston Casualty Company) or another
completion guarantor 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 sole discretion.

1

 

     “Benefit Plan” means any employee benefit plan as defined in Section 3(3) of ERISA
(whether governed by the laws of the United States or otherwise) to which any Group Member
incurs or otherwise has any obligation or liability, contingent or otherwise.

     “Borrower Liquidity Reserve Accounts” means, collectively, the Interest Reserve
Account and the Overhead Reserve Account.

     “Borrower Settlement Statement” means a statement to be delivered by the Company to
the Credit Agreement Administrative Agent in respect of the administration of the Collection
Account.

     “Borrowing Availability” has the meaning specified in the Credit Agreement (as in
effect on the date hereof).

     “Business Day” means any day of the year that is not a Saturday, Sunday or a day on
which banks are required or authorized to close in New York City.

     “Capital Lease” means, with respect to any Person, any lease of, or other arrangement
conveying the right to use, any property (whether real, personal or mixed) by such Person as lessee
that has been or should be accounted for as a capital lease on a balance sheet of such Person
prepared in accordance with GAAP.

     “Capitalized Lease Obligations” means, at any time, with respect to any Capital Lease,
any lease entered into as part of any Sale and Leaseback Transaction of any Person or any synthetic
lease, the amount of all obligations of such Person that is (or that would be, if such synthetic
lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such
Person prepared in accordance with GAAP.

     “Cash Collateral Account” means a deposit account or securities account in the name
of the Company and under the sole control (as defined in the applicable UCC) of the Collateral Agent and
the Credit Agreement Collateral Agent.

     “Cash Equivalents” means (a) any readily-marketable securities (i) issued by, or
directly, unconditionally and fully guaranteed or insured by the United States federal government
or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the
full faith and credit of the United States federal government, (b) any readily-marketable direct
obligations issued by any other agency of the United States federal government, any state of the
United States or any political subdivision of any such state or any public instrumentality thereof,
in each case having a rating of at least “A-1” from S&P or at least “P-1” from Moody’s, ( c) any
commercial paper rated at least “A-1” by S&P or “P-1” by Moody’s and issued by any
Person organized under the laws of any state of the United States, (d) any Dollar-denominated time
deposit, insured certificate of deposit, overnight bank deposit or bankers’ acceptance issued or
accepted by (i) any lender party to the Credit Agreement or (ii) any commercial bank that is (A)
organized under the laws of the United States, any state thereof or the District of Columbia, (B)
“adequately capitalized” (as defined in the regulations of its primary federal banking regulators)
and (C) has Tier 1 capital (as defined in such regulations) in excess of $250,000,000 and (e)
shares of any United States money market fund that (i) has substantially all of its assets invested
continuously in the types of investments referred to in clause (a), (b),
(c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in
excess of $500,000,000 and (iii) has obtained from either S&P or Moody’s the highest rating
obtainable for money market funds in the United States; provided, however, that the
maturities of all obligations specified in any of clauses (a), (b), (c) and
(d) above shall not exceed 365 days.

2

 

     “CERCLA” means the United States Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. §§ 9601 et seq.).

     “Change of Control” means the occurrence of any of the following: (a) any “person”
or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Investors,
becomes (i) the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 50.1%, or more, of the Voting Stock of Holdings having the right to vote for the
election of members of the board of directors of Holdings or (ii) entitled to appoint three or more
members of the board of directors of Holdings, (b) a Change of Management or (c) Holdings shall
cease to own and control legally and beneficially all of the economic and voting rights associated
with ownership of all outstanding Voting Stock of all classes of Voting Stock of the Company.

     “Change of Management” means either of the Management Members fails to hold the office
of Holdings and the Company that such Management Member holds on the Closing Date or any such
Management Member shall fail to devote all of their professional time to the operations of Holdings
and the Company and, in each case, a replacement for such Management Member reasonably acceptable
to the Administrative Agent shall not have been retained for a period, and on terms, reasonably
satisfactory to the Administrative Agent within 90 days of the occurrence of either such event
(such period, the “Replacement Period”); provided, however, that a
“Change of Management” shall occur immediately without giving effect to any Replacement
Period if both Management Members (or the replacements thereof approved in accordance with the
preceding clause) fail to hold the office of Holdings and the Company that such Management Members
(or the approved replacements thereof) holds on the Closing Date and/or such Management Members
(or the approved replacements thereof) shall fail to devote all of their professional time to the
operations of Holdings and the Company.

     “Closing Date” has the meaning specified in Section 3.1(b).

     “Code” means the U.S. Internal Revenue Code of 1986.

     “Collateral” means all property and interests in property and proceeds thereof now
owned or hereafter acquired by any Note Party in or upon which a Lien is granted or purported to be
granted pursuant to any Note Document.

     “Collection Account” means a Cash Collateral Account maintained with a Collection Bank
and designated as ‘The Film Department Collection Account’.

     “Collection Account Agreement” means an agreement, in form and substance satisfactory
to the Collateral Agent, among the Company, the Collateral Agent, the Credit Agreement
Administrative Agent, the Credit Agreement Collateral Agent, the Collection Bank and the other
parties thereto pursuant to which amounts on deposit in the Collection Account are administered and
allocated to satisfy the payment obligations of the Company in accordance with the payment
waterfall set forth on Schedule II hereto.

     “Collection Bank” means any 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.

     “Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds and tax refunds).

     “Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

3

 

     “Consolidated” means, with respect to any Person, the accounts of such Person and
its Subsidiaries consolidated in accordance with GAAP.

     “Consolidated Net Worth” means the value of the following calculated in conformity
with GAAP: total assets (including all cash and Cash Equivalents and all amounts in the
Borrower Liquidity Reserve Accounts) plus the funded principal amount of the Notes, less
total liabilities (exclusive of the funded principal amount of the Notes) and all
capitalized closing fees and expenses (if any) attributable to the initial closing
contemplated hereby and the Related Transactions.

     “Constituent Documents” means, with respect to any Person, collectively and, in each
case, together with any modification of any term thereof, (a) the articles of incorporation,
certificate of incorporation, constitution or certificate of formation of such Person, (b) the
bylaws, operating agreement, limited liability company agreement or joint venture agreement of such
Person, (c) any other constitutive, organizational or governing document of such Person, whether or
not equivalent, and (d) any other document setting forth the manner of election or duties of the
directors, officers or managing members of such Person or the designation, amount or relative
rights, limitations and preferences of any Stock of such Person.

     “Contractual Obligation” means, with respect to any Person, any provision of any
Security issued by such Person or of any document or undertaking (other than a Note Document) to
which such Person is a party or by which it or any of its property is bound or to which any of its
property is subject.

     “Control Agreement” means, with respect to any deposit account, any securities
account, commodity account, securities entitlement or commodity contract, an agreement, in form and
substance satisfactory to the Collateral Agent, among the Collateral Agent, the Credit Agreement
Collateral Agent, the financial institution or other Person at which such account is maintained or
with which such entitlement or contract is carried and the Note Party maintaining such account,
effective to grant “control” (as defined under the applicable UCC) over such account to the Collateral Agent.

     “Controlled Deposit Account” means each deposit account (including all funds on
deposit therein) that is the subject of an effective Control Agreement and that is maintained by
any Note Party.

     “Controlled Securities Account” means each securities account or commodity account
(including all financial assets held therein and all certificates and instruments, if any,
representing or evidencing such financial assets) that is the subject of an effective Control
Agreement and that is maintained by any Note Party.

     “Copyrights” means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to copyrights and all mask work,
database and design rights, whether or not registered or published, all registrations and
recordations thereof and all applications in connection therewith.

     “Corporate Chart” means a document in form reasonably 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) setting forth, as of a date
set forth therein, for each Person that is a Note Party, that is subject to Section 7.10 or
that is a Subsidiary or joint venture of any of them, (a) the full legal name of such Person, (b)
the jurisdiction of organization and any organizational number and tax identification number of
such Person, (c) the location of such Person’s chief executive office (or, if applicable, sole
place of business) and (d) the number of shares of each class of Stock of such Person authorized,
the number outstanding and the number and percentage of such

4

 

outstanding shares for each such class owned, directly or indirectly, by any Note Party or any
Subsidiary of any of them.

     “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 General Electric Capital
Corporation, 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).

     “Credit Agreement Administrative Agent” means the Person designated as the
“administrative agent” for the lenders party to and other secured parties identified in the Credit
Agreement, together with its successors and assigns. On the Closing Date, the “Credit Agreement
Administrative Agent” is General Electric Capital Corporation.

     “Credit Agreement Collateral Agent” means the Person designated as the “collateral
agent” for the lenders party to and other secured parties identified in the Credit Agreement,
together with its successors and assigns. On the Closing Date, the “Credit Agreement Collateral
Agent” is General Electric Capital Corporation.

     “Credit Agreement Documents” means, collectively, the Credit Agreement and any other
document related to the foregoing.

     “Default” means any event that, with the passing of time or the giving of notice or both, would
become an Event of Default.

     “Disclosure Documents” means, collectively, (a) all confidential information memoranda
and related materials prepared in connection with the syndication of (i) the revolving credit
facility established pursuant to the Credit Agreement and (ii) the Notes and Warrants and (b) all
other documents filed by any Group Member with the United States Securities and Exchange Commission.

     “Dollars” and the sign “$ each mean the lawful money of the United States
of America.

     “Domestic Person” means any “United States person” under and as defined in Section
7701(a)(30) of the Code.

     “Domestic Territory” means the United States of America or any political
subdivision thereof.

     “E-Fax” means any system used to receive or transmit faxes electronically.

     “Electronic Transmission” means each document, instruction, authorization, file,
information and any other communication transmitted, posted or otherwise made or communicated
by e-mail or E-Fax, or otherwise to or from an E-System or other equivalent service.

     “Eligible Purchasers” has the meaning specified in Section 4.19.

     “Environmental Laws” means all Requirements of Law and Permits imposing liability or
standards of conduct for or relating to the regulation and protection of human health, safety, the
environment and natural resources, including CERCLA, the SWDA, the Hazardous Materials
Transportation Act (49 U.S.C. §§ 5101 et seq.), the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C. §§ 136 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the
Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et
seq.), the

5

 

Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), the Safe Drinking Water Act (42
U.S.C. §§ 300(f) et seq.), all regulations promulgated under any of the foregoing, all analogous
Requirements of Law and Permits and any environmental transfer of ownership notification or
approval statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann. §§ 13:1K-6 et seq.).

     “Environmental Liabilities” means all Liabilities (including costs of Remedial
Actions, natural resource damages and costs and expenses of investigation and feasibility
studies) that may be imposed on, incurred by or asserted against any Group Member as a
result of, or related to, any-claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute or common law or otherwise, arising under any Environmental Law
or in connection with any environmental, health or safety condition or with any Release and
resulting from the ownership, lease, sublease or other operation or occupation of property
by any Group Member, whether on, prior or after the date hereof.

     “Equity Investment” means the cash equity contribution from certain investors
disclosed to the Collateral Agent and the Purchasers to Holdings (and further contributed by Holdings to the
Company) in Dollars in an aggregate amount of not less than $25,000,000.

     “Equity Investment Documents” means each document executed in connection with the
Equity Investment.

     “ERISA” means the United States Employee Retirement Income Security Act of 1974.

     “ERISA Affiliate” means, collectively, any Group Member, and any Person under common
control, or treated as a single employer, with any Group Member, within the meaning of Section
414(b), (c), (m) or (o) of the Code.

     “ERISA Event” means any of the following: (a) a reportable event described in Section
4043(b) of ERISA (or, unless the 30-day notice requirement has been duly waived under the
applicable regulations, Section 4043(c) of ERISA) with respect to a Title IV Plan, (b) the
withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer, as defined in Section 4001 (a)(2) of ERISA, (c) the complete or partial
withdrawal of any ERISA Affiliate from any Multiemployer Plan, (d) with respect to any
Multiemployer Plan, the filing of a notice of reorganization, insolvency or termination (or
treatment of a plan amendment as termination) under Section 4041A of ERISA, (e) the filing of a notice of intent to terminate a
Title IV Plan (or treatment of a plan amendment as termination) under Section 4041 of ERISA, (f) the
institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC, (g) the
failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due, (h)
the imposition of a
lien under Section 412 of the Code or Section 302 or 4068 of ERISA on any property (or rights to
property, whether real or personal) of any ERISA Affiliate, (i) the failure of a Benefit Plan or any trust
thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other
Requirements of Law to qualify thereunder and (j) any other event or condition that might
reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of
a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any
liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC premiums due but not
delinquent.

     “E-Signature” means the process of attaching to or logically associating with an
Electronic Transmission an electronic symbol, encryption, digital signature or process (including the name or
an abbreviation of the name of the party transmitting the Electronic Transmission) with the intent
to sign, authenticate or accept such Electronic Transmission.

6

 

     “E-System” means any electronic system, including Intralinks® and any other Internet or
extranet-based site, whether such electronic system is owned, operated or hosted by the
Collateral Agent, any of its Related Persons or any other Person, providing for access to data
protected by passcodes or other security system.

     “Event of Default” has the meaning specified in Section 9.1.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.

     “Executive Services Agreements” means each of (a) the Executive Services Agreement
dated as of June 25, 2007, between Holdings and Mr. Neil Sacker and (b) the Executive Services
Agreement dated as of June 25, 2007, between Holdings and Mr. Mark Gill.

     “Exempt Resales” has the meaning specified in Section 4.19.

     “Federal Reserve Board” means the Board of Governors of the United States Federal
Reserve System and any successor thereto.

     “Film” means a theatrical motion picture.

     “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 production including
(a) Company producer fees not to exceed 2.5% of the budget, (b) third party producer fees not to
exceed 2.5% of the budget; 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 7.5% of
the budget (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.

     “Financial Statement” means each financial statement delivered pursuant to
Section 4.4 or 6.1.

     “Fiscal Quarter” means each three fiscal month period ending on March 31, June 30,
September 30 or December 31.

     “Fiscal Year” means the twelve month period ending on December 31.

     “GAAP” means generally accepted accounting principles in the United States of America,
as in effect from time to time, set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants, in the statements and
pronouncements of the Financial Accounting Standards Board and in such other statements by such
other entity as may be in general use by significant segments of the accounting profession that are
applicable to the circumstances as of the date of determination. Subject to Section 1.3,
all references to “GAAP” shall be to GAAP applied consistently with the principles used in
the preparation of the Financial Statements described in Section 4.4.

     “Governmental Authority” means any nation, sovereign or government, any state or other
political subdivision thereof, any agency, authority or instrumentality thereof and any entity or
authority exercising executive, legislative, taxing, judicial, regulatory or administrative
functions of or pertaining to

7

 

government, including any central bank, stock exchange, regulatory body, arbitrator, public sector
entity, supra-national entity (including the European Union and the
European Central Bank) and any
self-regulatory organization (including the National Association of Insurance Commissioners).

     “Group Members” means, collectively, the Company, its Subsidiaries and Holdings.

     “Group Members’ Accountants” means any nationally-recognized independent registered
certified public accountants or any other independent certified public accounting firm otherwise
acceptable to the Required Holders.

     “Guarantor” means Holdings, each Wholly Owned Subsidiary of the Company and each
other Person that enters into any Guaranty Obligation with respect to any Obligation of any
Note Party.

     “Guaranty and Security Agreement” means a guaranty and security agreement, in
substantially the form of Exhibit E, among the Collateral Agent, the Company and other Guarantors
from time to time party thereto.

     “Guaranty Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of such Person for any Indebtedness, lease, dividend or other
obligation (the “primary obligation”) of another Person (the “primary obligor”), if
the purpose or intent of such Person in incurring such liability, or the economic effect thereof,
is to guarantee such primary obligation or provide support, assurance or comfort to the holder of
such primary obligation or to protect or indemnify such holder against loss with respect to such
primary obligation, including (a) the direct or indirect guaranty, endorsement (other than for
collection or deposit in the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of any primary obligation, (b) the incurrence of reimbursement
obligations with respect to any letter of credit or bank guaranty in support of any primary
obligation, (c) the existence of any Lien, or any right, contingent or otherwise, to receive a
Lien, on the property of such Person securing any part of any primary obligation and (d) any
liability of such Person for a primary obligation through any Contractual Obligation (contingent or
otherwise) or other arrangement (i) to purchase, repurchase or otherwise acquire such primary
obligation or any security therefor or to provide funds for the payment or discharge of such
primary obligation (whether in the form of a loan, advance, stock purchase, capital contribution or
otherwise), (ii) to maintain the solvency, working capital, equity capital or any balance sheet
item, level of income or cash flow, liquidity or financial condition of any primary obligor, (iii)
to make take-or-pay or similar payments, if required, regardless of non-performance by any other
party to any Contractual Obligation, (iv) to purchase, sell or lease (as lessor or lessee) any
property, or to purchase or sell services, primarily for the purpose of enabling the primary
obligor to satisfy such primary obligation or to protect the holder of such primary obligation
against loss or (v) to supply funds to or in any other manner invest in, such primary obligor
(including to pay for property or services irrespective of  whether such property is received or such
 services are rendered); provided, however, that “Guaranty Obligations”
shall not include (x) endorsements for collection or deposit in the ordinary course of business and
(y) product warranties given in the ordinary course of business. The outstanding amount of any
Guaranty Obligation shall equal the outstanding amount of the primary obligation so guaranteed or
otherwise supported or, if lower, the stated maximum amount for which such Person may be liable
under such Guaranty Obligation.

     “Guild Subordination Agreement” means a subordination agreement, in form and substance
satisfactory to the Collateral Agent, from each applicable guild in respect of any Liens granted to
such guild on any Collateral.

     “Hazardous Material” means any substance, material or waste that is classified,
regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant
or a pollutant

8

 

or by other words of similar meaning or regulatory effect, including petroleum or any fraction
thereof, asbestos, polychlorinated biphenyls and radioactive substances.

     “Hedging Agreement” means any interest rate swap agreements, interest rate cap
agreements, interest rate collar agreements, interest rate insurance, foreign exchange, swap,
option or forward contract, spot, cap, floor or collar transaction, any other derivative instrument
and any other similar speculative transaction and any other similar agreement or arrangement
designed to alter the risks of any Person arising from fluctuations in any underlying variable.

     “Holder” means any Purchaser or any other Person in whose name a Note or Notes are
registered on the register described in Section 11.2.

     “Indebtedness” of any Person means, without duplication, any of the following, whether
or not matured: (a) all indebtedness for borrowed money, (b) all obligations evidenced by notes,
bonds, debentures or similar instruments, (c) all reimbursement and all obligations with respect to
(i) letters of credit, bank guarantees or bankers’ acceptances or (ii) surety, customs, reclamation
or performance bonds (in each case not related to judgments or litigation) other than those entered into in the
ordinary course of business, (d) all obligations to pay the deferred purchase price of property or
services, other than trade payables incurred in the ordinary course of business, (e) all
obligations created or arising under any conditional sale or other title retention agreement, regardless of whether the rights and remedies
of the seller or lender under such agreement in the event of default are limited to repossession or
sale of such property, (f) all Capitalized Lease Obligations, (g) all obligations, whether or not
contingent, to purchase, redeem, retire, defease or otherwise acquire for value any of its own
Stock or Stock Equivalents (or any Stock or Stock Equivalent of a direct or indirect parent entity thereof) prior to the date
that is 180 days after the Scheduled Maturity Date, valued at, in the case of redeemable preferred
Stock, the greater of the voluntary liquidation preference and the involuntary liquidation
preference of such Stock plus accrued and unpaid dividends, (h) all payments that would be required
to be made in respect of any Hedging Agreement in the event of a termination (including an early termination) on the date of
determination and (i) all Guaranty Obligations for obligations of any other Person constituting
Indebtedness of such other Person; provided, however, that the items in each of
clauses (a) through (i) above shall constitute “Indebtedness” of such Person solely
to the extent, directly or indirectly, (x) such Person is liable for any part of any such item, (y)
any such item is secured by a Lien on such Person’s property or (z) any other Person has a right,
contingent or otherwise, to cause such Person to become liable for any part of any such item or to
grant such a Lien.

     “Indemnified Matter” has the meaning specified in Section 11.4.

     “Indemnitee” has the meaning specified in Section 11.4.

     “Initial Operating Budget” means the five-year operating plan and budget of Holdings and
the Company prepared in accordance with customary accounting practices in the film industry
delivered to the Purchasers on or prior to the date hereof and attached hereto as
Schedule III.

     “Initial Projections” means those financial projections, dated June 6,2007,
covering the Fiscal Years ending in 2007 through 2012 and delivered to the Purchasers by
the Company prior to the date hereof.

     “Intellectual Property” means all rights, title and interests in or relating to
intellectual property arising under any Requirement of Law and all IP Ancillary Rights relating
thereto, including all Copyrights, Trademarks, Internet Domain Names and IP Licenses.

9

 

     “Intellectual Property Security Agreement” means each copyright or trademark security
agreement, in the form attached to the Guaranty and Security Agreement, executed by a Note Party
for the benefit of the Secured Parties.

     “Intercreditor Agreement” means an intercreditor agreement, in substantially the form
of Exhibit F, among the Collateral Agent, the Credit Agreement Collateral Agent, the Company and
each Guarantor.

     “Interest Reserve Account” means a Cash Collateral Account designated as the ‘The
Film Department Interest Reserve Account’ .

     “Internet Domain Names” means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to Internet domain names.

     “Investment” means, with respect to any Person, directly or indirectly, (a) to own,
purchase or otherwise acquire, in each case whether beneficially or otherwise, any
investment in, including any interest in, any Security of any other Person (other than any
evidence of any Obligation), (b) to purchase or otherwise acquire, whether in one
transaction or in a series of transactions, all or a significant part of the property of
any other Person or a business conducted by any other Person or all or substantially all of
the assets constituting the business of a division, branch, brand or other unit operation
of any other Person, (c) to incur, or to remain liable under, any Guaranty Obligation for
Indebtedness of any other Person, to assume the Indebtedness of any other Person or to
make, hold, purchase or otherwise acquire, in each case directly or indirectly, any
deposit, loan, advance, commitment to lend or advance, or other extension of credit
(including by deferring or extending the date of, in each case outside the ordinary course
of business, the payment of the purchase price for Sales of property or services to any
other Person, to the extent such payment obligation constitutes Indebtedness of such other
Person), excluding deposits with financial institutions available for withdrawal on demand,
prepaid expenses, accounts receivable and similar items created in the ordinary course of
business, (d) to make, directly or indirectly, any contribution to the capital of any other
Person or (e) to Sell any property for less than fair market value (including a disposition
of cash or Cash Equivalents in exchange for consideration of lesser value); provided,
however, that such Investment shall be valued at the difference between the value of the
consideration for such Sale and the fair market value of the property Sold.

     “IP Ancillary Rights” means, with respect to any other Intellectual Property, as
applicable, all foreign counterparts to, and all divisionals, reversions, continuations,
continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual
Property and all income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the
foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or
recover at law or in equity for any past, present or future infringement, misappropriation,
dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other
IP Ancillary Right.

     “IP License” means all Contractual Obligations (and all related IP Ancillary Rights),
whether written or oral, granting any right, title and interest in or relating to any Intellectual
Property.

     “IRS” means the Internal Revenue Service of the United States and any successor
thereto.

     “Key Man Insurance Policies” means current, valid and fully paid key man life
insurance policies insuring the lives of Mr. Mark Gill and Mr. Neil Sacker, each in the amount of
$10,000,000 that (i) each list the Company as the sole beneficiary thereunder, (ii) are in form and
substance, and placed with an insurer, acceptable to the Collateral Agent; provided, that the
Collateral Agent hereby agrees that Lloyd’s of London and MetLife shall be acceptable insurers for
purposes of this clause (ii), (iii) cannot be altered,

10

 

amended or modified in any respect and (iv) cannot be canceled without at least 30 days prior
written notice to the Collateral Agent, which policies have been collaterally assigned to the
Collateral Agent and the Credit Agreement Collateral Agent as their interests may appear.

     “Laboratories” has the meaning specified in the Guaranty and Security Agreement.

     “Laboratory Pledgeholder Agreement” has the meaning specified in the Guaranty and
Security Agreement.

     “Liabilities” means all claims, actions, suits, judgments, damages, losses, liability,
obligations, responsibilities, fines, penalties, sanctions, costs, fees, taxes, commissions,
charges, disbursements and expenses, in each case of any kind or nature (including interest accrued
thereon or as a result thereto and any fees, charges and disbursements of financial, legal and
other advisors and consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.

     “Library Liquidity Event” has the meaning set forth in the Amended and Restated
Holdings LLC Agreement.

     “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge,
deposit arrangement, encumbrance, easement, lien (statutory or other), security interest or other
security arrangement and any other preference, priority or preferential arrangement of any kind or
nature whatsoever, including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing lease having
substantially the same economic effect as any of the foregoing.

     “Management
Member” means either of Mr. Mark Gill or Mr. Neil Sacker.

     “Material Adverse Effect” means an effect that results in or causes, or could
reasonably be expected to result in or cause, a material adverse change in any of (a) the condition
(financial or otherwise), business, performance, prospects, operations or property of the Group
Members, taken as a whole, (b) the ability of any Note Party to perform its obligations under any
Note Document and (c) the validity or enforceability of any Note Document or the rights and
remedies of the Collateral Agent, the Holders and the other Secured Parties under any Note
Document.

     “Material Contract” means any Credit Agreement Document or any production agreement,
completion guaranty agreement, distribution agreement or other material agreement entered into in
connection with the development and production of a Film.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Mortgage” means any mortgage, deed of trust or other document executed or required
herein to be executed by any Note Party and granting a security interest over a fee interest in
real property in favor of the Collateral Agent as security for the Obligations.

     “Mortgage Supporting Documents” means, with respect to any Mortgage for a parcel of
real property, each document (including title policies or marked-up unconditional insurance binders
(in each case, together with copies of all documents referred to therein), maps, ALTA (or TLTA,
if applicable) as-built surveys (in form and as to date that is sufficiently acceptable to the
title insurer issuing title insurance to the Collateral Agent for such title insurer to deliver
endorsements to such title insurance as reasonably requested by the Collateral Agent),
environmental assessments and reports and evidence regarding recording and payment of fees,
insurance premium and taxes) that the Collateral Agent may

11

 

reasonably request, to create, register; perfect, maintain, evidence the existence, substance,
form or validity of or enforce a valid lien on such parcel of real property in favor of the
Collateral Agent for the benefit of the Secured Parties, subject only to such Liens as the
Collateral Agent may approve.

     “Multiemployer Plan” means any multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise has any obligation or
liability, contingent or otherwise.

     “Net Closing Proceeds” means the gross proceeds received by Holdings (and contributed
to the Company) and the Company from the Equity Investment and the issuance and sale of the Notes
minus the sum of transaction costs paid on or before the Closing Date and amounts funded
into the Overhead Reserve Account.

     “Non-U.S. Purchaser Party” means each of the Collateral Agent and each Holder, in each
case that is not a Domestic Person.

     “Notation of Guaranty” has the meaning specified in Section 3.2 hereof.

     “Note” has the meaning specified in Section 2.1 hereof.

     “Note Documents” means, collectively, this Agreement, any Notes, any Notations of
Guaranty, the Security Documents, the Intercreditor Agreement and, when executed, each document
(other than any Warrant) executed by a Note Party and delivered to the Collateral Agent or any
Holder in connection with or pursuant to any of the foregoing or the Obligations, together with any
modification of any term, or any waiver with respect to, any of the foregoing.

     “Note Party” means the Company and each Guarantor.

     “Notice of Assignment” means a notice of assignment and distributor’s acceptance, in
substantially the form of Exhibit G, or in such other form as shall be reasonably
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).

     “Obligations” means, with respect to any Note Party, all amounts, obligations,
liabilities, covenants and duties of every type and description owing by such Note Party to the
Collateral Agent, any Holder or any other Indemnitee arising out of, under, or in connection with, any Note Document,
whether direct or indirect (regardless of whether acquired by assignment), absolute or contingent,
due or to become due, whether liquidated or not, now existing or hereafter arising and however
acquired, and whether or not evidenced by any instrument or for the payment of money, including,
without duplication, (a) if such Note Party is the Company, all Indebtedness outstanding in respect of the Notes, (b)
all interest, whether or not accruing after the filing of any petition in bankruptcy or after the
commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim
for post-filing or post-petition interest is allowed in any such proceeding, and ( c) all other
fees, expenses (including fees, charges and disbursement of counsel), interest, commissions,
charges, costs, disbursements, indemnities and reimbursement of amounts paid and other sums
chargeable to such Note Party under and in accordance with the terms of any Note Document.

     “Operating Budget” means the Initial Operating Budget, together with any updates,
supplements or changes thereto as are delivered to the Holders in writing from time to time after
the date hereof in accordance with Section 6.1(e).

12

 

     “Overhead Reserve Account” means a Cash Collateral Account designated as the ‘The Film
Department Overhead Reserve Account’.

     “P&R Reserve Account” means a Controlled Deposit Account established to segregate funds
required to satisfy the participations and residuals obligations of the Company.

     “Patents” means all rights, title and interests (and all related IP Ancillary Rights)
arising under any Requirement of Law in or relating to letters patent and applications therefor.

     “PBGC” means the United States Pension Benefit Guaranty Corporation and any successor
thereto.

     “Permit” means, with respect to any Person, any permit, approval, authorization,
license, registration, certificate, concession, grant, franchise, variance or permission from,
and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the
force of law and applicable to or binding upon such Person or any of its property or to which such
Person or any of its property is subject.

     “Permitted Distribution Agreement” means any agreement entered into by a Note Party
pursuant to which such Note Party has sold, leased, licensed or assigned distribution rights or
other exploitation rights to any Film to a Person that is not an Affiliate.

     “Permitted Indebtedness” means any Indebtedness of any Group Member that is not
prohibited by Section 8.1 or any other provision of any Note Document.

     “Permitted Investment” means any Investment of any Group Member that is not
prohibited by Section 8.3 or any other provision of any Note Document.

     “Permitted Investors” means, collectively, the Class A Members and the Class B
Members of Holdings as of the Closing Date.

     “Permitted Lien” has the meaning specified in Section 8.2.

     “Permitted Refinancing” means Indebtedness constituting a refinancing or extension
of Permitted Indebtedness that (a) has an aggregate outstanding principal amount not
greater than the aggregate principal amount of such Permitted Indebtedness outstanding at
the time of such refinancing or extension, (b) has a weighted average maturity (measured as
of the date of such refinancing or extension) and maturity no shorter than that of such
Permitted Indebtedness, (c) is not entered into as part of a Sale and Leaseback transaction,
(d) is not secured by any property or any Lien other than those securing such Permitted
Indebtedness and (e) is otherwise on terms no less favorable to the Group Members, taken as
a whole, than those of such Permitted Indebtedness; provided, however,
that, notwithstanding the foregoing, (x) the terms of such Permitted Indebtedness may be
modified as part of such Permitted Refinancing if such modification would have been
permitted pursuant to Section 8.11 and (y) no Guaranty Obligation for such
Indebtedness shall constitute part of such Permitted Refinancing unless similar Guaranty
Obligations with respect to such Permitted Indebtedness existed and constituted Permitted
Indebtedness prior to such refinancing or extension.

     “Person” means any individual, partnership, corporation (including a business trust
and a public benefit corporation), joint stock company, estate, association, firm, enterprise,
trust, limited liability company, unincorporated association, joint venture and any other entity or
Governmental Authority.

13

 

     “Prepayment Date” has the meaning specified in Section 2.8 hereof.

     “Pro Forma Balance Sheet” has the meaning specified in Section 4.4(c).

     “Pro Forma Basis” means, with respect to any determination for any period, that such
determination shall be made by giving pro forma effect to the transaction giving rise to
the need to make such determination, as if each such transaction had been consummated on the first
day of such period, based on historical results accounted for in accordance with GAAP and, to the
extent applicable, reasonable assumptions that are specified in detail in the relevant Compliance
Certificate, Financial Statement or other document provided to the Collateral Agent or any Holder
in connection herewith in accordance with Regulation S-X of the Securities Act of 1933.

     “Projections” means, collectively, the Initial Projections and any document
delivered pursuant to Section 6.1(e).

     “Pro Rata Share” means, with respect to any Holder at any time, the percentage
obtained by dividing (a) the outstanding principal balance of all Notes held by such Holder by (b)
the aggregate principal balance of all Notes then outstanding.

     “PSC” means, with respect to a Qualifying Film, a Wholly Owned Subsidiary of the
Company that is a special purpose limited liability company formed for the preparation,
production, post-production, completion and delivery of a Qualifying Film.

     “Purchasers” means, collectively, the Persons that are listed on the signature
pages hereof as a “Purchaser” .

     “QIB” has the meaning specified in Section 4.19.

     “Qualifying Film” means any film that meets the eligibility criteria for inclusion in
the borrowing base established pursuant to the Credit Agreement.

     “Regulation S” has the meaning specified in Section 4.19.

     “Related Documents” means, collectively, the Credit Agreement, the Equity
Investment Documents, each Executive Services Agreement and each other document executed with respect to any
of the foregoing or any Related Transaction.

     “Related Person” means, with respect to any Person, each Affiliate of such Person and
each director, officer, employee, agent, trustee, representative, attorney, accountant and each
insurance, environmental, legal, financial and other advisor (including those retained in
connection with the satisfaction or attempted satisfaction of any condition set forth in
Article III) and other consultants and agents of or to such Person or any of its
Affiliates, together with, if such Person is the Collateral Agent, each other Person or individual
designated, nominated or otherwise mandated by or helping the Collateral Agent pursuant to and in
accordance with Section 10.4 or any comparable provision of any Note Document.

     “Related Transactions” means, collectively, the occurrence of the Agreement Effective
Date under and as defined in the Credit Agreement, the consummation of the Equity Investment, the
execution and delivery of all Related Documents and the payment of all related fees, costs and
expenses.

14

 

     “Release” means any release, threatened release, spill, emission, leaking, pumping,
pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Material into or through the environment.

     “Remedial Action” means all actions required to (a) clean up, remove, treat or in any
other way address any Hazardous Material in the indoor or outdoor environment, (b) prevent or
minimize any Release so that a Hazardous Material does not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment or (c) perform pre-remedial
studies and investigations and post-remedial monitoring and care with respect to any Hazardous
Material.

     “Required Holders” means, at any time, Holders of in excess of 50% in aggregate
principal amount of Notes outstanding.

     “Requirements of Law” means, with respect to any Person, collectively, the common
law and all federal, state, local, foreign, multinational or international laws, statutes, codes, treaties,
standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions,
decrees (including administrative or judicial precedents or authorities) and the interpretation or
administration thereof by, and other determinations, directives, requirements or requests of, any
Governmental Authority, in each case whether or not having the force of law and that are applicable
to or binding upon such Person or any of its property or to which such Person or any of its
property is subject.

     “Responsible Officer” means, with respect to any Person, any of the president, chief
executive officer, treasurer, assistant treasurer, controller, managing member or general partner
of such Person but, in any event, with respect to financial matters, any such officer that is
responsible for preparing the Financial Statements delivered hereunder and, with respect to the
Corporate Chart and other documents delivered pursuant to Section 6.1(d), documents
delivered on the Closing Date and documents delivered pursuant to Section 7.10, the
secretary or assistant secretary of such Person or any other officer responsible for maintaining
the corporate and similar records of such Person.

     “Restricted Payment” means (a) any dividend, return of capital, distribution or any
other payment or Sale of property for less than fair market value, whether direct or indirect
(including through the use of Hedging Agreements, the making, repayment, cancellation or
forgiveness of Indebtedness and similar Contractual Obligations) and whether in cash, Securities or
other property, on account of any Stock or Stock Equivalent of the Company or any of its
Subsidiaries, in each case now or hereafter outstanding, including with respect to a claim for
rescission of a Sale of such Stock or Stock Equivalent, (b) any redemption, retirement,
termination, defeasance, cancellation, purchase or other acquisition for value, whether direct or
indirect (including through the use of Hedging Agreements, the making, repayment, cancellation or
forgiveness of Indebtedness and similar Contractual Obligations), of any Stock or Stock Equivalent
of any Group Member or of any direct or indirect parent entity of the Company, now or hereafter
outstanding, and any payment or other transfer setting aside funds for any such redemption,
retirement, termination, cancellation, purchase or other acquisition, whether directly or
indirectly and whether to a sinking fund, a similar fund or otherwise, (c) any management or
similar fees payable by Holdings, the Company or any of its Subsidiaries (excluding payments made
pursuant to the Executive Services Agreements) or (d) any producer fees payable by a Note Party to
a member, officer, employee or other Affiliate of a Note Party (other than producer fees payable to
the Company).

     “S&P” means Standard & Poor’s Rating Services.

     “Sale and Leaseback Transaction” means, with respect to any Person (the
“obligor”), any Contractual Obligation or other arrangement with any other Person
(the “counterparty”) consisting of a lease by such obligor of any property that,
directly or indirectly, has been or is to be Sold by the obligor to

15

 

such counterparty or to any other Person to whom funds have been advanced by such counterparty
based on a Lien on, or an assignment of, such property or any obligations of such obligor under
such lease.

     “Scheduled Maturity Date” means June 27, 2014.

     “Second Amended and Restated Company LLC Agreement” means that certain Second Amended
and Restated Limited Liability Company Agreement of The Film Department LLC to become effective as
of the Closing Date, and as the same may be subsequently amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof and as permitted by this
Agreement.

     “Secured Parties” means the Holders, the Collateral Agent, each other Indemnitee and
any other holder of any Obligation of any Note Party.

     “Securities Act” means the Securities Act of 1933, as amended from time to time.

     “Security” means all Stock, Stock Equivalents, voting trust certificates, bonds,
debentures, instruments and other evidence of Indebtedness, whether or not secured, convertible or
subordinated, together with all certificates of interest, shares or participations in, all
certificates for the acquisition of, and all warrants, options and other rights to acquire, any of
the foregoing.

     “Security Documents” means, collectively, the Guaranty and Security Agreement, the
Intellectual Property Security Agreements, the Mortgages, the Control Agreements, the Collection
Account Agreement and all other instruments, document and agreements delivered by a Note Party
pursuant to this Agreement or any of the other Note Documents in order to grant to the Collateral
Agent a Lien on any real, personal or mixed property of such Note Party as security for its
Obligations.

     “Sell” means, with respect to any property, to sell, convey, transfer, assign,
license, lease or otherwise dispose of, any interest therein or to permit any Person to acquire any
such interest, including, in each case, through a Sale and Leaseback Transaction or through a sale,
factoring at maturity, collection of or other disposal, with or without recourse, of any notes or
accounts receivable. Conjugated forms thereof and the noun “Sale” have correlative meanings.

     “Solvent” means, with respect to any Person as of any date of determination, that, as
of such date, (a) the value of the assets (including assets reasonably anticipated to be acquired)
of such Person (both at fair value and present fair saleable value) is greater than the total
amount of liabilities (including contingent and unliquidated liabilities) of such Person, (b) such
Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person
does not have unreasonably small capital. In computing the amount of contingent or unliquidated
liabilities at any time, such liabilities shall be computed at the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.

     “Stock” means all shares of capital stock (whether denominated as common stock or
preferred stock), equity interests, beneficial, partnership or membership interests, joint venture
interests, participations or other ownership or profit interests in or equivalents (regardless of
how designated) of or in a Person (other than an individual), whether voting or non-voting
(excluding, for these purposes, phantom stock or stock or unit appreciation rights).

     “Stock Equivalents” means all securities convertible into or exchangeable for Stock or
any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or
otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible,
exchangeable or exercisable.

16

 

     “Subsidiary” means, with respect to any Person, any corporation, partnership, joint
venture, limited liability company, association or other entity, the management of which is,
directly or indirectly, controlled by, or of which an aggregate of more than 50% of the outstanding
Voting Stock is, at the time, owned or controlled directly or indirectly by, such Person or one or
more Subsidiaries of such Person.

     “SWDA” means the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.).

     “Tax Affiliate” means, (a) the Company and its Subsidiaries and (b) any Affiliate of
the Company with which the Company files or is eligible to file consolidated, combined or unitary
tax returns.

     “Tax Return” has the meaning specified in Section 4.8.

     “Threshold Amount” has the meaning specified in the Credit Agreement (as in effect on
the date hereof).

     “Title IV Plan” means a pension plan subject to Title IV of ERISA, other than a
Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any obligation or
liability, contingent or otherwise.

     “Trademarks” means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles, service marks, logos
and other source or business identifiers and, in each case, all goodwill associated therewith, all
registrations and recordations thereof and all applications in connection therewith.

     “Trade Secrets” means all right, title and interest (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to trade secrets.

     “UCC” means the Uniform Commercial Code of any applicable jurisdiction and, if the
applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as
in effect in the State of New York.

     “United States” means the United States of America.

     “U.S. Purchaser Party” means each Holder, in each case that is a Domestic Person.

     “Voting Stock” means Stock of any Person having ordinary power to vote in the election
of members of the board of directors, managers, trustees or other controlling Persons, of such
Person (irrespective of whether, at the time, Stock of any other class or classes of such entity
shall have or might have voting power by reason of the occurrence of any contingency).

     “Warrants” has the meaning specified in Section 2.2 hereof.

     “Wholly Owned Subsidiary” of any Person means any Subsidiary of such Person, all of
the Stock of which (other than nominal holdings and director’s qualifying shares) is owned by such
Person, either directly or through one or more Wholly Owned Subsidiaries of such Person.

     “Withdrawal Liability” means, at any time, any liability incurred (whether or not
assessed) by any ERISA Affiliate and not yet satisfied or paid in full at such time with respect to
any Multiemployer Plan pursuant to Section 4201 of ERISA.

17

 

     Section 1.2 UCC Terms. The following terms have the meanings given to them in the
applicable UCC: “commodity account”, “commodity contract”, “commodity intermediary”, “deposit
account”, “entitlement holder”, “entitlement order”, “equipment”, “financial asset”, “general
intangible”, “goods”, “instruments”, “inventory”, “securities account”, “securities intermediary”
and “security entitlement”.

     Section 1.3 Accounting Terms and Principles. (a) GAAP. All accounting
determinations required to be made pursuant hereto shall, unless expressly otherwise provided
herein, be made in accordance with GAAP. No change in the accounting principles used in the
preparation of any Financial Statement hereafter adopted by Holdings shall be given effect if such
change would affect a calculation that measures compliance with any provision of Article V or VIII
unless the Company and the Required Holders agree to modify such provisions to reflect such changes
in GAAP and, unless such provisions are modified, all Financial Statements, Compliance Certificates
and similar documents provided hereunder shall be provided together with a reconciliation between
the calculations and amounts set forth therein before and after giving effect to such change in
GAAP.

     (b) Pro Forma. All components of financial calculations made to determine compliance
with this Agreement shall be adjusted on a Pro Forma Basis to include or exclude, as the case may
be, without duplication, such components of such calculations attributable to any transaction
consummated after the first day of the applicable period of determination and prior to the end of
such period, as determined in good faith by the Company based on assumptions expressed therein and
that were reasonable based on the information available to the Company at the time of preparation
of the Compliance Certificate setting forth such calculations.

     Section 1.4 Interpretation. (a) Certain Terms. Except as set forth in any Note
Document, all accounting terms not specifically defined herein shall be construed in accordance
with GAAP. The terms “herein”, “hereof” and similar terms refer to this Agreement
as a whole. In the computation of periods of time from a specified date to a later specified date
in any Note Document, the terms “from” means “from and including” and the words “to” and
“until” each mean “to but excluding” and the word “through” means “to and
including.” In any other case, the term “including” when used in any Note Document means
“including without limitation.” The term “documents” means all writings, however evidenced
and whether in physical or electronic form, including all documents, instruments, agreements,
notices, demands, certificates, forms, financial statements, opinions and reports. The term
“incur” means incur, create, make, issue, assume or otherwise become directly or indirectly
liable in respect of or responsible for, in each case whether directly or indirectly, and the terms
“incurrence” and “incurred” and similar derivatives shall have correlative meanings.

     (b)Certain References. Unless otherwise expressly indicated, references (i) in this
Agreement to an Exhibit, Schedule, Article, Section or clause refer to the appropriate Exhibit or
Schedule to, or Article, Section or clause in, this Agreement and (ii) in any Note Document, to (A)
any agreement shall include, without limitation, all exhibits, schedules, appendixes and annexes to
such agreement and, unless the prior consent of any Secured Party required therefor is not
obtained, any modification to any term of such agreement, (B) any statute shall be to such statute
as modified from time to time and to any successor legislation thereto, in each case as in effect
at the time any such reference
is operative, (C) any time of day shall be a reference to New York time, and (D) the
“determination”, “discretion” or “satisfaction” (or words of similar effect) of, or “acceptance”
by, any Secured Party shall mean and refer to the sole and absolute determination, discretion or
satisfaction of, or acceptance by, such Secured Party. Titles of articles, sections, clauses,
exhibits, schedules and annexes contained in any Note Document are without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the parties hereto.
Unless otherwise expressly indicated, the meaning of any term defined

18

 

(including by reference) in any Note Document shall be equally applicable to both the singular and
plural forms of such term.

ARTICLE II

THE ISSUANCE AND SALE OF THE NOTES AND WARRANTS

     Section 2.1 Description of Notes. The Company will authorize the issuance and sale of
$30,000,000 aggregate principal amount of its Secured Second Lien Notes due 2014 (the
“Notes”) to be dated the date of issue, to bear interest (computed on the basis of a year
of 360 days and twelve 30-day months) from such date at the Applicable Interest Rate, payable
quarterly on the last day of March, June, September and December in each year (commencing September
30, 2007) and at maturity, and to bear interest at any time an Event of Default has occurred and is
continuing, at the Applicable Default Interest Rate, until such Event of Default has been waived,
payable on demand, to be expressed to mature on the Scheduled Maturity Date, and to be
substantially in the form attached hereto as Exhibit A. The Notes are not subject to
prepayment or redemption at the option of the Company prior to the Scheduled Maturity Date, except
on the terms and conditions and in the amounts and with the premium, if any, set forth in
Section 2.6 of this Agreement.

     Section 2.2 Warrant to Acquire Class C Units of Holdings. In consideration of, and as
an inducement to, the Purchasers’ purchase of the Notes, Holdings, agrees to deliver to the
Purchasers, on the Closing Date, warrants (the “Warrants”) to acquire an aggregate of 1,538
Class C Units of Holdings. The number of Class C Units of Holdings that may be acquired upon the
exercise of the Warrants is subject to adjustment in the manner and on the terms and conditions set
forth in the Warrants. Each Warrant shall be substantially in the form attached hereto as
Exhibit B, shall be dated the date of issue and shall be exercisable in the manner provided
therein for the number of the Class C Units of Holdings as provided therein. The Purchasers shall
have certain registration rights and other rights and obligations with respect to the Class C Units
of Holdings, all as provided in the Amended and Restated Holdings LLC Agreement.

     Section 2.3 Original Issue Discount. The regulations of the Internal Revenue Service
in effect require a determination of the value of the Warrants being delivered hereunder.
Accordingly, it is therefore agreed by the Company and the Purchasers that for Federal income tax
purposes the amount of the issue price allocated to the Warrants to be issued to the Purchasers is
$1,300,000.00 in the aggregate, which shall be the value ascribed to the Warrants by Holdings, the
Company, the Purchasers and any subsequent holder of the Notes and/or the Warrants for all
purposes, including the preparation of tax returns and the preparation of Holdings’ financial
statements.

     Section 2.4 Legends. The Notes will bear a legend reading substantially as follows:

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

19

 

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

20

 

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).

     The Warrants will bear a legend reading substantially as follows:

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED OR SOLD, UNLESS IT HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE
(AND, IN SUCH CASE, AS REASONABLY REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE BOARD OF DIRECTORS SHALL HAVE BEEN DELIVERED TO THE COMPANY
TO THE EFFECT THAT SUCH OFFER OR SALE IS NOT REQUIRED TO BE REGISTERED UNDER THE SECURITIES
ACT). THIS WARRANT IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER TERMS AND
CONDITIONS SET FORTH IN (X) THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF
THE FILM DEPARTMENT HOLDINGS LLC (“LLC AGREEMENT”), AND (X) THE OTHER TRANSACTION DOCUMENTS
DESCRIBED IN THE LLC AGREEMENT, IN EACH SUCH CASE, AS AMENDED FROM TIME TO TIME, COPIES OF
WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.

     Section 2.5 Mandatory Repayment of the Notes. The aggregate principal amount of the
Notes (including all capitalized interest and other amounts owed thereon at such time) shall be
paid in full in cash by the Company on the Scheduled Maturity Date.

     Section 2.6 Optional Prepayments. The Company may, at any time or from time to time
after 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	 
	Jun 27, 2008
	 	 	102	%
	June 27, 2009
	 	 	101	%
	June 27, 2010, 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

21

 

Affiliate, to cancel promptly all Notes acquired by it, and no Notes may be issued in substitution
or exchange for any such Notes.

     Section 2.7 Allocation of Prepayments. In the event of any prepayment of less than all
of the outstanding Notes pursuant to Section 2.6 hereof, the Company will allocate the
principal amount so to be prepaid (but only in units of $1,000) among the Holders in proportion, as
nearly as may be, to the respective unpaid principal amounts of the Notes held by them.

     Section 2.8 Notice of Prepayment of the Notes. In the event that the Company intends
to effect any prepayment pursuant to Section 2.6 hereof, the Company shall notify the
Holders being prepaid of any date set for prepayment (each, a “Prepayment Date”) at least
five Business Days but not more than 30 days prior to such Prepayment Date. Once notice of
prepayment of a Note is sent or mailed, such Note shall become due and payable on the relevant
Prepayment Date. On the relevant Prepayment Date, such Note shall be paid in full plus accrued
interest, if any, to the Prepayment Date and any premium required by Section 2.6, as
applicable, and immediately after such payment, each Holder shall surrender each of its prepaid
Notes to the Company and, if any portion of any such Note remains unpaid, the Company shall issue
to the Holder thereof a new Note representing such unpaid principal amount.

     Section 2.9 Method of Payment on the Notes. The principal of, premium, if any, and
interest on the Notes shall be payable in lawful currency of the United States by check at the
principal office of each of the Holders or, at each Holder’s option, by wire transfer in
immediately available funds to the account or accounts previously designated in writing by each of
the Holders at least three Business Days prior to the due date, in each case, without the
presentation or surrender of such Note or the making of any notation thereon. As of the date
hereof, the wire instructions for all such payments due to each Holder, and its address, are set
forth below each Holder’s name on Schedule I hereto.

     Section 2.10 Certain Tax Matters.

     (a) Registered Obligations. Anything in this Agreement to the contrary
notwithstanding, the Notes are registered obligations and the right, title and interest of the
Purchasers and their assignees in and to such Notes shall be transferable only upon notation of
such transfer in the register described in Section 11.2 and no assignment thereof shall be
effective until recorded therein as provided in Section 11.2. This Section 2.10(a)
and Section 11.2 shall be construed so that the Notes are 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).

     (b) Tax Forms. (i) Each Non-U.S. Purchaser Party that, at any of the following times,
is entitled to an exemption from United States withholding tax or, after a change in any
Requirement of Law, is subject to such withholding tax at a reduced rate under an applicable tax
treaty, shall (w) on or prior to the date such Non-U.S. Purchaser Party becomes a “Non-U.S.
Purchaser Party” hereunder, (x) on or prior to the date on which any such form or certification
expires or becomes obsolete, (y) after the occurrence of any event requiring a change in the most
recent form or certification previously delivered by it pursuant to this clause (i) and (z) from
time to time if requested by the Company, provide the Company with two completed originals of each
of the following, as applicable: (A) Forms W-8ECI (claiming exemption from U.S. withholding tax
because
the income is effectively connected with a U.S. trade or business), W-8BEN (claiming exemption
from, or a reduction of, U.S. withholding tax under an income tax treaty) or any successor forms,
(B) in the case of a Non-U.S. Purchaser Party claiming exemption under Sections 871(h) or 881(c) of
the Code, Form W-8BEN (claiming exemption from U.S. withholding tax under the portfolio interest
exemption) or any successor form and a certificate in form and substance acceptable to the Company
that such Non-U.S. Purchaser Party is not (1) a “bank” within the meaning of Section 881(c)(3)(A)
of the Code, (2) a “10 percent shareholder” of the Company within

22

 

the meaning of Section 881 (c)(3)(B) of the Code or (3) a “controlled foreign corporation”
described in Section 881 (c)(3)(C) of the Code or (C) any other applicable document prescribed by
the IRS certifying as to the entitlement of such Non-U.S. Purchaser Party to such exemption from
United States withholding tax or reduced rate with respect to all payments to be made to such
Non-U.S. Purchaser Party under the Note Documents. Unless the Company has received forms or other
documents satisfactory to it indicating that payments under any Note Document to or for a Non-U.S.
Purchaser Party are not subject to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, the Company shall withhold amounts required to be
withheld by applicable Requirements of Law from such payments at the applicable statutory rate.

     (ii) Each U.S. Purchaser Party shall (A) on or prior to the date such U.S. Purchaser Party
becomes a “U.S. Purchaser Party” hereunder, (B) on or prior to the date on which any such form or
certification expires or becomes obsolete, (C) after the occurrence of any event requiring a change
in the most recent form or certification previously delivered by it pursuant to this clause (ii)
and (D) from time to time if requested by the Company, provide the Company with two completed
originals of Form W-9 (certifying that such U.S. Purchaser Party is entitled to an exemption from
U.S. backup withholding tax) or any successor form.

ARTICLE III

CONDITIONS TO THE PURCHASERS’ OBLIGATIONS

     Section 3.1 Closing.

     (a) The Transaction. Subject to the terms and conditions hereof and on the basis of
the representations and warranties hereinafter set forth, the Company shall issue and sell to the
Purchasers, and the Purchasers shall purchase from the Company, $30,000,000 in aggregate principal
amount of Notes, on the Closing Date hereinafter mentioned and Holdings shall deliver to the
Purchasers, in consideration for the purchase of the Notes, the Warrants.

     (b) Location of the Closing. Delivery of the Notes and Warrants will be made at the
offices of Gibson, Dunn & Crutcher LLP, 2029 Century Park East, Los Angeles, California 90067-3026,
against payment therefor in funds current and immediately available, in the amount of the purchase
price, at 12:00 p.m. on June 27, 2007 or such later date and time as shall mutually be agreed upon
by the parties hereto (the “Closing Date”). The Notes delivered to each Purchaser on the
Closing Date will be delivered to such Purchaser in the form of a single registered Note in
substantially the form attached hereto as Exhibit A, and bearing the legends set forth in
Section 2.4, for the full amount of the purchase price therefor set forth opposite such
Purchaser’s name on Schedule I hereto (unless different denominations are specified by such
Purchaser), registered in such Purchaser’s name or in the name of its nominee, all as such
Purchaser may specify at any time prior to the date fixed for delivery. The Warrant delivered to
each Purchaser on the Closing Date will be delivered in the form of a single Warrant (unless
otherwise specified by the Purchaser), registered in the name of the Purchaser or in the name of
its nominee, all as such Purchaser may specify at any time prior to the date fixed for delivery.
The obligations of each Purchaser hereunder are several and not joint obligations and no Purchaser
shall have any obligation or liability to any Person for the performance or non-performance by any
other Purchaser hereunder.

     Section 3.2 Conditions to the Purchasers’ Obligations. The Purchasers shall not be
obligated to purchase any Notes on the Closing Date, or to take, fulfill, or perform any other
action hereunder, until the following conditions have been satisfied or provided for in a manner
satisfactory to the Purchasers, or waived in writing by the Purchasers:

23

 

     (a) Certain Documents. The Purchasers shall have received each of the following, each
dated the Closing Date, in form and substance reasonably satisfactory to the Purchasers:

     (i) (A) this Agreement duly executed by Holdings, the Company, each Purchaser and the
Collateral Agent, (B) the Notes, each duly issued, executed and delivered by the Company
and (C) the Warrants, each duly issued, executed and delivered by Holdings;

     (ii) the Guaranty and Security Agreement, duly executed by the Company and each
Guarantor, together with (A) a notation of guaranty (a “Notation of Guaranty”),
substantially in the form of Exhibit C hereto, duly executed by each Guarantor, (B)
copies of UCC, Intellectual Property and other appropriate search reports and of all
effective prior filings listed therein, together with evidence of the termination of such
prior filings and other documents with respect to the priority of the security interest of
the Collateral Agent in the Collateral, in each case as may be reasonably requested by the
Collateral Agent, (C) all documents representing all Securities, if any, being pledged
pursuant to such Guaranty and Security Agreement and related undated powers or endorsements
duly executed in blank and (D) all Control Agreements that, in the reasonable judgment of
the Collateral Agent, are required for the Note Parties to comply with the Note Documents
as of the Closing Date, each duly executed by, in addition to the applicable Note Party,
the applicable financial institution;

     (iii) the Intercreditor Agreement, duly executed by each party thereto;

     (iv) duly executed favorable opinions of counsel to the Note Parties, each addressed
to the Collateral Agent and the Purchasers and addressing such matters as the Purchasers
may reasonably request;

     (v) a copy of each Constituent Document of each Note Party that is on file with any
Governmental Authority in any jurisdiction, certified as of a recent date by such
Governmental Authority, together with, if applicable, certificates attesting to the good
standing of such Note Party in such jurisdiction and each other jurisdiction where such
Note Party is qualified to do business as a foreign entity or where such qualification is
necessary (and, if appropriate in any such jurisdiction, related tax certificates);

     (vi) a certificate of the secretary or other officer of each Note Party in charge of
maintaining books and records of such Note Party certifying as to (A) the names and
signatures of each officer of such Note Party authorized to execute and deliver any Note
Document, (B) the Constituent Documents of such Note Party attached to such certificate are
complete and correct copies of such Constituent Documents as in effect on the date of such
certification (or, for any such Constituent Document delivered pursuant to clause
(v) above, that there have been no changes from such Constituent Document so
delivered), together with the Second Amended and Restated Company LLC Agreement and the
Amended and Restated Holdings LLC Agreement, in each case that are intended to become
effective on and as of the Closing Date after giving effect to the Related Transactions and
(C) the resolutions of such Note Party’s board of directors or other appropriate governing
body approving and authorizing the execution,
delivery and performance of each Note Document to which such Note Party is a party;

     (vii) a certificate of a Responsible Officer of each of Holdings and the Company to
the effect that (A) the representations and warranties set forth in any Note Document are
true and correct in all material respects on and as of the Closing Date and no Default or
Event of Default shall be continuing, (B) both the Note Parties taken as a whole and the
Company are Solvent after giving effect to the consummation of the Related Transactions,
the application of the proceeds

24

 

thereof in accordance with Section 7.9 and the payment of all estimated legal, accounting
and other fees and expenses related hereto and thereto, (C) all conditions to the
Purchasers’ obligations to purchase the Notes have been satisfied and (D) attached thereto
are complete and correct copies of each Related Document;

     (viii) the Key Man Insurance Policies and insurance certificates in form and substance
satisfactory to the Collateral Agent demonstrating that all insurance policies required by
Section 7.5 are in full force and effect and have all endorsements required by such
Section 7.5, together with a collateral assignment of the proceeds of the Key Man
Insurance Policies in favor of the Collateral Agent and the Credit Agreement Collateral
Agent; and

     (ix) such other documents and information as any Purchaser may reasonably request.

     (b) Fee and Expenses. All fees and reimbursements of costs or expenses, in each case
due and payable under any Note Document or Related Document on or before the Closing Date shall
have been paid or payment provided therefor.

     (c) Consents. Each Group Member shall have received all consents and authorizations
required pursuant to any material Contractual Obligation with any other Person and shall have
obtained all Permits of, and effected all notices to and filings with, any Governmental Authority,
in each case, as may be necessary in connection with the consummation of the transactions
contemplated in any Note Document or Related Document (including the Related Transactions).

     (d) Related Transactions. The Purchasers shall be satisfied that concurrently with the
issuance and sale of the Notes and Warrants (i) all of the conditions precedent to the
effectiveness of the Credit Agreement shall have been satisfied, (ii) the Equity Investment shall
have been made and the Company shall have received gross proceeds therefrom in an amount not less
than $25,000,000 and (iii) the Executive Services Agreements (and an employment agreement with the
Company’s head of international sales) shall have been executed and delivered by each party thereto
and otherwise shall be in full force and effect.

     (e) Reference Checks. The Purchasers shall have received completed reference checks
with respect to the members and the senior management of Holdings and the Company, the results of
which are satisfactory to the Purchasers in their sole discretion.

     (f) Representations and Warranties; No Defaults. The following statements shall be true on
such date, both before and after giving effect to the issuance and sale of the Notes and Warrants:
(i) the representations and warranties set forth in any Note Document shall be true and correct in
all material respects on and as of such date or, to the extent such representations and warranties
expressly relate to an earlier date, on and as of such earlier date and (ii) no Default or Event of
Default shall be continuing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE NOTE PARTIES

     To induce the Collateral Agent and the Purchasers to enter into the Note Documents, each of
Holdings and the Company (and, to the extent set forth in any other Note Document, each other Note
Party) represents and warrants to each of them each of the following:

     Section 4.1 Corporate Existence; Compliance with Law. Each Group Member (a) is duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, (b)

25

 

is duly qualified to do business as a foreign entity and in good standing under the laws of each
jurisdiction where such qualification is necessary, except where the failure to be so qualified or
in good standing would not, in the aggregate, have a Material Adverse Effect, (c) has all requisite
power and authority and the legal right to own, pledge, mortgage and operate its property, to lease
or sublease any property it operates under lease or sublease and to conduct its business as now or
currently proposed to be conducted, (d) is in compliance with its Constituent Documents, (e) is in
compliance with all applicable Requirements of Law except where the failure to be in compliance
would not have a Material Adverse Effect and (f) has all necessary Permits from or by, has made all
necessary filings with, and has given all necessary notices to, each Governmental Authority having
jurisdiction, to the extent required for such ownership, lease, sublease, operation, occupation or
conduct of business, except where the failure to obtain such Permits, make such filings or give
such notices would not, in the aggregate, have a Material Adverse Effect.

     Section 4.2 Note and Related Documents. (a) Power and Authority. The
execution, delivery and performance by each Note Party of the Note Documents and Related Documents
to which it is a party, the issuance and sale of the Notes and Warrants, and the consummation of
the Related Transactions and other transactions contemplated therein (i) are within such Note
Party’s corporate or similar powers and, at the time of execution thereof, have been duly
authorized by all necessary corporate and similar action (including, if applicable, consent of
holders of its Securities), (ii) do not (A) contravene such Note Party’s Constituent Documents, (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 any Note Party 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 Note
Party or any of its Subsidiaries and (iii) do not require any Permit of, or filing with, any
Governmental Authority or any consent of, or notice to, any Person, other than (A) with respect to
the Note Documents, the filings required to perfect the Liens created by the Note Documents and (B)
those listed on Schedule 4.2 and that have been, or will be prior to the Closing Date,
obtained or made, copies of which have been, or will be prior to the Closing Date, delivered to the
Purchasers, and each of which on the Closing Date will be in full force and effect.

     (b) Due Execution and Delivery. From and after its delivery to the Purchasers or the
Collateral Agent, as the case may be, each Note Document (other than the Notes and Warrants) and
Related Document has been duly executed and delivered to the other parties thereto by each Note
Party party thereto, is the legal, valid and binding obligation of such Note Party and is
enforceable against such Note Party in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the rights and remedies of creditors
generally and general principles of equity. The Notes and Warrants have been duly and validly
authorized and, when issued, sold and delivered pursuant to this Agreement, will have been duly
executed, issued and delivered and will be legal, valid and binding obligations of Holdings (in the
case of the Warrants) and the Company (in the case of the Notes), entitled to, in the case of the
Notes, the rights, preferences, privileges and restrictions set forth in this Agreement and the
other Note
Documents and, in the case of the Warrants, the Amended and Restated Holdings LLC Agreement,
except as may be limited by bankruptcy, insolvency or other similar laws affecting the rights and
remedies of creditors generally and general principles of equity. The Class C Units issuable upon
exercise of the Warrants have been duly and validly authorized and, when issued and paid for in
accordance with the terms of the Warrants, will be validly issued and legal, valid and binding
obligations of Holdings, not subject to any mandatory contribution requirements set forth in the
Amended and Restated Holdings LLC Agreement or otherwise.

26

 

     (c) Material Contracts. No default, or event that, with the giving of notice or lapse
of time or both, would constitute a default, has occurred under any Material Contract the
consequence of which is that a Material Adverse Effect has occurred or is reasonably expected to
occur.

     Section 4.3 Ownership of Group Members. Set forth on Schedule 4.3 is a complete and
accurate list showing, as of the date hereof, for each Group Member and each Subsidiary of any
Group Member and each joint venture of any of them, its jurisdiction of organization, the number of
shares of each class of Stock authorized (if applicable), the number outstanding on the date hereof
(and after giving effect to the issuance and sale of the Notes and Warrants) and the number and
percentage of the outstanding shares of each such class owned (directly or indirectly) by the
Company or Holdings. All outstanding Stock of each of them has been validly issued, is fully paid
(except with respect to the Class A Units, Class F-1 Units and Class F-2 Units of Holdings, which
vest over time as provided in the Amended and Restated Holdings LLC Agreement) and non-assessable
(to the extent applicable) and, except in the case of Holdings, is owned beneficially and of record
by a Group Member (or, in the case of the Company, by Holdings) free and clear of all Liens other
than the security interests created by the Note Documents. There are no Stock Equivalents with
respect to the Stock of any Group Member (other than Holdings) or any Subsidiary of any Group
Member or any joint venture of any of them and, as of the date hereof, except as set forth on
Schedule 4.3, there are no Stock Equivalents with respect to the Stock of Holdings. Except
as set forth on Schedule 4.3, there are no Contractual Obligations or other understandings
to which any Group Member, any Subsidiary of any Group Member or any joint venture of any of them
is a party with respect to (including any restriction on) the issuance, voting, Sale or pledge of
any Stock or Stock Equivalent of any Group Member or any such Subsidiary or joint venture.

     Section 4.4 Financial Statements. (a) Prior to the Closing Date, Holdings and the
Company had no property (other than, in the case of Holdings, the Stock of the Company and, in the
case of the Company, proceeds of advances of the Equity Investment received by it in an amount of
not more than $500,000 and the mark “The Film Department”, an application for which was filed by
the Company with the United States Patent and Trademark Office on August 4, 2006, Serial Number
78945662), liabilities or Contractual Obligations other than the Note Documents and the Related
Documents and the Company had no Subsidiaries.

     (b) The Initial Projections reflect projections for the five year period beginning on April
2007, on a quarterly basis through 2012. The Initial Projections and the Operating Budget are based
upon estimates and assumptions stated therein, all of which the Company believes to be reasonable
and fair in light of conditions and facts known to the Company as of the Closing Date and as of any
date an amended or supplemented Operating Budget is delivered to the Collateral Agent and in each
case reflect the good faith, reasonable estimates by the Company of the future Consolidated
financial performance of Holdings and the other information projected therein for the periods set
forth therein.

     (c) The unaudited Consolidated balance sheet of Holdings (the “Pro Forma Balance Sheet”)
delivered to the Purchasers prior to the date hereof, has been prepared as of April 2007, and
reflects as of such date, on a Pro Forma Basis for the Related
Transactions and the other transactions contemplated herein to occur on the Closing Date, the
Consolidated financial condition of Holdings, and the assumptions expressed therein are reasonable
based on the information available to Holdings and the Company at such date and on the Closing
Date.

     Section 4.5 Material Adverse Effect. Since December 31, 2006, there have been no
events, circumstances, developments or other changes in facts that would, in the aggregate, have a
Material Adverse Effect.

27

 

     Section 4.6 Solvency. Both before and after giving effect to (a) the issuance and sale
of the Notes and Warrants, (b) the consummation of the Related Transactions and (c) the payment and
accrual of all transaction costs in connection with the foregoing, both the Note Parties taken as a
whole and the Company are and will be Solvent.

     Section 4.7 Litigation. There are no pending (or, to the knowledge of any Group
Member, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or
disputes affecting the Company or any of its Subsidiaries with, by or before any Governmental
Authority other than those that (a) cannot reasonably be expected to affect adversely the
Obligations, the Note Documents, the Letters of Credit, the Related Documents, the Related
Transactions and the other transactions contemplated therein and (b) would not, in the aggregate,
have a Material Adverse Effect.

     Section 4.8 Taxes. All federal, state, local and foreign income and franchise and
other material tax returns, reports and statements (collectively, the “Tax Returns”)
required to be filed by any Tax Affiliate have been filed with the appropriate Governmental
Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax
Returns are true and correct in all material respects, and all taxes, charges and other impositions
reflected therein or otherwise due and payable have been paid prior to the date on which any
Liability may be added thereto for non-payment thereof except for those contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves are maintained on the
books of the appropriate Tax Affiliate in accordance with GAAP. No Tax Return is under audit or
examination by any Governmental Authority and no notice of such an audit or examination or any
assertion of any claim for Taxes has been given or made by any Governmental Authority. Proper and
accurate amounts have been withheld by each Tax Affiliate from their respective employees for all
periods in full and complete compliance with the tax, social security and unemployment withholding
provisions of applicable Requirements of Law and such withholdings have been timely paid to the
respective Governmental Authorities. No Tax Affiliate has participated in a “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4(b) or has been a member of
an affiliated, combined or unitary group other than the group of which a Tax Affiliate is the
common parent.

     Section 4.9 Margin Regulations. The Company is not engaged in the business of
extending credit for the purpose of, and no proceeds from the issuance and sale of the Notes and
Warrants will be used for the purpose of, buying or carrying margin stock (within the meaning of
Regulation U of the Federal Reserve Board) or extending credit to others for the purpose of
purchasing or carrying any such margin stock.

     Section 4.10 No Burdensome Obligations; No Defaults. No Group Member is a party to any
Contractual Obligation, no Group Member has Constituent Documents containing obligations, and, to
the knowledge of any Group Member, there are no applicable Requirements of Law, in each case the
compliance with which would have, in the aggregate, a Material Adverse Effect. No Group Member
(and, to the knowledge of each Group Member, no other party thereto) is in default under or with
respect to any Contractual Obligation of any Group Member, other than those that would not, in the
aggregate, have a Material Adverse Effect.

     Section 4.11 Investment Company Act. No Group Member is an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company”, as such terms are defined in the Investment Company Act of 1940.

     Section 4.12 Labor Matters. There are no strikes, work stoppages, slowdowns or
lockouts existing, pending (or, to the knowledge of any Group Member, threatened) against or
involving any Group Member, except, for those that would not, in the aggregate, have a Material
Adverse Effect. As of the Closing Date, (a) there is no collective bargaining or similar agreement
with any union, labor

28

 

organization, works council or similar representative covering any employee of any Group Member,
(b) no petition for certification or election of any such representative is existing or pending
with respect to any employee of any Group Member and (c) no such representative has sought
certification or recognition with respect to any employee of any Group Member.

     Section 4.13 ERISA. As of the date hereof, no Group Member has any Title IV Plans,
Multiemployer Plans or material Benefit Plans. Each Benefit Plan, and each trust thereunder,
intended to qualify for tax exempt status under Section 401 or 501 of the Code or other
Requirements of Law so qualifies. Except for those that would not, in the aggregate, have a
Material Adverse Effect, (x) each Benefit Plan is in compliance with applicable provisions of
ERISA, the Code and other Requirements of Law, (y) there are no existing or pending (or to the
knowledge of any Group Member, threatened) claims (other than routine claims for benefits in the
normal course), sanctions, actions, lawsuits or other proceedings or investigation involving any
Benefit Plan to which any Group Member incurs or otherwise has or could have an obligation or any
Liability and (z) no ERISA Event is reasonably expected to occur. As of the date hereof, no ERISA
Event has occurred in connection with which obligations and liabilities (contingent or otherwise)
remain outstanding. No ERISA Affiliate would have any Withdrawal Liability as a result of a
complete withdrawal from any Multiemployer Plan on the date this representation is made.

     Section 4.14 Environmental Matters. (a) The operations of each Group Member are and
have been in compliance with all applicable Environmental Laws, including obtaining, maintaining
and complying with all Permits required by any applicable Environmental Law, other than
non-compliances that, in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, (b) no Group Member is party to, and no Group Member and no real property currently
(or to the knowledge of any Group Member previously) owned, leased, subleased, operated or
otherwise occupied by or for any Group Member is subject to or the subject of, any Contractual
Obligation or any pending (or, to the knowledge of any Group Member, threatened) order, action,
investigation, suit, proceeding, audit, claim, demand, dispute or notice of violation or of
potential liability or similar notice under or pursuant to any Environmental Law other than those
that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect,
(c) no Lien in favor of any Governmental Authority securing, in whole or in part, Environmental
Liabilities has attached to any property of any Group Member and, to the knowledge of any Group
Member, no facts, circumstances or conditions exist that could reasonably be expected to result in
any such Lien attaching to any such property, (d) no Group Member has caused or, to the knowledge
of such Group Member, suffered to occur a Release of Hazardous Materials at, to or from any real
property of any Group Member and each such real property is free of contamination by any Hazardous
Materials except for such Release or contamination that could not reasonably be expected to result,
in the aggregate, in a Material Adverse Effect, (e) no Group Member (i) is or has been engaged in,
or has permitted any current or former tenant to engage in, operations, or (ii) knows of any facts,
circumstances or conditions, including receipt of any information request or notice of potential
responsibility under CERCLA or similar Environmental Laws, that, in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect and (f) each Group Member has made
available to the Holders copies of all existing environmental reports, reviews and audits and
all documents pertaining to actual or potential Environmental Liabilities, in each case to the
extent such reports, reviews, audits and documents are in their possession, custody or control.

     Section 4.15 Intellectual Property. Each Group Member owns or licenses all
Intellectual Property that is necessary for the operations of its businesses. To the knowledge of
each Group Member, (a) the conduct and operations of the businesses of each Group Member does not
infringe, misappropriate, dilute, violate or otherwise impair any Intellectual Property owned by
any other Person and (b) no other Person has contested any right, title or interest of any Group
Member in, or relating to, any Intellectual Property, other than, in each case, (i) as cannot
reasonably be expected to affect adversely the Note Documents and the transactions contemplated
therein and (ii) would not, in the aggregate, have a Material

29

 

Adverse Effect. In addition, (x) there are no pending (or, to the knowledge of any Group Member,
threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or
disputes affecting any Group Member with respect to, (y) no judgment or order regarding any such
claim has been rendered by any competent Governmental Authority and no settlement agreement or
similar Contractual Obligation has been entered into by any Group Member with respect to, and (z)
no Group Member knows or has any reason to know of any valid basis for any claim based on, any such
infringement, misappropriation, dilution, violation or impairment or contest, other than, in each
case, (i) as cannot reasonably be expected to affect adversely the Note Documents and the
transactions contemplated therein and (ii) would not, in the aggregate, have a Material Adverse
Effect.

     Section 4.16 Title; Real Property. (a) Each Group Member has good and marketable fee
simple title to all owned real property and valid leasehold interests in all leased real property,
and owns all personal property, in each case that is purported to be owned or leased by it,
including those reflected on the most recent Financial Statements delivered by the Company, and
none of such property is subject to any Lien except Permitted Liens.

     (b) As of the date hereof, no Group Member owns any real property in fee simple and the only
leasehold interest in real property of any Group Member is the leased location of the Company
described in Section 11.11 as the notice address thereof.

     Section 4.17 Full Disclosure. The information prepared or furnished by or on behalf of
any Group Member in connection with any Note Document or Related Document (including the
information contained in any Financial Statement or Disclosure Document) or the consummation of any
Related Transaction or any other transaction contemplated therein, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements
contained therein, in light of the circumstances when made, not misleading; provided,
however, that projections contained therein (including any projections described in
Section 4.4(b)) are not to be viewed as factual and that actual results during the periods
covered thereby may differ from the results set forth in such projections by a material amount. All
projections that are part of such information (including those set forth in any Projections
delivered subsequent to the Closing Date) are based upon good faith estimates and stated
assumptions believed to be reasonable as of the date made in light of conditions and facts then
known and, as of such date, reflect good faith, reasonable estimates of the information projected
for the periods set forth therein. All facts known to any Group Member and material to an
understanding of the financial condition, business, property or prospects of the Group Member taken
as one enterprise have been disclosed to the Purchasers.

     Section 4.18 Eligibility Requirements. The Notes and Warrants satisfy the eligibility
requirements of Rule 144A(d)(3) under the Securities Act.

     Section 4.19 Private Offering. (a) Holdings and the Company acknowledge that the
Purchasers have advised each thereof that each will make offers (the “Exempt Resales”) of
the Notes and Warrants purchased by the Purchasers on the Closing Date on the terms set forth in
the Disclosure Documents, as amended or supplemented, and that the offerees hereof shall be (i)
persons whom the Purchasers reasonably believe to be “qualified institutional buyers” as defined in
Rule 144A under the Securities Act (“QIBs”), (ii) a limited number of institutional
“Accredited Investors” referred to in Rule
501(a)(1), (3) or (7) under the Securities Act that make certain representations and
agreements to Holdings, the Company and the selling Purchaser as set forth in Exhibit H to
this Agreement (each, an “Accredited Investor”) or (iii) outside the United States to
persons other than U.S. Persons in offshore transactions outside the United States in reliance on
Regulation S (“Regulation S”; as used herein, the terms “offshore transaction,” “United
States” and “U.S. person” have the respective meanings given to them in Regulation S) under the
Securities Act (such persons specified in clauses (i), (ii) and (iii) being

30

 

referred
to herein as the “Eligible Purchasers”). Assuming that (i) the Notes and Warrants are
issued, sold and delivered under the circumstances contemplated by this Agreement, (ii) the
representations and warranties of the Purchasers in Article XII hereof are true, (iii) the
representations and warranties of the Accredited Investors in the
form set forth in Exhibit H to
the Agreement are true and (iv) each of the Eligible Purchasers is a QIB or an Accredited Investor
or a person who is not a “U.S. person” who acquires the Notes outside the United States in an
“offshore transaction” (within the meaning of Regulation S) (A) registration under the Securities
Act of the Notes and Warrants is not required in connection with the offer and sale of the Notes
and Warrants to the Purchasers in the manner contemplated by the Disclosure Documents or this
Agreement and (B) initial resales of the Notes and Warrants by the Purchasers on the terms and in
the manner set forth in the Disclosure Documents and this Agreement are exempt from the
registration requirements of the Securities Act. In the case of each offer or sale of the Notes and
Warrants, no form of general solicitation or general advertising was used by Holdings, the Company
or their representatives, including, but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been invited by any general solicitation
or general advertising.

     (b) Other than the issuance and sale to the Permitted Investors and other equity investors party to
the Amended and Restated Holdings LLC Agreement on the Closing Date in connection with the Equity
Investment and related warrant issuances, no securities similar to the Notes or Warrants have been
issued and sold by Holdings or the Company, as applicable, within the six month period immediately
prior to the date hereof. Each of Holdings and the Company agrees that neither it, nor anyone
acting on its behalf, will offer or sell the Notes or Warrants, or any similar securities, in the
future if such offer or sale might bring the issuance and sale of the Notes or Warrants to the
Purchasers hereunder within the provisions of Section 5 of the Securities Act.

     (c) No qualification of this Agreement under the Trust Indenture Act of 1939, as amended, is
required in connection with the offer, issuance and sale of the Notes contemplated hereby or in
connection with the Exempt Resales.

ARTICLE V

RESERVED

ARTICLE VI

REPORTING COVENANTS

     Each of Holdings and the Company (and, to the extent set forth in any other Note Document, each
other Note Party) agrees with the Purchasers and the Collateral Agent to each of the following, as
long as any Obligation remains outstanding:

     Section 6.1 Financial Statements. The Company shall deliver to the Purchasers each of the
following:

     (a) Quarterly Reports. As soon as available, and in any event within 60 days after the end
of each Fiscal Quarter of each Fiscal Year, the Consolidated unaudited balance sheets of Holdings
as of the close of such Fiscal Quarter and related Consolidated statements of income and cash flow
for such Fiscal Quarter and that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter, setting forth in comparative form the figures for the corresponding period in the prior
Fiscal Year and the figures

31

 

contained in the latest Projections, in each case certified by a Responsible Officer of the Company
as fairly presenting in all material respects the Consolidated financial position, results of
operations and cash flows of Holdings as at the dates indicated and for the periods indicated in
accordance with GAAP (subject to the absence of footnote disclosure and normal year-end audit
adjustments).

     (b) Annual
Reports. As soon as available, and in any event within 95 days after the end of each
Fiscal Year, the Consolidated balance sheets of Holdings as of the end of such year and related
Consolidated statements of income, stockholders’ equity and cash flow for such Fiscal Year, each
prepared in accordance with GAAP, together with a certification by the Group Members’ Accountants
that (i) such Consolidated Financial Statements fairly present in all material respects the
Consolidated financial position, results of operations and cash flow of Holdings as at the dates
indicated and for the periods indicated therein in accordance with GAAP without qualification as to
the scope of the audit or as to going concern and without any other similar qualification and (ii)
in the course of the regular audit of the businesses of the Group Members, which audit was
conducted in accordance with the standards of the United States’ Public Company Accounting
Oversight Board (or any successor entity), such Group Members’ Accountants have obtained no
knowledge that an Event of Default is continuing or, if in the opinion of the Group Members’
Accountants such an Event of Default is continuing, a statement as to the nature thereof.

     (c) Compliance
Certificate: Borrowing Base Certificate. Together with each delivery of any
Financial Statement pursuant to clause (a) or (b) above, a Compliance Certificate duly executed by
a Responsible Officer of the Company that, among other things, states that no Default or Event of
Default is continuing as of the date of delivery of such Compliance Certificate or, if a Default or
Event of Default is continuing, states the nature thereof and the action that the Company proposes
to take with respect thereto. Contemporaneously with the delivery thereof to the Credit Agreement
Administrative Agent or lenders under the Credit Agreement, a copy of each executed borrowing base
certificate, gap value percentage certificate and Borrower Settlement Statement delivered by the
Company under the Credit Agreement, together with all supporting detail and documentation delivered
in conjunction therewith.

     (d) Corporate
Chart and Other Collateral Updates. As part of the Compliance Certificate delivered
pursuant to clause (c) above, a certificate by a Responsible Officer of the
Company, substantially in the form thereof delivered pursuant to the Credit Agreement, that (i) the
Corporate Chart attached thereto (or the last Corporate Chart delivered pursuant to this clause
(d)) is correct and complete as of the date of such Compliance Certificate, (ii) the Note Parties
have delivered all documents they are required to deliver pursuant to any Note Document on or prior
to the date of delivery of such Compliance Certificate and (iii) complete and correct copies of all
documents modifying any term of any Constituent Document of any Group Member or any Subsidiary or
joint venture thereof on or prior to the date of delivery of such Compliance Certificate have been
delivered to the Purchasers or are attached to such certificate.

     (e) Supplements
to Operating Budget: Additional Projections. As soon as available and in any event
not later than 30 days after the end of each Fiscal Year commencing with the Fiscal Year ending
December 31, 2007, (i) an updated Operating Budget, approved by the board of directors of Holdings,
for the forthcoming five year period, which shall contain substantially the same type of
information as the Initial Operating Budget and (ii) forecasts prepared by management of Holdings
and the Company (A) for each month in such next succeeding Fiscal Year and (B) for each other
succeeding Fiscal Year through the Fiscal Year containing the Scheduled Maturity Date, in each case
including in such forecasts (x) a projected year-end Consolidated balance sheet, income statement
and statement of cash flows, (y) a statement of all of the material assumptions on which such
forecasts are based and (z) substantially the same type of financial information as that contained
in the Initial Projections. As

32

 

soon as available, the Company shall deliver to the Purchasers any revisions to the Operating
Budget or the forecasts, in either case delivered pursuant to
clauses (i) or (ii) above.

     (f) Management
Discussion and Analysis. Together with each delivery of any Compliance Certificate
pursuant to clause (c) above, a discussion and analysis of the financial condition and results of
operations of the Group Members for the portion of the Fiscal Year then elapsed and discussing the
reasons for any significant variations from the Projections for such period and the figures for the
corresponding period in the previous Fiscal Year.

     (g) Audit
Reports, Management Letters, Etc. Together with each delivery of any Financial Statement
for any Fiscal Year pursuant to clause (b) above, copies of each management letter, audit report or
similar letter or report received by any Group Member from any independent registered certified
public accountant (including the Group Members’ Accountants) in connection with such Financial
Statements or any audit thereof, each certified to be complete and correct copies by a Responsible
Officer of the Company as part of the Compliance Certificate delivered in connection with such
Financial Statements.

     (h) Insurance. Together with each delivery of any Financial Statement for any Fiscal Year pursuant
to clause (b) above, certified as complete and correct by a Responsible Officer of the Company as
part of the Compliance Certificate delivered in connection with such
Financial Statements, a summary of all material insurance coverage maintained as of the date
thereof by any Group Member.

     Section 6.2 Other Events. The Company shall give the Holders notice of each of the
following (which may be made by telephone if promptly confirmed in writing) promptly after any
Responsible Officer of any Group Member knows of it: (a)(i) any Default and (ii) any event that
would have a Material Adverse Effect, specifying, in each case, the nature and anticipated effect
thereof and any action proposed to be taken in connection therewith, (b) the commencement of, or
any material developments in, any action, investigation, suit, proceeding, audit, claim, demand,
order or dispute with, by or before any Governmental Authority affecting any Group Member or any
property of any Group Member that (i) seeks injunctive or similar relief, (ii) in the reasonable
judgment of the Company, exposes any Group Member to liability in an aggregate amount in excess of
$100,000 or (iii) if adversely determined would have a Material Adverse Effect and (c) the
acquisition of any material fee interest in real property.

     Section 6.3 Copies of Notices and Reports. The Company shall promptly deliver to the
Holders copies of each of the following: (a) all reports that Holdings or the Company transmits to
its security holders generally, including, without limitation, all reports and other information
required to be transmitted by Holdings to its members pursuant to Section 8.2 of the Amended and
Restated Holdings LLC Agreement or otherwise, (b) all documents that any Group Member files with
the Securities and Exchange Commission, the National Association of Securities Dealers, Inc., any
securities exchange or any Governmental Authority exercising similar functions, (c) all press
releases not made available directly to the general public, (d) all material documents transmitted
or received pursuant to, or in connection with, any Related Document and (e) any material document
transmitted or received pursuant to, or in connection with, any Contractual Obligation governing
Indebtedness of any Group Member.

     Section 6.4 Taxes. The Company shall give the Holders notice of each of the following
(which may be made by telephone if promptly confirmed in writing) promptly after any Responsible
Officer of any Group Member knows of it: (a) the creation, or filing with the IRS or any other
Governmental Authority, of any Contractual Obligation or other document extending, or having the
effect of extending, the period for assessment or collection of any taxes with respect to any Tax
Affiliate and (b) the creation of any Contractual Obligation of any Tax Affiliate, or the receipt
of any request directed to

33

 

any Tax Affiliate, to make any adjustment under Section 481(a) of the Code, by reason of a change
in accounting method or otherwise, which would have a Material Adverse Effect.

     Section 6.5 Labor Matters. The Company shall give the Holders notice of each of the
following (which may be made by telephone if promptly confirmed in writing), promptly after, and in
any event within 30 days after any Responsible Officer of any Group Member knows of it: (a) the
commencement of any material labor dispute to which any Group Member is or may become a party,
including any strikes, lockouts or other
disputes relating to any of such Person’s plants and other facilities and (b) the incurrence by any
Group Member of any Worker Adjustment and Retraining Notification Act or related or similar
liability incurred with respect to the closing of any plant or other facility of any such Person
(other than, in the case of this clause (b), those that would not, in the aggregate, have a
Material Adverse Effect).

     Section 6.6 ERISA Matters. The Company shall give the Holders (a) on or prior to any filing
by any ERISA Affiliate of any notice of intent to terminate any Title
IV Plan, a copy of such
notice and (b) promptly, and in any event within 10 days, after any Responsible Officer of any
ERISA Affiliate knows that a request for a minimum funding waiver under Section 412 of the Code has
been filed with respect to any Title IV Plan or Multiemployer Plan, a notice (which may be made by
telephone if promptly confirmed in writing) describing such waiver request and any action that any
ERISA Affiliate proposes to take with respect thereto, together with a copy of any notice filed
with the PBGC or the IRS pertaining thereto.

     Section 6.7 Environmental Matters. (a) The Company shall provide the Holders notice of each
of the following promptly after any Responsible Officer of any Group Member knows of it (and, upon
reasonable request of any Holder, documents and information in connection therewith):
(i)(A) unpermitted Releases, (B) the receipt by any Group Member of any notice of violation of or
potential liability or similar notice under, or the existence of any condition that could
reasonably be expected to result in violations of or liabilities under, any Environmental Law or
(C) the commencement of, or any material change to, any action, investigation, suit, proceeding,
audit, claim, demand, dispute alleging a violation of or liability under any Environmental Law,
that, for each of clauses (A), (B) and (C) above (and, in the
case of clause (C), if adversely
determined), in the aggregate for each such clause, could reasonably be expected to result in
Environmental Liabilities in excess of $100,000, (ii) the receipt by any Group Member of
notification that any property of any Group Member is subject to any Lien in favor of any
Governmental Authority securing, in whole or in part, Environmental Liabilities and (iii) any
proposed acquisition or lease of real property if such acquisition or lease would have a reasonable
likelihood of resulting in aggregate Environmental Liabilities in excess of $100,000.

     (b) Upon request of a Holder, the Company shall provide the Holders a report containing an update
as to the status of any environmental, health or safety compliance, hazard or liability issue
identified in any document delivered to any Secured Party pursuant to any Note Document or as to
any condition reasonably believed by a Holder to result in a Material Adverse Effect.

     Section 6.8 Rule 144A Information Delivery Obligations. For so long as any of the Notes
and Warrants are outstanding, the Company shall furnish to the Holders and holders of Warrants and
to prospective purchasers of Notes or Warrants designated by such Persons, upon the request of such
Persons or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act, unless the Company is then subject to and in compliance with
Section 13 or 15(d) of
the Exchange Act (the foregoing agreement being for the benefit of such holders from time to time
and prospective purchasers of the Notes or Warrants designated by such holders).

34

 

     Section 6.9. Other Information. The Company shall provide the Holders with such other
documents and information with respect to the business, property,
condition (financial or
otherwise), legal, financial or corporate or similar affairs or operations of any Group Member as
any Holder may from time to time reasonably request.

ARTICLE VII

AFFIRMATIVE COVENANTS

     Each of Holdings and the Company (and, to the extent set forth in any other Note Document, each
other Note Party) agrees with the Holders and the Collateral Agent to each of the following, as
long as any Obligation remains outstanding:

     Section 7.1 Maintenance of Corporate Existence. Each Group Member shall (a) preserve and
maintain its legal existence, except in the consummation of transactions expressly permitted by
Sections 8.4 and 8.7, and (b) preserve and maintain its rights (charter and statutory), privileges
franchises and Permits necessary or desirable in the conduct of its business, except, in the case
of this clause (b), where the failure to do so would not, in the aggregate, have a Material Adverse
Effect.

     Section 7.2
Compliance with Laws, Etc. Each Group Member shall comply with all applicable
Requirements of Law, Contractual Obligations and Permits, except for such failures to comply that
would not, in the aggregate, have a Material Adverse Effect.

     Section 7.3
Payment of Obligations. Each Group Member shall pay or discharge before they become
delinquent (a) all material claims, taxes, assessments, charges and levies imposed by any
Governmental Authority and (b) all other lawful claims that if unpaid would, by the operation of
applicable Requirements of Law, become a Lien upon any property of any Group Member, except, in
each case, for those whose amount or validity is being contested in good faith by proper
proceedings diligently conducted and for which adequate reserves are being maintained on the books
of the appropriate Group Member in accordance with GAAP.

     Section 7.4 Maintenance of Property. Each Group Member shall maintain and preserve (a) in
good working order and condition all of its property necessary in the conduct of its business
(taking into consideration ordinary wear and tear) and (b) all rights, permits, licenses, approvals
and privileges (including all Permits) necessary, used or useful, whether because of its ownership,
lease, sublease or other operation or occupation of property or other conduct of its business, and
shall make all necessary or appropriate filings with, and give all required notices to, Government
Authorities, except for such failures to maintain and preserve the
items set forth in clauses (a)
and (b) above that would not, in the aggregate, have a Material Adverse Effect.

     Section 7.5 Maintenance of Insurance. Each Group Member shall (a) maintain or cause to be
maintained in full force and effect all policies of insurance of any kind with respect to the
property and businesses of the Group Members with financially sound and reputable insurance
companies or associations (in each case that are not Affiliates of the Company) of a nature and
providing such coverage as is sufficient and as is customarily carried by businesses of the size
and character of the business of the Group Members, including, without limitation, with respect to
any Film, cast and pre-production film producer’s indemnity insurance (including essential element
coverage), negative film insurance, faulty stock insurance, extra expense insurance, producer’s
errors and omissions insurance, comprehensive and general and automobile liability insurance, third
party property damage liability insurance, miscellaneous equipment (including camera, sound and
lighting equipment and mobile studio units) floater, props, sets and wardrobe all risk floaters,
worker’s compensation or equivalent employer’s liability insurance, foreign

35

 

comprehensive general liability (if applicable), liability, foreign worker’s compensation (if
applicable) and guild accident insurance, (b) cause all such insurance of any Note Party to name
the Collateral Agent, on behalf of the Secured Parties, as additional insured or loss payee, as
appropriate, and to provide that no cancellation (and, to the extent obtainable in the exercise of
reasonable commercial efforts, no material addition in amount or material change) in coverage in
each case shall be effective until after 30 days’ notice thereof to the Collateral Agent and (c)
maintain in full force and effect the Key Man Insurance Policies, together with a collateral
assignment of the proceeds thereof in favor of the Credit Agreement Collateral Agent and the
Collateral Agent (and, with respect to such Key Man Insurance Policies, such Key Man Insurance
Policies shall be extended, renewed or replaced with alternative Key Man Insurance Policies no
later than 30 days prior to the stated expiry thereof).

     Section 7.6 Keeping of Books. The Group Members shall keep proper books of record and
account, in which full, true and correct entries shall be made in accordance with GAAP and all
other applicable Requirements of Law of all financial transactions and the assets and business of
each Group Member.

     Section 7.7 Access to Books and Property. Each Group Member shall permit the Holders, as
often as reasonably requested, at any reasonable time during normal business hours and with
reasonable advance notice (except that, during the continuance of an Event of Default, no such
notice shall be required) to: (a) visit and inspect the property of each Group Member and examine
and make copies of and abstracts from, the corporate (and similar), financial, operating and other
books and records of each Group Member; provided, that unless a Default or an Event of Default
shall have occurred and be continuing, all expenses of any Holder or any Related Person thereof in
connection therewith shall be borne by such Holder or Related Person, (b) discuss the affairs,
finances and accounts of each Group Member with any officer or director of any Group Member and (c)
communicate directly with any registered certified public accountants (including the Group Members’
Accountants) of any Group Member. Each Group Member shall authorize their respective registered
certified public accountants (including the Group Members’ Accountants) to communicate directly
with the Collateral Agent,
the Holders and their Related Persons and to disclose to the Holders and their Related Persons all
financial statements and other documents and information as they might have and the Collateral
Agent or the Holders reasonably requests with respect to any Group Member.

     Section 7.8 Environmental. Each Group Member shall comply with, and maintain its real
property, whether owned, leased, subleased or otherwise operated or occupied, in compliance with,
all applicable Environmental Laws (including by implementing any Remedial Action necessary to
achieve such compliance or that is required by orders and directives of any Governmental Authority)
except for failures to comply that would not, in the aggregate, have a Material Adverse Effect.
Without limiting the foregoing, if an Event of Default is continuing or if the Required Holders at
any time have a reasonable basis to believe that there exist violations of Environmental Laws by
any Group Member or that there exist any Environmental Liabilities, in each case, that would have,
in the aggregate, a Material Adverse Effect, then each Group Member shall, promptly upon receipt of
request from the Required Holders, cause the performance of, and allow the Holders and their
Related Persons access to such real property for the purpose of conducting, such environmental
audits and assessments, including subsurface sampling of soil and groundwater, and cause the
preparation of such reports, in each case as the Required Holders may from time to time reasonably
request. Such audits, assessments and reports, to the extent not conducted by the Holders or any of
their Related Persons, shall be conducted and prepared by reputable environmental consulting firms
reasonably acceptable to the Required Holders and shall be in form and substance reasonably
acceptable to the Required Holders.

     Section 7.9 Use of Proceeds. The proceeds from the issuance and sale of the Notes shall be
used by the Company (and, to the extent permitted to be distributed to them by the Company, each
other

36

 

Group Member) solely (a) for the payment of transaction costs, fees and expenses incurred in
connection with the Note Documents and the transactions contemplated therein (including the Related
Transactions), (b) to finance the development and production of Films, and (c) for working capital
and general corporate and similar purposes, including the making of distributions to the extent
permitted by Section 8.5 hereof and the reimbursement of the Company’s expenditures in respect of
its Films.

     Section 7.10 Additional Collateral and Guaranties. To the extent not delivered to the
Collateral Agent on or before the Closing Date (including in respect of after-acquired property and
Persons that become Subsidiaries of any Note Party after the Closing Date), each Group Member
shall, promptly, do each of the following, unless otherwise agreed by the Required Holders:

     (a) deliver to the Collateral Agent such modifications to the terms of the Note Documents (or, to
the extent applicable as determined by the Collateral Agent, such other documents), in each case in
form and substance reasonably satisfactory to the Collateral
Agent and as the Collateral Agent reasonably deems necessary or advisable in order to ensure the
following:

     (i) (A) each Subsidiary of any Note Party that has entered into Guaranty Obligations with respect
to any Indebtedness of the Company and (B) each Wholly Owned Subsidiary of any Note Party shall
guaranty, as primary obligor and not as surety, the payment of the Obligations of the Company; and

     (ii)
each Note Party (including any Person required to become a Guarantor pursuant to clause (i)
above) shall effectively grant to the Collateral Agent, for the benefit of the Secured Parties, a
valid and enforceable security interest in all of its property, including all of its interests in
any Stock and Stock Equivalents and other Securities, as security for the Obligations of such Note
Party;

     (b) deliver to the Collateral Agent all documents representing all Stock, Stock Equivalents and
other Securities pledged pursuant to the documents delivered pursuant
to clause (a) above, together
with undated powers or endorsements duly executed in blank;

     (c) upon request of the Required Holders, deliver to the Collateral Agent a Mortgage on any real
property owned by any Note Party, together with all Mortgage Supporting Documents relating
thereto (unless such real property is located in a jurisdiction outside the United States);

     (d) take all other actions necessary or advisable to ensure the validity or continuing validity of
any guaranty for any Obligation or any Lien securing any Obligation, to perfect, maintain, evidence
or enforce any Lien securing any Obligation or to ensure such Liens have the same priority as that
of the Liens on similar Collateral set forth in the Note Documents executed on the Closing Date (or, for
Collateral located outside the United States, a similar priority acceptable to the Collateral
Agent), including the filing of UCC financing statements in such jurisdictions as may be required
by the Note Documents or applicable Requirements of Law or as the Collateral Agent may otherwise
reasonably request (and Holdings and the Company each hereby ratify its authorization for the
Collateral Agent to have filed any initial financing statement or amendment thereto under the UCC
(or other similar laws) in effect in any jurisdiction if filed prior to the date hereof); and

     (e) deliver to the Collateral Agent legal opinions relating to the matters described in this
Section 7.10, which opinions shall be as reasonably required by, and in form and substance and from
counsel reasonably satisfactory to, the Collateral Agent.

37

 

     Section 7.11
Deposit Accounts; Securities Accounts, Collection Accounts and Cash Collateral
Accounts. (a) Each Group Member shall (i) deposit immediately upon receipt all Collections in
the Collection Account, (ii) request in writing and otherwise take such reasonable steps to ensure
that all of their respective account debtors (including any completion guarantors or other
insurers) forward payment of all Collections owed by them to such Group Member directly to the
Collection Account, (iii) deposit immediately
all of its Cash Equivalents in securities accounts that are Controlled Securities Accounts, (iv)
establish and maintain a P&R Reserve Account and maintain funds on deposit in such account
sufficient to satisfy the participations and residuals obligations of the Company required to be
satisfied from time to time and (v) cause all of their respective deposit accounts and securities
accounts to be Controlled Deposit Accounts or Controlled Securities Accounts, as the case may be
(other than any deposit accounts that are Cash Collateral Accounts);
provided, however, that each
Group Member may maintain payroll, withholding tax and other fiduciary accounts that are not
Controlled Deposit Accounts.

     (b) All funds maintained in the Collection Account shall be governed by the Collection Account
Agreement and shall be invested solely in Cash Equivalents, which Collection Account Agreement
shall be required to be in place with respect to the Collection Account only during those periods
required by the terms of the Credit Agreement (and, during any other period, the provisions of the
preceding clause (a)(iv) shall govern the Collection Account).

     (c) No Secured Party shall have any responsibility for, or bear any risk of loss of, any investment
or income of any funds in any Controlled Deposit Account or Cash Collateral Account. From time to
time after funds are deposited in a Cash Collateral Account (other than the Borrower Liquidity
Reserve Accounts, which shall be governed by Section 7.11(c) of the Credit Agreement), the
Collateral Agent shall transfer funds then held in such Cash Collateral Account for application to
the payment of Obligations in accordance with the terms of the Guaranty and Security Agreement, but
only to the extent permitted by the Intercreditor Agreement. No Group Member and no Person claiming
on behalf of or through any Group Member shall have any right to demand payment of any funds held
in any Cash Collateral Account at any time prior to the payment in full of all Obligations.

ARTICLE VIII

NEGATIVE COVENANTS

     Each of Holdings and the Company (and, to the extent set forth in any other Note Document, each
other Note Party) agrees with the Holders and the Collateral Agent to each of the following, as
long as any Obligation remains outstanding:

     Section 8.1
Indebtedness. No Group Member shall, directly or indirectly, incur or otherwise remain
liable with respect to or responsible for, any Indebtedness or Guaranty Obligations except for the
following:

     (a) the Obligations;

     (b) Indebtedness consisting of Capitalized Lease Obligations (other than with respect to a lease
entered into as part of a Sale and Leaseback Transaction) and purchase money Indebtedness, in each
case incurred by any Group Member (other than Holdings) to finance the acquisition, repair,
improvement or construction of fixed or capital assets of such Group Member, together with any
Permitted Refinancing of any Indebtedness
permitted hereunder in reliance upon this clause (b);
provided, however, that (i) the aggregate
outstanding principal amount of all such Indebtedness does not exceed $500,000 at any time and (ii)
the principal amount of such Indebtedness does not exceed the lower of the cost or fair market
value of the property so acquired or built or of such repairs or improvements financed, whether
directly or

38

 

through a Permitted Refinancing, with such Indebtedness (each measured at the time such
acquisition, repair, improvement or construction is made);

     (c) intercompany loans owing to any Group Member and constituting Permitted Investments of such
Group Member;

     (d) Guaranty Obligations of any Group Member with respect to Indebtedness or other unsecured
obligations incurred in the ordinary course of business of any Group Member other than Holdings
(other than Indebtedness permitted hereunder in reliance upon clause
(b) above, for which Guaranty Obligations may be permitted to the extent set forth in such
clauses);

     (e) Guaranty Obligations incurred in connection with the issuance of completion guaranties in
respect of Qualifying Films by an Approved Completion Guarantor;

     (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 $247,500,000 less 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.

     Section 8.2 Liens. No Group Member shall incur, maintain or otherwise suffer to exist any
Lien upon or with respect to any of its property, whether now owned or hereafter acquired, or
assign any right to receive income or profits, except for the following (collectively, “Permitted
Liens”):

     (a) Liens created pursuant to any Note Document;

     (b) Liens on the property of the Company or any of its Subsidiaries securing Indebtedness permitted
hereunder in reliance upon Section 8.1(b); provided, however, that (i) such Liens exist prior to
the acquisition of, or attach substantially simultaneously with, or within 90 days after, the
acquisition, repair, improvement or construction of, such property financed, whether directly or
through a Permitted Refinancing, by such Indebtedness and (ii) such Liens do not extend to any
property of any Group Member
other than the property (and proceeds thereof) acquired or built, or the improvements or repairs,
financed, whether directly or through a Permitted Refinancing, by such Indebtedness;

     (c) Liens on the property of the Company or any of its Subsidiaries securing the Permitted
Refinancing of any Indebtedness secured by any Lien on such property permitted hereunder in
reliance upon clause (b) above or this clause (c) without any change in the property subject to
such Liens;

     (d) Liens pursuant to written security agreements (in form and substance reasonably acceptable to
the Collateral Agent) in favor of guilds required by the guilds pursuant to the terms of collective
bargaining agreements; provided, that such Liens are subordinated to the Liens created under the
Security Documents on a non-cross collateralized basis with respect to the corresponding Film
pursuant to a Guild Subordination Agreement or otherwise as a matter of law;

39

 

     (e) Liens incurred in the ordinary course of business with regard to goods provided or services
rendered by laboratories and post-production facilities, so long as any such laboratory or post-production facility has entered into a Laboratory Pledgeholder Agreement;

     (f) Liens to secure distribution, exhibition and\or exploitation rights of licensees pursuant to
Permitted Distribution Agreements; provided, that such Liens shall attach solely to the
distribution, exhibition and\or exploitation rights granted by the Note Party pursuant to the
subject Permitted Distribution Agreement and to non-exclusive rights of access to the materials in
respect of the Film that is the subject of the Permitted Distribution Agreement and to an interest
in the copyright of the Film to the extent necessary to permit the licensee to exercise the
distribution, exhibition and/or exploitation rights granted pursuant to the subject Permitted
Distribution Agreement;

     (g) Liens in favor of an Approved Completion Guarantor in connection with a completion bond issued
with respect to a Qualifying Film, to secure the right of such Approved Completion Guarantor to
recoup its contribution to the production costs of the Qualifying Film and other amounts recoupable
by it in respect thereof; provided, that such Liens are subordinated to the Liens in favor of the
Collateral Agent and the Credit Agreement Collateral Agent, in each case on terms and conditions
reasonably acceptable to the Collateral Agent and the Credit Agreement Collateral Agent, and in any
event solely with respect to the applicable Qualifying Film on a non-cross collateralized basis;

     (h) Liens
securing Indebtedness permitted hereunder in reliance upon Section 8.1(f);

     (i) Liens (i) with respect to the payment of taxes, assessments or other governmental charges or
(ii) of suppliers, carriers, materialmen, warehousemen, workmen or mechanics and other similar
Liens, in each case imposed by law or arising in the ordinary course of business, and, for each of
the Liens in clauses (i) and (ii) above for amounts that are not yet due or that are being
contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves or other appropriate provisions are
maintained on the books of such Person in accordance with GAAP;

     (j) Liens of a collection bank on items in the course of collection arising under Section 4- 208 of
the UCC as in effect in the State of New York or any similar section under any applicable UCC or
any similar Requirement of Law of any foreign jurisdiction;

     (k) pledges or cash deposits made in the ordinary course of business (i) in connection with
workers’ compensation, unemployment insurance or other types of social security benefits (other
than any Lien imposed by ERISA), (ii) to secure the performance of bids, tenders, leases (other
than Capital Leases) sales or other trade contracts (other than for the repayment of borrowed
money) or (iii) made in lieu of, or to secure the performance of, surety, customs, reclamation or
performance bonds (in each case not related to judgments or litigation);

     (1) judgment liens (other than for the payment of taxes, assessments or other governmental charges)
securing judgments and other proceedings not constituting an Event of Default under Section 9.1(f)
and pledges or cash deposits made in lieu of, or to secure the performance of, judgment or appeal
bonds in respect of such judgments and proceedings;

     (m) Liens (i) arising by reason of zoning restrictions, easements, licenses, reservations,
restrictions, covenants, rights-of-way, encroachments, minor defects or irregularities in title
(including leasehold title) and other similar encumbrances on the use of real property or (ii)
consisting of leases, licenses or subleases granted by a lessor, licensor or sublessor on its
property (in each case other than Capital Leases) otherwise permitted under Section 8.4 that, for
each of the Liens in clauses (i) and (ii) above, do not, in the aggregate, materially (x) impair
the value or marketability of such real property or

40

 

(y) interfere with the ordinary conduct of the business conducted and proposed to be conducted at
such real property;

     (n) Liens of landlords and mortgagees of landlords (i) arising by statute or under any lease or
related Contractual Obligation entered into in the ordinary course of business, (ii) on fixtures
and movable tangible property located on the real property leased or subleased from such landlord,
(iii) for amounts not yet due or that are being contested in good faith by appropriate proceedings
diligently conducted and (iv) for which adequate reserves or other appropriate provisions are
maintained on the books of such Person in accordance with GAAP; and

     (o) the title and interest of a lessor or sublessor in and to personal property leased or subleased
(other than through a Capital Lease), in each case extending only to such personal property.

     Section 8.3 Investments. No Group Member shall make or maintain, directly or indirectly,
any Investment except for the following:

     (a) Investments in cash and Cash Equivalents;

     (b) (i) endorsements for collection or deposit in the ordinary course of business consistent with
past practice, (ii) extensions of trade credit (other than to Affiliates of the Company) arising or
acquired in the ordinary course of business and (iii) Investments received in settlements in the
ordinary course of business of such extensions of trade credit; and

     (c) Investments by (i) Holdings in the Company and (ii) any Note Party (other than Holdings) in any
other Note Party (other than Holdings).

     Section 8.4 Asset Sales. No Group Member shall Sell any of its property (other than cash),
including, without limitation, pursuant to a Library Liquidity Event, or issue shares of its own
Stock, except for the following:

     (a) In each case to the extent entered into in the ordinary course of business and made to a Person
that is not an Affiliate of the Company, Sales of Cash Equivalents, inventory or property that has
been abandoned or become obsolete or worn out;

     (b) a true lease or sublease of real property not constituting Indebtedness and not entered into as
part of a Sale and Leaseback Transaction;

     (c) (i) any Sale of any property (other than their own Stock or Stock Equivalents) by any
Group Member (other than Holdings) to any other Group Member (other than Holdings) to the extent
any
resulting Investment constitutes a Permitted Investment, (ii) any Restricted Payment by any Group
Member (other than Holdings) permitted pursuant to Section 8.5 and (iii) any cash distribution by
Holdings of the proceeds of Restricted Payments from any other Group Member to the extent permitted
in Section 8.5;

     (d) (i) any Sale or issuance by Holdings of its own Stock, (ii) any Sale or issuance by the
Company of its own Stock to Holdings, (iii) any Sale or issuance by any Subsidiary of the Company
of its
own Stock to any Group Member (other than Holdings), provided, however, that the proportion of such
Stock and of each class of such Stock (both on an outstanding and fully-diluted basis) held by the
Note
Parties (other than Holdings), taken as a whole, does not change as a result of such Sale or
issuance and
(iv) to the extent necessary to satisfy any Requirement of Law in the jurisdiction of incorporation
of any

41

 

Subsidiary of the Company, any Sale or issuance by such Subsidiary of its own Stock constituting
directors’ qualifying shares or nominal holdings; and

     (e) licenses, grants and sales of distribution rights in Films pursuant to Permitted Distribution
Agreements entered into in the ordinary course of business.

     Section 8.5 Restricted Payments. No Group Member (other than Holdings) shall directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted Payment except for
the following (and Holdings shall not use the proceeds of any Restricted Payment made in reliance
under clause (c) below other than as set forth in such clause(c)):

     (a) (i) Restricted Payments (A) by any Group Member (other than Holdings) that is a Note
Party to any Note Party other than Holdings and (B) by any Group Member that is not a Note Party to
any
Group Member other than Holdings and (ii) dividends and distributions by any Subsidiary of the
Company that is not a Note Party to any holder of its Stock, to the extent made to all such holders
ratably
according to their ownership interests in such Stock;

     (b) dividends and distributions declared and paid on the common Stock of any Group Member (other
than Holdings) ratably to the holders of such common Stock and payable only in common Stock of such
Group Member; and

     (c) cash distributions on the Stock of the Company paid to Holdings solely for the purpose of
funding the following:

     (i) permitting the holders of the Stock of Holdings to pay their respective United States federal,
state and local income tax obligations with respect to the taxable income allocated to them from
Holdings and its Subsidiaries so long as (A) the payment of such cash distributions occurs no more
frequently than once per Fiscal Year of Holdings and in any event no earlier than 10 Business Days
prior to the date that the subject income tax obligations are required to be satisfied and (B)
after giving effect to the payment of such cash distributions by each of Holdings and the Company
(1) no Event of Default shall have occurred and be continuing or would result therefrom and (2) the
aggregate amount of all such cash distributions with respect to any Fiscal Year of Holdings does
not exceed the taxable income allocated to such holders by Holdings multiplied by the Applicable
Tax Rate for each such holder (and so long as the foregoing conditions are satisfied Holdings may
make corresponding cash distributions of amounts received from the Company in reliance upon this
clause (i) in accordance with the terms of the Amended and Restated Holdings LLC Agreement);

     (ii)additional
cash distributions by Holdings of amounts received from the Company so long as
after giving effect to any such distribution by either Holdings or the Company (A)
no Default or Event of Default shall have occurred and be continuing or would result therefrom, (B)
Borrowing Availability is greater than zero (-0-), (C) not less than the Threshold Amount is on
deposit in the Borrower Liquidity Reserve Accounts (and, in the case of the Interest Reserve
Account, such account is fully funded), (D) all Net Closing Proceeds (including any portion of the
funds released from the Overhead Reserve Account that are not actually applied to fund general
overhead expenses) shall have been utilized in the development and production of Qualifying Films,
(E) the sum of (I) Consolidated Net Worth plus (II) Borrowing Availability is greater than
$55,000,000, (F) Consolidated Net Worth is at least $30,000,000 and (G) in the case of Holdings,
the proceeds of such distribution are distributed in accordance with Section 7.4 of the Amended and
Restated Holdings LLC Agreement (and so long as the foregoing conditions are satisfied Holdings may
make corresponding cash distributions of amounts received from the

42

 

Company
in reliance upon this clause (ii) in accordance with the terms of the Amended and Restated
Holdings LLC Agreement); and

     (iii)
ordinary operating expenses of Holdings; provided, however, that the amount of such cash
distributions paid in any Fiscal Year shall not exceed $250,000 in the aggregate.

     Section 8.6 Prepayment of Indebtedness. No Group Member shall (x) prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof any Indebtedness, (y) set
apart any property for such purpose, whether directly or indirectly and whether to a sinking fund,
a similar fund or otherwise, or (z) make any payment in
violation of any subordination terms of any
Indebtedness; provided, however, that each Group Member may, to the extent otherwise permitted by
the Note Documents, do each of the following:

     (a) (i) repay or prepay any Indebtedness outstanding under the Credit Agreement, including pursuant
to any refinancing, replacement or refinancing thereof in accordance
with the Intercreditor
Agreement and (ii) consummate a Permitted Refinancing;

     (b) prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof
(or set apart any property for such purpose) (A) in the case of any Group Member that is not a Note
Party, any Indebtedness owing by such Group Member to any other Group Member (other than Holdings)
and (B) otherwise, any Indebtedness owing to any Note Party (other than Holdings); and

     (c) make regularly scheduled or otherwise required repayments or redemptions of Indebtedness (other
than Indebtedness owing to any Affiliate of the Company).

     Section 8.7 Fundamental Changes. No Group Member shall (a) dissolve or liquidate (except
for a dissolution or liquidation of any PSC following completion and delivery of the Qualifying
Film for which such PSC was formed), (b) merge, consolidate or amalgamate with any Person, (c)
acquire all or substantially all of the Stock or Stock Equivalents of any Person (except in
connection with the organization by the Company
of new Wholly Owned Subsidiaries) or (d) acquire any brand or all or substantially all of the
assets of any Person or all or substantially all of the assets constituting any line of business,
division, branch, operating division or other unit operation of any Person, in each case except for
the following: (y) the merger, consolidation or amalgamation of any Subsidiary of the Company into
any Note Party and (z) the merger, consolidation or amalgamation of any Group Member (other than
Holdings) for the sole purpose, and with the sole material effect, of changing its State of
organization within the United States; provided, however, that (A) in the case of any merger,
consolidation or amalgamation involving the Company, the Company shall be the surviving Person and
(B) in the case of any merger, consolidation or amalgamation involving any other Note Party, a Note
Party shall be the surviving corporation and all actions required to maintain the perfection of the
Lien of the Collateral Agent on the Stock or property of such Note Party shall have been made.

     Section 8.8 Change in Nature of Business. (a) No Group Member (other than Holdings) shall
carry on any business, operations or activities (whether directly, through a joint venture, or
otherwise) substantially different from those contemplated to be carried on by the Company and its
Subsidiaries at the date hereof and business, operations and activities reasonably related thereto.

     (b) Holdings shall not engage in any business, operations or activity, or hold any property, other
than (i) holding Stock and Stock Equivalents of the Company, (ii) issuing and selling its own
Stock, (ii) paying taxes, (iii) holding directors’ and members’ meetings, preparing corporate and
similar records and other activities required to maintain its separate legal existence and
structure, (iv) preparing reports to, and preparing and making notices to and filings with,
Governmental Authorities and to its holders of

43

 

Stock and Stock Equivalents and (v) receiving, and holding proceeds of, Restricted Payments from
the Company and its Subsidiaries and distributing the proceeds thereof to the extent permitted in
Section 8.5.

     Section 8.9 Transactions with Affiliates. No Group Member shall, except as otherwise
expressly permitted herein, enter into any other transaction directly or indirectly with, or for
the benefit of, any Affiliate of the Company that is not a Note Party (including Guaranty
Obligations with respect to any obligation of any such Affiliate), except for (a) transactions in
the ordinary course of business on a basis no less favorable to such Group Member as would be
obtained in a comparable arm’s length transaction with a Person not an Affiliate of the Company,
(b) Restricted Payments, the proceeds of which, if received by Holdings, are used as required by
Section 8.5, (c) reasonable salaries and other reasonable director or employee compensation to
officers and directors of any Group Member and (d) transactions
set forth on Schedule 8.9.

     Section 8.10
Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted
Payments. No Group Member shall incur or otherwise suffer to exist or become effective or
remain liable on or responsible for any Contractual Obligation limiting the ability of (a) any
Subsidiary of the Company to make Restricted Payments to, or Investments in, or
repay Indebtedness or otherwise Sell property to, any Group Member (other than Holdings) or (b) any
Group Member to incur or suffer to exist any Lien upon any property of any Group Member, whether
now owned or hereafter acquired, securing any of its Obligations (including any “equal and ratable”
clause and any similar Contractual Obligation requiring, when a Lien is granted on any property,
another Lien to be granted on such property or any other property),
except, for each of clauses (a)
and (b) above, (x) pursuant to the Note Documents and the Credit Agreement Documents and (y)
limitations on Liens (other than those securing any Obligation) on any property whose acquisition,
repair, improvement or construction is financed by purchase money Indebtedness, Capitalized Lease
Obligations or Permitted Refinancings permitted hereunder in reliance
upon Section 8.1(b) set forth
in the Contractual Obligations governing such Indebtedness, Capitalized Lease Obligations or
Permitted Refinancing or Guaranty Obligations with respect thereto.

     Section 8.11 Modification of Certain Documents. No Group Member shall do any of the
following:

     (a) waive or otherwise modify any term of any Related Document (other than any Credit Agreement
Document or any Executive Services Agreement) or any Constituent Document of, or otherwise change
the capital structure of, any Group Member (including the terms of any of their outstanding Stock
or Stock Equivalents), in each case except for those modifications and waivers that (x) do not
elect, or permit the election, to treat the Stock or Stock Equivalents of any limited liability
company (or similar entity), other than Holdings or the Company, as a security and (y) in the case
of any such Related Document and the Constituent Documents, do not materially adversely affect the
rights and privileges of any Group Member and do not materially adversely affect the interests of
any Secured Party under the Loan Documents or in the Collateral;
provided, however, that, in the
case of the Company, Holdings may not make any election to cause the Stock of the Company to be
designated as anything but a certificated security (within the meaning of Article 8 of the UCC);
provided, further, that each of Holdings and the Company shall be permitted to amend and restate
its limited liability company agreement effective on and as of the Closing Date in the form of (i)
with respect to Holdings, the Amended and Restated Holdings LLC Agreement, and (ii) with respect to
the Company, the Second Amended and Restated Company LLC Agreement, in each case as delivered to,
reviewed and approved by the Purchasers prior to the Closing Date;

     (b) waive
or otherwise modify any term of any Credit Agreement Document, except as permitted by the
Intercreditor Agreement; and

44

 

     (c) waive or otherwise modify any term of an Executive Services Agreement in any manner that would
increase the compensation payable by the Group Members thereunder or that would materially affect
the rights and privileges of any Group Member or that would materially affect the interests of any
Secured Party under the Note Documents or in the Collateral.

     Section 8.12
Accounting Changes; Fiscal Year. No Group Member shall change its (a)
accounting treatment or reporting practices, except as required by GAAP or any Requirement of Law,
or (b) its fiscal year or its method for determining fiscal quarters or fiscal months.

     Section 8.13 Margin Regulations. No Group Member shall use all or any portion of the
proceeds of any credit extended hereunder to purchase or carry margin stock (within the meaning of
Regulation U of the Federal Reserve Board) in contravention of Regulation U of the Federal Reserve
Board.

     Section 8.14 Compliance with ERISA. No ERISA Affiliate shall cause or suffer to exist (a)
any event that could result in the imposition of a Lien with respect to any Title IV Plan or
Multiemployer Plan or (b) any other ERISA Event, that would, in the aggregate, have a Material
Adverse Effect. No Group Member shall cause or suffer to exist any event that could result in the
imposition of a Lien with respect to any Benefit Plan.

     Section 8.15 Hazardous Materials. No Group Member shall cause or suffer to exist any
Release of any Hazardous Material at, to or from any real property owned, leased, subleased or
otherwise operated or occupied by any Group Member that would violate any Environmental Law, form
the basis for any Environmental Liabilities or otherwise adversely affect the value or
marketability of any real property (whether or not owned by any Group Member), other than such
violations, Environmental Liabilities and effects that would not, in the aggregate, have a Material
Adverse Effect.

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

     (a) In connection with the production of any of the first four 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
development and production of any such Film; or

     (b) Greenlight any Film with a Film Budget of greater than $35,000,000.

ARTICLE IX

EVENTS OF DEFAULT

     Section 9.1 Definition. Each of the following shall be an Event of Default:

     (a) the Company shall fail to pay (i) any principal of any Note when the same becomes due and
payable, (ii) any interest on any Note or any fee under any Note Document and, in the case of this
clause (ii) , such non-payment continues for a period of three Business Days after the due date
therefor or (iii) any other Obligation (other than those set forth in  clause (i) or (ii) above)
and, in the case of this  clause (iii), such non-payment continues for a period of five Business
Days following a Holder’s demand for payment therefor; or

45

 

     (b) any representation, warranty or certification made or deemed made by or on behalf of any
Note Party in any Note Document or by or on behalf of any Note Party (or any Responsible Officer
thereof) in connection with any Note Document (including in any document delivered in connection
with any Note Document) shall prove to have been incorrect in any material respect when made or
deemed made; or

     (c) any Note Party shall fail to comply with (i) any provision of Section 6.2(a)(i), 7.1, 7.9,
7.11 or Article VIII, (ii) any provision of Section 6.1, and, in the case of this
clause (ii), such failure shall remain unremedied for three Business Days or more or (iii)
any other provision of any Note Document if, in the case of this clause (iii), such failure
shall remain unremedied for 30 days after the earlier of (A) the date on which a Responsible
Officer of the Company becomes aware of such failure and (B) the date on which notice thereof shall
have been given to the Company by the Collateral Agent or the Required Holders; or

     (d) (i) any Group Member shall fail to make any payment when due (whether due because of scheduled
maturity, required prepayment provisions, acceleration, demand or otherwise) on any Indebtedness of
any Group Member (other than the Obligations) and, in each case, such failure relates to
Indebtedness having a principal amount of $500,000 or more, (ii) any other event shall occur or
condition shall exist under any Contractual Obligation relating to any such Indebtedness, if the
effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity
of such Indebtedness, or (iii) any such Indebtedness shall become or be declared to be due and
payable, or be required to be prepaid, redeemed, defeased or repurchased (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof; or

     (e) (i) any Group Member shall generally not pay its debts as such debts become due, shall admit in
writing its inability to pay its debts generally or shall make a general assignment for the benefit
of creditors, (ii) any proceeding shall be instituted by or against any Group Member seeking to
adjudicate it a bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, composition of it or its debts or any similar order,
in each case under any Requirement of Law relating to bankruptcy, insolvency or reorganization or
relief of debtors or seeking the entry of an order for relief or the appointment of a custodian,
receiver, trustee, conservator, liquidating agent, liquidator, other similar official or other
official with similar powers, in each case for it or for any substantial part of its property and,
in the case of any such proceedings instituted against (but not by or with the consent of) any
Group Member, either such proceedings shall remain undismissed or unstayed for a period of 60 days
or more or any action sought in such proceedings shall occur or (iii) any Group Member shall take
any corporate or similar action or any other action to authorize any action described in clause
(i) or (ii) above; or

     (f) one or more judgments, orders or decrees (or other similar process) shall be rendered against
any Group Member (i)(A) in the case of money judgments, orders and decrees, involving an aggregate
amount (excluding amounts adequately covered by insurance payable to any Group Member, to the
extent the relevant insurer has not denied coverage therefor) in excess of $1,000,000 or (B)
otherwise, that would have, in the aggregate, a Material Adverse Effect and (ii)(A) enforcement
proceedings shall have been commenced by any creditor upon any such judgment, order or decree or
(B) such judgment, order or decree shall not have been vacated or discharged for a period of 30
consecutive days and there shall not be in effect (by reason of a pending appeal or otherwise) any
stay of enforcement thereof; or

     (g) except pursuant to a valid, binding and enforceable termination or release permitted under the
Note Documents and executed by the Collateral Agent or as otherwise expressly permitted under any
Note Document, (i) any Note Document or any material provision thereof shall at any time after the
delivery of such Note Document, fail to be valid and binding on, or enforceable against, any

46

 

Note Party party thereto, (ii) any Note Document purporting to grant a Lien to secure any
Obligation shall, at any time after the delivery of such Note Document, fail to create a valid and
enforceable Lien on any Collateral with a fair market value, individually or in the aggregate, in
excess of $500,000 or such Lien shall fail or cease to be a perfected Lien with respect to such
Collateral with the priority required in the relevant Note Document, or any Group Member shall
state in writing that any of the events described in clause (i) or (ii) above shall
have occurred; or

     (h) there shall occur any Change of Control.

     Section 9.2 Remedies. During the continuance of any Event of Default, but subject to the
terms of the Intercreditor Agreement, the Collateral Agent may, and, at the request of the Required
Holders, shall, in each case by notice to the Company and in addition to any other right or remedy
provided under any Note Document or by any applicable Requirement of Law, declare immediately due
and payable all or part of any Obligation (including any accrued but unpaid interest thereon),
whereupon the same shall become immediately due and payable, without presentment, demand, protest
or further notice or other requirements of any kind, all of which are hereby expressly waived (to
the maximum extent permitted by applicable law) by Holdings and the Company (and, to the extent
provided in any other Note Document, other Note Parties) and may cause the Collateral Agent to
enforce any and all rights and remedies created pursuant to the Security Documents, including,
without limitation, exercising any rights under the UCC or other applicable law; provided,
however, that, effective immediately upon the occurrence of the Events of Default specified
in Section 9.1(e)(ii), each Obligation (including in each case any accrued all accrued but
unpaid interest thereon) shall automatically become and be due and payable, without presentment,
demand, protest or further notice or other requirement of any kind, all of which are hereby
expressly waived (to the maximum extent permitted by applicable law) by Holdings and the Company
(and, to the extent provided in any other Note Document, any other Note Party).

     Section 9.3 Quiet Enjoyment. (a) The Collateral Agent and the Holders acknowledge
and agree that the security interests created by the Security Documents are subject to the rights
of Quiet Enjoyment (as defined below) of parties (which are not Affiliates of any Note Party) to
distribution contracts, whether existing on the date hereof or hereafter executed. For the purpose
hereof, “Quiet Enjoyment” shall mean in connection with the rights of a licensee (which is
not an Affiliate of any Note Party) under a distribution contract, the agreement of the Collateral
Agent and the Holders that their rights under this Agreement and the other Note Documents and in
the Collateral are subject to the rights of such licensee to distribute, exhibit and/or to exploit
the Film licensed to them under such distribution contract, and to receive prints or tapes and
other delivery items or have access to preprint material or master tapes and other items to which
they are entitled in connection therewith and that even if the Holders shall become the owner of
the Collateral in case of an Event of Default, the Holders’ ownership rights shall be subject to
the rights of said parties under such distribution contract; provided, that such licensee
shall not be in default under the relevant distribution contract. The Collateral Agent agrees that,
upon the reasonable request of a Note Party, it will provide written confirmation (in a form
reasonably acceptable to the Collateral Agent) of such rights of Quiet Enjoyment to licensees under
the distribution contracts. None of the foregoing constitutes an agreement by the Collateral Agent
or the Holders to the granting of any security interest to any Person under any distribution
contract, except as otherwise permitted hereunder.

     (b) The provisions of this Section 9.3 are solely for the benefit of the Company, and no
distributor, licensee or other counterparty to any distribution contract shall have any rights as a
third party beneficiary of, or be entitled to rely in any respect upon, the provisions of this
Section 9.3.

47

 

ARTICLE X

THE COLLATERAL AGENT

     Section 10.1 Appointment and Duties. (a) Appointment of Collateral Agent. Each
Holder hereby appoints GE Capital (together with any successor Collateral Agent pursuant to
Section 10.9) as the Collateral Agent hereunder and authorizes the Collateral Agent to (i)
execute and deliver the Security Documents and accept delivery thereof on its behalf from any Group
Member, (ii) take such action on its behalf and to exercise all rights, powers and remedies and
perform the duties as are expressly delegated to the Collateral Agent under such Security Documents
and (iii) exercise such powers as are reasonably incidental thereto. Each Holder hereby authorizes
the Collateral Agent (I) to enter into (A) the Intercreditor Agreement and each other document or
instrument referred to therein that the Collateral Agent may be required to execute and deliver,
(B) any intercreditor, interparty and/or subordination agreements on terms acceptable to the
Collateral Agent with (w) the unions and/or the guilds with respect to the security interests in
favor of such unions and/or guilds required pursuant to the terms of collective bargaining
agreements, (x) distributors or licensees of a Note Party having rights to any Film, (y) Persons
providing any services in connection with any Film and (z) Persons providing tax benefit and/or
production subsidies for any Film and (II) to confirm in writing the right of Quiet Enjoyment of
licensees pursuant to the terms of Section 9.3.

     (b) Duties as Collateral and Disbursing Agent. Without limiting the generality of
clause (a) above, the Collateral Agent shall have the sole and exclusive right and
authority (to the exclusion of the Holders), and is hereby authorized, to (i) file and prove claims
and file other documents necessary or desirable to allow the claims of the Secured Parties with
respect to any Obligation in any proceeding described in Section 9.1(e)(ii) or any
other bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on
behalf of such Secured Party), (ii) act as collateral agent for each Secured Party for purposes of
the perfection of all Liens created by such agreements and all other purposes stated therein, (iii)
manage, supervise and otherwise deal with the Collateral, (iv) take such other action as is
necessary or desirable to maintain the perfection and priority of the Liens created or purported to
be created by the Security Documents, (v) except as may be otherwise specified in any Note
Document, exercise all remedies given to the Collateral Agent and the other Secured Parties with
respect to the Collateral, whether under the Security Documents, applicable Requirements of Law or
otherwise and (vi) execute any amendment, consent or waiver under the Security Documents on behalf
of any Holder that has consented in writing to such amendment, consent or waiver; provided,
however, that the Collateral Agent hereby appoints, authorizes and directs each Holder to
act as collateral sub-agent for the Collateral Agent and the Holders for purposes of the perfection
of all Liens with respect to the Collateral, including any deposit account maintained by a Note
Party with, and cash and Cash Equivalents held by, such Holder, and may further authorize and
direct the Holders to take further actions as collateral sub-agents for purposes of enforcing such
Liens or otherwise to transfer the Collateral subject thereto to the Collateral Agent, and each
Holder hereby agrees to take such further actions to the extent, and only to the extent, so
authorized and directed.

     (c) Limited Duties. Under the Note Documents, the Collateral Agent (i) is acting solely on
behalf of the Holders, with duties that are entirely administrative in nature, notwithstanding the
use of the defined term “Collateral Agent”, the terms “agent” and “collateral agent” and similar
terms in any Note Document to refer to the Collateral Agent, which terms are used for title
purposes only, (ii) is not assuming any obligation under any Note Document other than as expressly
set forth therein or any role as agent, fiduciary or trustee of or for any agent, Holder or any
other Secured Party and (iii) shall have no implied functions, responsibilities, duties,
obligations or other liabilities under any Note Document, and

48

 

each Holder hereby waives and agrees not to assert any claim against the Collateral Agent based on
the roles, duties and legal relationships expressly disclaimed in clauses (i) through (iii)
above.

     Section 10.2 Binding Effect. Each Holder agrees that (i) any action taken by the
Collateral Agent or the Required Holders (or, if expressly required hereby, a greater proportion of
the Holders) in accordance with the provisions of the Note Documents, (ii) any action taken by the
Collateral Agent in reliance upon the instructions of Required Holders (or, where so required, such
greater proportion) and (iii) the exercise by the Collateral Agent or the Required Holders (or,
where so required, such greater proportion) of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be authorized and binding upon
all of the Secured Parties.

     Section 10.3 Use of Discretion. (a) No Action without Instructions. The Collateral
Agent shall not be required to exercise any discretion or take, or omit to take, any action,
including with respect to enforcement or collection, except any action it is required to take or
omit to take (i) under any Note Document or (ii) pursuant to instructions from the Required Holders
(or, where expressly required by the terms of this Agreement, a greater proportion of the Holders).

     (b) Right Not to Follow Certain Instructions. Notwithstanding clause (a) above, the
Collateral Agent shall not be required to take, or omit to take, any action (i) unless, upon
demand, the Collateral Agent receives an indemnification satisfactory to it from the Holders (or,
to the extent applicable and acceptable to the Collateral Agent, any other Secured Party) against
all Liabilities that, by reason of such action or omission, may be imposed on, incurred by or
asserted against the Collateral Agent or any Related Person thereof or (ii) that is, in the opinion
of the Collateral Agent or counsel thereto, contrary to any Note Document or applicable Requirement
of Law.

     Section 10.4 Delegation of Rights and Duties. The Collateral Agent may, upon any term or
condition it specifies, delegate or exercise any of its rights, powers and remedies under, and
delegate or perform any of its duties or any other action with respect to, any Note Document by or
through any trustee, co-agent, employee, attorney-in-fact and any other Person (including any
Secured Party). Any such Person shall benefit from this Article X to the extent provided by the
Collateral Agent.

     Section 10.5 Reliance and Liability. (a) The Collateral Agent may, without incurring any
liability hereunder, (i) treat the payee of any Note as its holder until such Note has been
assigned in accordance with Section 11.2 and written notice thereof provided to the
Collateral Agent, (ii) consult with any of its Related Persons and, whether or not selected by it,
any other advisors, accountants and other experts (including advisors to, and accountants and
experts engaged by, any Note Party) and (iii) rely and act upon any document and information
(including those transmitted by Electronic Transmission) and any telephone message or conversation,
in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the
appropriate parties.

     (b) Neither the Collateral Agent nor the Related Persons thereof shall be liable for any action
taken or omitted to be taken by any of them under or in connection with any Note Document, and each
Holder, Holdings and the Company hereby waives and shall not assert (and Holdings and the Company
shall cause each other Note Party to waive and agree not to assert) any right, claim or cause of
action based thereon, except to the extent of liabilities resulting from the gross negligence or
willful misconduct of the Collateral Agent or such Related Person (each as determined in a final,
non-appealable judgment by a court of competent jurisdiction) in connection with the duties
expressly set forth herein. Without limiting the foregoing, the Collateral Agent:

     (i) shall not be responsible or otherwise incur liability for any action or omission taken in
reliance upon the instructions of the Required Holders or for the actions or omissions of

49

 

any of its Related Persons selected with reasonable care (other than employees, officers and
directors of the Collateral Agent when acting on behalf of the Collateral Agent);

     (ii) shall not be responsible to any Secured Party for the due execution, legality, validity,
enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection
or priority of any Lien created or purported to be created under or in connection with, any Note
Document;

     (iii) makes no warranty or representation and shall not be responsible, to any Secured Party for
any statement, document, information, representation or warranty made or furnished by or on behalf
of any Related Person or any Note Party in connection with any Note Document or any transaction
contemplated therein or any other document or information with respect to any Note Party, whether
or not transmitted or (except for documents expressly required under any Note Document to be
transmitted to the Holders) omitted to be transmitted by the Collateral Agent, including as to
completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due
diligence performed by the Collateral Agent in connection with the Note Documents; and

     (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any
provision of any Note Document, whether any condition set forth in any Note Document is satisfied
or waived, as to the financial condition of any Note Party or as to the existence or continuation
or possible occurrence or continuation of any Default or Event of Default or shall be deemed to
have notice or knowledge of such occurrence or continuation unless it has received a notice from
the Company or any Holder describing such Default or Event of Default clearly labeled “notice of
default” (in which case the Collateral Agent shall promptly give notice of such receipt to all
Holders);

and, for each of the items set forth in clauses (i) through (iv) above, each Holder,
Holdings and the Company hereby waives and agrees not to assert (and Holdings and the Company shall cause each other
Note Party to waive and agree not to assert) any right, claim or cause of action it might have
against the Collateral Agent based thereon.

     Section 10.6 Acting Individually. The Collateral Agent and each of its Affiliates may make
loans and other extensions of credit to, acquire Stock and Stock Equivalents of, or engage in any
kind of business with, any Note Party or Affiliate thereof as though it were not acting as
Collateral Agent and may receive separate fees and other payments therefor. To the extent the Collateral Agent or any
Affiliate thereof purchases a Note or otherwise becomes a Holder hereunder, it shall have and may
exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities as
any other Holder and the terms “Holder” and “Required Holder” and any similar terms shall, except
where otherwise expressly provided in any Note Document, include, without limitation, the Collateral
Agent or such Affiliate, as the case may be, in its individual capacity as a Holder or as one of
the Required Holders, respectively.

     Section 10.7 Credit Decisions. Each Holder acknowledges that it shall, independently and
without reliance upon the Collateral Agent, any other Holder or any of their Related Persons or
upon any document (including the Disclosure Documents) solely or in part because such document was
transmitted by the Collateral Agent or any of its Related Persons, conduct its own independent
investigation of the financial condition and affairs of each Note Party and make and continue to
make its own credit decisions in connection with entering into, and taking or not taking any action
under, any Note Document or with respect to any transaction contemplated in any Note Document, in
each case based on such documents and information as it shall deem appropriate. Except for
documents expressly required by any Note

50

 

Document to be transmitted by the Collateral Agent to the Holders, the Collateral Agent shall not
have any duty or responsibility to provide any Holder with any credit or other information
concerning the business, prospects, operations, property, financial and other condition or
creditworthiness of any Note Party or any Affiliate of any Note Party that may come into the
possession of the Collateral Agent or any of its Related Persons.

     Section 10.8 Expenses; Indemnities. (a) Each Holder agrees to reimburse the Collateral Agent
and each of its Related Persons (to the extent not reimbursed by any Note Party) promptly upon
demand for such Holder’s Pro Rata Share of any costs and expenses (including fees, charges and
disbursements of financial, legal and other advisors paid in the name of, or on behalf of, any Note
Party) that may be incurred by the Collateral Agent or any of its Related Persons in connection
with the preparation, syndication, execution, delivery, administration, modification, consent,
waiver or enforcement (whether through negotiations, through any work-out, bankruptcy,
restructuring or other legal or other proceeding or otherwise) of, or legal advice in respect of
its rights or responsibilities under, any Note Document.

     (b) Each Holder further agrees to indemnify the Collateral Agent and each of its Related Persons
(to the extent not reimbursed by any Note Party), from and against such Holder’s aggregate Pro Rata
Share of the Liabilities that may be imposed on, incurred by or asserted against the Collateral
Agent or any of its Related Persons in any matter relating to or arising out of, in connection with
or as a result of any Note Document, any Related Document or any other act, event or transaction
related, contemplated in or attendant to any such document, or, in each case, any action taken or
omitted to be taken by the Collateral Agent or any of its Related Persons under or with respect to
any of the foregoing (including, without limitation, any indemnification liability that the
Collateral Agent may incur in connection with any control agreement or other document executed by
the Collateral Agent in connection with the transactions contemplated hereby); provided,
however, that no Holder shall be liable to the Collateral Agent or any of its Related
Persons to the extent such liability has resulted from the gross negligence or willful misconduct
of the Collateral Agent or its Related Person, as applicable, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order.

     Section 10.9 Resignation of Collateral Agent. (a) The Collateral Agent may resign at any
time by delivering not less than 30 days prior written notice of such resignation to the Holders
and the Company, effective on the date set forth in such notice or, if not such date is set forth
therein, upon the date such notice shall be effective. If the Collateral Agent delivers any such
notice, the Required Holders shall have the right to appoint a successor Collateral Agent. If,
within 30 days after the retiring Collateral Agent having given notice of resignation, no successor
Collateral Agent has been appointed by the Required Holders that have accepted such appointment,
then the retiring Collateral Agent may, on behalf of the Holders, appoint a successor Collateral
Agent from among the Holders. Each appointment under this clause (a) shall be subject to the prior
consent of the Company, which may not be unreasonably withheld but shall not be required during the
occurrence and continuance of a Default or Event of Default.

     (b) Effective immediately upon its resignation, (i) the retiring Collateral Agent shall be
discharged from its duties and obligations under the Note Documents, (ii) the Holders shall assume
and perform all of the duties of the Collateral Agent until a successor Collateral Agent shall have
accepted a valid appointment hereunder, (iii) the retiring Collateral Agent and its Related Persons
shall no longer have the benefit of any provision of any Note Document other than with respect to
any actions taken or omitted to be taken while such retiring Collateral Agent was, or because such
Collateral Agent had been, validly acting as Collateral Agent under the Note Documents and (iv)
subject to its rights under Section 10.3, the retiring Collateral Agent shall take such action as
may be reasonably necessary to assign to the successor Collateral Agent its rights as Collateral
Agent under the Note Documents. Effective immediately upon its acceptance of a valid appointment as
Collateral Agent a successor Collateral Agent

51

 

shall succeed to, and become vested with, all the rights, powers, privileges and duties of the
retiring Collateral Agent under the Note Documents.

     Section 10.10 Release of Collateral or Guarantors. Each Holder hereby consents to the
release and hereby directs the Collateral Agent to release (or, in the case of clause (b)(ii)
below, release or subordinate) the following:

     (a) any Subsidiary of the Company from its guaranty of any Obligation of any Note Party if all of
the Securities of such Subsidiary owned by any Group Member are Sold in a Sale permitted under the
Note Documents (including pursuant to a waiver or consent), to the extent that, after giving effect
to such Sale, such Subsidiary would not be required to guaranty any Obligations pursuant to
Section 7.10; and

     (b) any Lien held by the Collateral Agent for the benefit of the Secured Parties against (i) any
Collateral that is Sold by a Note Party in a Sale permitted by the Note Documents (including
pursuant to a valid waiver or consent), (ii) any property subject to a Lien permitted hereunder in
reliance upon Section 8.2(d) or (e) and (iii) all of the Collateral and all Note
Parties, upon payment and satisfaction in full of the entire outstanding principal amount of Notes
and all other Obligations that the Collateral Agent has been notified in writing are then due and
payable and deposit of cash collateral with respect to all contingent Obligations, in amounts and
on terms and conditions and with parties satisfactory to the Collateral Agent and each Indemnitee
that is owed such Obligations.

Each Holder hereby directs the Collateral Agent, and the Collateral Agent hereby agrees, upon
receipt of reasonable advance notice from the Company, to execute and deliver or file such
documents and to perform other actions reasonably necessary to release the guaranties and Liens
when and as directed in this Section 10.10.

     Section 10.11 Additional Secured Parties. The benefit of the provisions of the Note
Documents directly relating to the Collateral or any Lien granted thereunder shall extend to and be
available to any Secured Party that is not a Holder as long as, by accepting such benefits, such
Secured Party agrees, as among the Collateral Agent and all other Secured Parties, that such
Secured Party is bound by (and, if requested by the Collateral Agent, shall confirm such agreement
in a writing in form and substance acceptable to the Collateral Agent) this Article X,
Section 11.8, Section 11.9 and Section 11.20 and the decisions and actions
of the Collateral Agent and the Required Holders (or, where expressly required by the terms of this
Agreement, a greater proportion of the Holders) to the same extent a Holder is bound;
provided, however, that, notwithstanding the foregoing, (a) such Secured Party
shall be bound by Section 10.8 only to the extent of Liabilities, costs and expenses with
respect to or otherwise relating to the Collateral held for the benefit of such Secured Party, in
which case the obligations of such Secured Party thereunder shall not be limited by any concept of
Pro Rata Share or similar concept, (b) each of the Collateral Agent and the Holders shall be
entitled to act at its sole discretion, without regard to the interest of such Secured Party,
regardless of whether any Obligation to such Secured Party thereafter remains outstanding, is
deprived of the benefit of the Collateral, becomes unsecured or is otherwise affected or put in
jeopardy thereby, and without any duty or liability to such Secured Party or any such Obligation
and (c) such Secured Party shall not have any right to be notified of, consent to, direct, require
or be heard with respect to, any action taken or omitted in respect of the Collateral or under any
Note Document.

52

 

ARTICLE XI

MISCELLANEOUS

     Section 11.1
Amendments, Waivers, Etc. (a) The Company may amend or waive any provision of
this Agreement, the Notes, or any other Note Document with the written consent of the Required
Holders, except that an amendment or waiver may not, without the consent of Holders of one hundred
percent (100%) of the outstanding principal amount of all Notes:

     (i) reduce (including through release, forgiveness, assignment or otherwise) (A) the principal
amount of, the interest rate on, or any obligation of the Company to repay (whether or not on a
fixed date), the outstanding principal balance of any Note or (B) any fee or accrued interest
payable to such Holder;

     (ii) waive or postpone the Scheduled Maturity Date or other scheduled date fixed for the payment,
in whole or in part, of principal of or interest on any Note or fee owing to such Holder;

     (iii) except as provided in Section 10.10, release all or substantially all of the
Collateral or any Guarantor from its guaranty of any Obligation of the Company;

     (iv) reduce or increase the proportion of Holders required for the Holders (or any subset thereof)
to take any action hereunder or change the definition of the terms “Required Holders” or “Pro Rata
Share”; or

     (vii) amend Section 10.10, Section 11.9 or this Section 11.1;

and provided, further, that (x) no amendment, waiver or consent shall affect the
rights or duties under any Note Document of, or any payment to, the Collateral Agent (or otherwise
modify any provision of Article X or the application thereof) unless in writing and
signed by the Collateral Agent, in addition to any signature otherwise required and (y) any
amendment or waiver of the Warrants shall require the consent of the holders of Warrants
representing more than 50% of the Class C Units into which the Warrants are exercisable.

     (b) After an amendment under this Section becomes effective, the Company shall mail to each of the
Holders of Notes a notice briefly describing such amendment. The failure to give such notice to all
Holders of Notes, or any defect therein, shall not impair or affect the validity of an amendment
under this
 Section.

     (c) Each waiver or consent under any Note Document shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on any Note Party shall
entitle any Note Party to any notice or demand in the same, similar or other circumstances. No
failure on the part of any Secured Party to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any other right.

     (d) Any amendment to, or waiver of, any Note Document shall become effective in accordance with its
terms when executed and delivered by the Company provided that the Company has received the
requisite consents prior thereto. The Company shall not be obligated to execute any such amendment
or waiver regardless of whether such consents have been received. A consent to an amendment or a
waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or
portion of the Note that evidences the same Indebtedness as the consenting Holder’s Note, even if
notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent
Holder may revoke the consent or waiver as to such Holder’s Note or portion of the Note if the
Company

53

 

receives the notice of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Holder of a Note.

     (e) The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders of Notes entitled to give their consent or take any other action described
above or required or permitted to be taken pursuant to this Agreement. If a record date is fixed,
then, notwithstanding the immediately preceding paragraph, those persons who were Holders of Notes
at such record date (or their duly designated proxies), and only those persons, shall be entitled
to give such consent or to revoke any consent previously given or to take any such action, whether
or not such Persons continue to be Holders after such record date. No such consent shall be valid
or effective for more than 120 days after such record date.

     (f) If an amendment changes the terms of a Note or Warrant, the Company may require the Holder of
the Note or Warrant to deliver it to the Company. The Company may place an appropriate notation on
the Note or Warrant, as the case may be, regarding the changed terms and return it to the Holder.
Alternatively, if the Company so determines, the Company in exchange for the Note or Warrant shall
issue a new Note or Warrant, as the case may be, that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Note or Warrant shall not affect the validity of such
amendment.

     (g) Neither the Company, any Affiliate of the Company nor any of its Subsidiaries shall, directly
or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of any Note Document unless such consideration is offered to be paid or agreed
to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.

     Section 11.2 Registration and Transfer of Notes. (a) The Company shall keep at its
principal executive office a register for the registration and registration of transfers of Notes.
The name and address of each holder of one or more Notes, each transfer thereof and the name and
address of each transferee of one or more Notes shall be registered in such register. Prior to due
presentment for registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the
Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.

     (b) Upon surrender of any Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered holder of such Note
or his attorney duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and deliver, at the Company’s
expense (except as provided below), one or more new Notes (as requested by the holder thereof) in
exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note and shall reflect in the registry referred to in the preceding clause (a)
the transferee, if any, of such Note (and shall transmit evidence of same to the former and new
Holder). Each such new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit A hereto. Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon. The Company may require
payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any
such transfer of Notes. Notes shall not be transferred in denominations of less

54

 

than $1,000,000, provided that if necessary to enable the registration of transfer by a holder of
its entire holding of Notes, one Note may be in a denomination of less than $1,000,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall
be deemed to have made the representations and warranties set forth in Article XII.

     (c) Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note, and

     (i) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided
that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of
a Note with a minimum net worth of at least $100,000,000, such Person’s own unsecured agreement of
indemnity shall be deemed to be satisfactory), or

     (ii) in the case of mutilation, upon surrender and cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and
bearing interest from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if
no interest shall have been paid thereon.

     Section 11.3 Costs and Expenses. Any action taken by any Note Party under or with respect
to any Note Document, even if required under any Note Document or at the request of any Secured
Party, shall be at the expense of such Note Party, and no Secured Party shall be required under any
Note Document to reimburse any Note Party or Group Member therefor except as expressly provided
therein. In addition, the Company agrees to pay or reimburse upon demand (a) the Collateral Agent
for all reasonable out-of-pocket costs and expenses incurred by it or any of their respective
Related Persons in connection with the investigation, development, preparation, negotiation,
syndication, execution, interpretation or administration of, any modification of any term of or
termination of, any Note Document, any commitment or proposal letter therefor, any other document
prepared in connection therewith or the consummation and administration of any transaction
contemplated therein (including periodic audits in connection therewith and environmental audits
and assessments), in each case including the reasonable fees, charges and disbursements of external
legal counsel to the Collateral Agent or such Related Persons, fees, costs and expenses incurred in
connection with Intralinks® or any other E-System and allocated to the transactions contemplated
hereby by the Collateral Agent in its reasonable discretion and reasonable fees, charges and
disbursements of the auditors, appraisers, printers and other of their Related Persons retained by
or on behalf of any of them or any of their Related Persons, (b) the Collateral Agent for all
reasonable costs and expenses incurred by it or any of its Related Persons in connection with
internal audit reviews, field examinations, and Collateral examinations (which shall be reimbursed,
in addition to the out-of-pocket costs and expenses of such examiners, at the per diem rate per
individual charged by the Collateral Agent for its examiners) or incurred in connection with the
retention of any consultants contemplated hereby and (c) each of the Collateral Agent, its Related
Persons, and each Holder for all costs and expenses incurred in connection with (i) any refinancing
or restructuring of the credit arrangements provided hereunder in the nature of a “work-out”, (ii)
the enforcement or preservation of any right or remedy under any Note Document, any Obligation,
with respect to the Collateral or any other related right or remedy, (iii) any indemnification
liability that the Collateral Agent may incur in connection with any control agreement or other
document executed by the Collateral Agent in connection with the transactions contemplated hereby
or (iv) the commencement, defense, conduct of, intervention in, or the taking of any other action
with respect to, any proceeding (including any bankruptcy or insolvency proceeding) related to any
Group Member, Note Document, Obligation or Related Transaction (or the response to and preparation
for any subpoena or request for document production relating thereto), including fees and
disbursements of counsel; provided, that in the case of the reimbursement of fees, costs

55

 

and expenses of counsel for Secured Parties, other than the Collateral Agent, such reimbursement
shall be limited to one counsel for all such Secured Parties for so long as no Event of Default has
occurred and is continuing; provided, further, that no Note Party shall be required to so reimburse
any Secured Party for any fees, costs or expenses incurred in connection with a dispute against
another Secured Party based on the action or inaction of such other Secured Party and that in any
case is not caused by any action or inaction of any Note Party.

     Section 11.4 Indemnities. (a) The Company agrees to indemnify, hold harmless and defend
the Collateral Agent, each Holder, each holder of a Warrant and each of their respective Related
Persons (each such Person being an “Indemnitee”) from and against all Liabilities (including
brokerage commissions, fees and other compensation) that may be imposed on, incurred by or asserted
against any such Indenmitee in any matter relating to or arising out of, in connection with or as a
result of (i) any Warrant, any Note Document, any Related Document, any Disclosure Document, any
Obligation (or the repayment thereof), the use or intended use of the proceeds from the issuance
and sale of the Notes and Warrants, any Related Transaction, or any securities filing of, or with
respect to, any Group Member (including, without limitation, any indemnification liability that the
Collateral Agent may incur in connection with any control agreement or other document executed by
the Collateral Agent in connection with the transactions contemplated hereby), (ii) any commitment
letter, proposal letter or term sheet with any Person or any Contractual Obligation, arrangement or
understanding with any broker, finder or consultant, in each case entered into by or on behalf of
any Group Member or any Affiliate of any of them in connection with any of the foregoing and any
Contractual Obligation entered into in connection with any E-Systems or other Electronic
Transmissions, (iii) any actual or prospective investigation, litigation or other proceeding,
whether or not brought by any such Indemnitee or any of its Related Persons, any holders of
Securities or creditors (and including attorneys’ fees in any case), whether or not any such
Indemnitee, Related Person, holder or creditor is a party thereto, and whether or not based on any
securities or commercial law or regulation or any other Requirement of Law or theory thereof,
including common law, equity, contract, tort or otherwise, or (iv) any other act, event or
transaction related, contemplated in or attendant to any of the foregoing (collectively, the
“Indemnified Matters”); provided, however, that the Company shall not have
any liability under this Section 11.4 to any Indemnitee with respect to any Indemnified
Matter, and no Indemnitee shall have any liability with respect to any Indemnified Matter other
than (to the extent otherwise liable), to the extent such liability has resulted from the gross
negligence or willful misconduct of such Indemnitee, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order; provided, further, that
no Note Party shall be liable for any indemnification to any Indemnitee to the extent any suit,
action, proceeding, claim, damage, loss, liability or expense arises in connection with a dispute
against another Secured Party based on the action or inaction of such other Secured Party and that
in any case is not caused by any action or inaction of any Note Party. Furthermore, each of
Holdings and the Company waives and agrees not to assert against any Indenmitee, and shall cause
each other Note Party to waive and not assert against any Indemnitee, any right of contribution
with respect to any Liabilities that may be imposed on, incurred by or asserted against any Related
Person.

     (b) Without limiting the foregoing, “Indemnified Matters” includes all Environmental
Liabilities, including those arising from, or otherwise involving, any property of any Related
Person or any actual, alleged or prospective damage to property or natural resources or harm or
injury alleged to have resulted from any Release of Hazardous Materials on, upon or into such
property or natural resource or any property on or contiguous to any real property of any Related
Person, whether or not, with respect to any such Environmental Liabilities, any Indemnitee is a
mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the successor-in-interest
to any Related Person or the owner, lessee or operator of any property of any Related Person
through any foreclosure action, in each case except to the extent such Environmental Liabilities
(i) are incurred solely following foreclosure by any Secured Party or

56

 

following any Secured Party having become the successor-in-interest to any Note Party and (ii) are
attributable to acts of such Indemnitee.

     Section 11.5 Survival. All representations and warranties made in any Note Document shall
survive and continue in full force and effect until payment in full in cash of the Obligations. Any
indemnification or other protection provided to any Indemnitee pursuant to any Note Document
(including pursuant to Article X, Section 11.3, Section 11.4 or
this Section 11.5) shall (A) survive the payment in full of other Obligations and (B) inure
to the benefit of any Person that at any time held a right thereunder (as an Indemnitee or
otherwise) and, thereafter, its successors and permitted assigns.

     Section 11.6 Limitation of Liability for Certain Damages. In no event shall any Indemnitee
be liable on any theory of liability for any special, indirect, consequential or punitive damages
(including any loss of profits, business or anticipated savings). Each of Holdings and the Company
hereby waives, releases and agrees (and shall cause each other Note Party to waive, release and
agree) not to sue upon any such claim for any special, indirect, consequential or punitive damages,
whether or not accrued and whether or not known or suspected to exist in its favor.

     Section 11.7 Lender-Creditor Relationship. The relationship between the Holders and the
Collateral Agent, on the one hand, and the Note Parties, on the other hand, is solely that of
lender and creditor. No Secured Party has any fiduciary relationship or duty to any Note Party
arising out of or in connection with, and there is no agency, tenancy or joint venture relationship
between the Secured Parties and the Note Parties by virtue of, any Note Document or any transaction
contemplated therein.

     Section 11.8 Right of Setoff. Each of the Collateral Agent, each Holder and each Affiliate
of any of them is hereby authorized, without notice or demand (each of which is hereby waived by
Holdings and the Company), at any time and from time to time during the continuance of any Event of
Default and to the fullest extent permitted by applicable Requirements of Law and the Intercreditor
Agreement, to set off and apply any and all deposits (whether general or special, time or demand,
provisional or final) at any time held and other Indebtedness, claims or other obligations at any
time owing by the Collateral Agent, such Holder or any of their respective Affiliates to or for the
credit or the account of the Company against any Obligation of any Note Party now or hereafter
existing, whether or not any demand was made under any Note Document with respect to such
Obligation and even though such Obligation may be unmatured. Each of the Collateral Agent and each
Holder agrees promptly to notify the Company and the Collateral Agent after any such setoff and
application made by such Holder or its Affiliates; provided, however, that the failure to give such
notice shall not affect the validity of such setoff and application. The rights under this Section
11.8 are in addition to any other rights and remedies (including other rights of setoff) that the
Collateral Agent, the Holders and their Affiliates and other Secured Parties may have.

     Section 11.9 Sharing of Payments, Etc. If any Holder, directly or through an Affiliate or
branch office thereof, obtains any payment of any Obligation of any Note Party (whether voluntary,
involuntary or through the exercise of any right of setoff or the receipt of any Collateral or
“proceeds” (as defined under the applicable UCC) of Collateral) and such payment exceeds the amount
such Holder would have been entitled to receive if all payments had gone to, and been distributed
by, the Collateral Agent in accordance with the provisions of the Note Documents, such Holder shall
purchase for cash from other Secured Parties such participations in their Obligations as necessary
for such Holder to share such excess payment with such Secured Parties to ensure such payment is
applied as though it had been received by the Collateral Agent and distributed pro rata to the
Holders in accordance with their respective Pro Rata Share of the outstanding principal balance of
Notes then outstanding (or, if such application would then be at the discretion of the Company,
applied to repay the Obligations pro rata in accordance with the respective Pro Rata Shares of each
Holder of the outstanding principal balance of Notes then outstanding); provided, however, that (a)
if such payment is rescinded or otherwise recovered

57

 

from such Holder in whole or in part, such purchase shall be rescinded and the purchase price
therefor shall be returned to such Holder without interest and (b) such Holder shall, to the
fullest extent permitted by applicable Requirements of Law, be able to exercise all its rights of
payment (including the right of setoff) with respect to such participation as fully as if such
Holder were the direct creditor of the Company in the amount of such participation.

     Section 11.10 Marshaling; Payments Set Aside. No Secured Party shall be under any
obligation to marshal any property in favor of any Note Party or any other party or against or in
payment of any Obligation. To the extent that any Secured Party receives a payment from the
Company, from the proceeds of the Collateral, from the exercise of its rights of setoff, any
enforcement action or otherwise, and such payment is subsequently, in whole or in part,
invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party, then to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not occurred.

     Section 11.11 Notices. (a) Addresses. All notices, demands, requests, directions
and other communications required or expressly authorized to be made by this Agreement shall,
whether or not specified to be in writing but unless otherwise expressly specified to be given by
any other means, be given in writing and (i) addressed to (A) if to the Company, to The Film
Department LLC, 8439 Sunset Boulevard, 2ndFloor, Hollywood, California 90069, Attention: Mr. Mark Gill
and Mr. Neil Sacker, Tel: 323.785.3700, Fax: 866.311.4894, with copy to Loeb & Loeb LLP, 10100 Santa Monica Boulevard, Suite
2200, Los Angeles, California 90067, Attention: Susan Z. Williams, Esq. and Michael A. Mayerson
Esq., Tel: 310.282.2000, Fax: 310.282.2200, (B) if to the Collateral Agent, to General Electric
Capital Corporation, 2325 Lakeview Parkway, Suite 700, Alpharetta, Georgia 30004, Attention: Greg
Watts, Tel: 678.624.7981, Fax: 678.624.7903, with copy to General Electric Capital Corporation, 201 Merritt
Seven, 4th Floor, Norwalk, Connecticut 06851 Attention: Steve Burke, Tel: 203.956.4152, Fax:
203.956.4547, with copy to General Electric Capital Corporation, 2325 Lakeview Parkway, Suite 700,
Alpharetta, Georgia 30004, Attention: MCE Counsel, Tel: 678.624.7947, Fax: 678.624.7902 and with
copy to Gibson, Dunn & Crutcher LLP, 2029 Century Park East, Los Angeles, California 90067,
Attention: Lawrence J. Ulman, Esq., Tel: 310.552.8500, Fax: 310.551.8741 and (C) otherwise to the party to be
notified at its address specified opposite its name on Schedule I, (ii) solely in the case of
communications to the Holders, posted to Intralinks® (to the extent such system is available and
set up by or at the direction of the Collateral Agent prior to posting) in an appropriate location
by uploading such notice, demand, request, direction or other communication to www.intralinks.com,
faxing it to 866-545-6600 with an appropriate bar-coded fax coversheet or using such other means of
posting to Intralinks® as may be available and reasonably acceptable to the Collateral Agent prior
to such posting, (iii) solely in the case of communications to the Holders, posted to any other
E-System set up by or at the direction of the Collateral Agent in an appropriate location or (iv)
addressed to such other address as shall be notified in writing (A) in the case of the Company and
the Collateral Agent, to the other parties hereto and (B) in the case of all other parties, to the
Company and the Collateral Agent. Transmission by electronic mail (including E-Fax, even if
transmitted to the fax numbers set forth in clause (i) above) shall not be sufficient or effective
to transmit any such notice under this clause (a) unless such transmission is an available means to
post to any E-System.

     (b) Effectiveness. All communications described in clause (a) above and all other notices,
demands, requests and other communications made in connection with this Agreement shall be
effective and be deemed to have been received (i) if delivered by hand, upon personal delivery,
(ii) if delivered by reputable overnight courier service, one Business Day after delivery to such
courier service with all charges prepaid (or charged to the account of the sender) and with receipt
confirmed (by a record of receipt maintained) by such overnight courier, (iii) if delivered by
United States mail, upon the earlier of

58

 

actual receipt and three Business Days after deposit, registered or certified mail, return receipt
requested, with proper postage prepaid, (iv) if delivered by facsimile (other than to post to an
E-System pursuant to clause (a)(ii) or (a)(iii) above), upon sender’s receipt of
confirmation of proper transmission, and (v) solely in the case of communications to the Holders,
if delivered by posting to any E-System, on the later of the date of such posting in an appropriate
location and the date access to such posting is given to the recipient thereof in accordance with
the standard procedures applicable to such E-System; provided, however, that no
communications to the Collateral Agent pursuant to Article X shall be effective until
received by the Collateral Agent; provided, further, that any notice of a Default
or an Event of Default hereunder shall, if given pursuant to clauses (b)(i), (iii), (iv) or
(v) above, also be given in accordance with clause (b)(ii) above.

     Section 11.12 Electronic Transmissions. (a) Authorization. Subject to the
provisions of Section 11.11(a), each of the Collateral Agent, the Company, the Holders, and
each of their Related Persons is authorized (but not required) to transmit, post or otherwise make
or communicate, in its sole discretion, Electronic Transmissions in connection with any Note
Document and the transactions contemplated therein. Each of Holdings and the Company and each
Secured Party hereby acknowledges and agrees, and each of Holdings and the Company shall cause each
other Group Member to acknowledge and agree, that the use of Electronic Transmissions is not
necessarily secure and that there are risks associated with such use, including risks of
interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby
authorizing the transmission of Electronic Transmissions.

     (b) Signatures. Subject to the provisions of Section 11.11(a), (i)(A) no posting to
any E-System shall be denied legal effect merely because it is made electronically, (B) each
E-Signature on any such posting shall be deemed sufficient to satisfy any requirement for a
“signature” and (C) each such posting shall be deemed sufficient to satisfy any requirement for a
“writing”, in each case including pursuant to any Note Document, any applicable provision of any
UCC, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and
National Commerce Act and any substantive or procedural Requirement of Law governing such subject
matter, (ii) each such posting that is not readily capable of bearing either a signature or a
reproduction of a signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such posting, an E-Signature, upon which each Secured Party and Note
Party may rely and assume the authenticity thereof, (iii) each such posting containing a signature,
a reproduction of a signature or an E-Signature shall, for all intents and purposes, have the same
effect and weight as a signed paper original and (iv) each party hereto or beneficiary hereto
agrees not to contest the validity or enforceability of any posting on any E-System or E-Signature
on any such posting under the provisions of any applicable Requirement of Law requiring certain
documents to be in writing or signed; provided, however, that nothing herein shall
limit such party’s or beneficiary’s right to contest whether any posting to any E-System or
E-Signature has been altered after transmission.

     (c) Separate Agreements. All uses of an E-System shall be governed by and subject to, in
addition to Section 11.11 and this Section 11.12, separate terms and conditions
posted or referenced in such E-System and related Contractual Obligations executed by Secured
Parties and Group Members in connection with the use of such E-System.

     (d) Limitation of Liability. All E-Systems and Electronic Transmissions shall be provided
“as is” and “as available”. None of Collateral Agent or any of its Related Persons warrants the
accuracy, adequacy or completeness of any E-Systems or Electronic Transmission, and each disclaims
all liability for errors or omissions therein. No warranty of any kind is made by the Collateral
Agent or any of its Related Persons in connection with any E-Systems or Electronic Transmission,
including any warranty of merchantability, fitness for a particular purpose, non-infringement of
third-party rights or freedom from viruses or other code defects. Each of Holdings, the Company and
each Secured Party agrees (and each of Holdings and the Company shall cause each other Note Party
to agree) that the Collateral Agent has no

59

 

responsibility for maintaining or providing any equipment, software, services or any testing
required in connection with any Electronic Transmission or otherwise required for any E-System.

     Section 11.13 Governing Law. This Agreement, each other Note Document that does not
expressly set forth its applicable law, and the rights and obligations of the parties hereto and
thereto shall be governed by, and construed and interpreted in accordance with, the law of the
State of New York.

     Section 11.14 Jurisdiction. (a) Submission to Jurisdiction. Any legal action or
proceeding with respect to any Note Document may be brought in the courts of the State of New York
located in the City of New York, Borough of Manhattan, or of the United States of America for the
Southern District of New York and, by execution and delivery of this Agreement, each of Holdings
and the Company hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto (and, to the extent
set forth in any other Note Document, each other Note Party) hereby irrevocably waive any
objection, including any objection to the laying of venue or based on the grounds of forum
non convenience, that any of them may now or hereafter have to the bringing of any such
action or proceeding in such jurisdictions.

     (b) Service of Process. Each of Holdings and the Company (and, to the extent set forth in
any other Note Document, each other Note Party) hereby irrevocably waives personal service of any
and all legal process, summons, notices and other documents and other service of process of any
kind and consents to such service in any suit, action or proceeding brought in the United States of
America with respect to or otherwise arising out of or in connection with any Note Document by any
means permitted by applicable Requirements of Law, including by the mailing thereof (by registered
or certified mail, postage prepaid) to the address of Company specified in Section 11.11
(and shall be effective when such mailing shall be effective, as provided therein). Each of
Holdings and the Company (and, to the extent set forth in any other Note Document, each other Note
Party) agrees that a final judgment in any such action 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.

     (c) Non-Exclusive Jurisdiction. Nothing contained in this Section 11.14 shall
affect the right of the Collateral Agent or any Holder to serve process in any other manner
permitted by applicable Requirements of Law or commence legal proceedings or otherwise proceed
against any Note Party in any other jurisdiction.

     Section 11.15 Waiver of Jury Trial. Each party hereto hereby irrevocably waives trial by
jury in any suit, action or proceeding with respect to, or directly or indirectly arising out of,
under or in connection with, any Note Document or the transactions contemplated therein or related
thereto (whether founded in contract, tort or any other theory). Each party hereto (A) certifies
that no other party and no Related Person of any other party has represented, expressly or
otherwise, that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (B) acknowledges that it and the other parties hereto have been induced to
enter into the Note Documents, as applicable, by the mutual waivers and certifications in this
Section 11.15.

     Section 11.16 Severability. Any provision of any Note Document being held illegal,
invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held
illegal, invalid or unenforceable, any other provision of any Note Document or any part of such
provision in any other jurisdiction.

     Section 11.17 Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall constitute one and the same
agreement.

60

 

Signature pages may be detached from multiple separate counterparts and attached to a single
counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or
Electronic Transmission shall be as effective as delivery of a manually executed counterpart
hereof.

     Section 11.18 Entire Agreement. The Note Documents embody the entire agreement of the
parties and supersede all prior agreements and understandings relating to the subject matter
thereof and any prior letter of interest, commitment letter, fee letter, confidentiality and
similar agreements involving any Note Party and any of the Collateral Agent, any Holder or any of
their respective Affiliates relating to a financing of substantially similar form, purpose or
effect. In the event of any conflict between the terms of this Agreement and any other Note
Document, the terms of this Agreement shall govern (unless such terms of such other Note Documents
are necessary to comply with applicable Requirements of Law, in which case such terms shall govern
to the extent necessary to comply therewith).

     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 or of any of its
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 without the prior
consent of GE Capital except to the extent required to do so under applicable Requirements of Law
and then, only after consulting with GE Capital prior thereto.

     Section 11.20 Non-Public Information; Confidentiality. (a) Each Holder acknowledges and
agrees that it may receive material non-public information hereunder concerning the Note Parties
and their Affiliates and Securities and agrees to use such information in compliance with all
relevant policies, procedures and Contractual Obligations and applicable Requirements of Laws
(including United States federal and state security laws and regulations).

     (b) Each Holder and the Collateral Agent agrees to use all reasonable efforts to maintain, in
accordance with its customary practices, the confidentiality of information obtained by it pursuant
to any Note Document and designated in writing by any Note Party as confidential, except that such
information may be disclosed (i) with the Company’s consent, (ii) to Related Persons of such Holder
or the Collateral Agent that are advised of the confidential nature of such information and are
instructed to keep such information confidential, (iii) to the extent such information presently is
or hereafter becomes available to such Holder or the Collateral Agent on a non-confidential basis
from a source other than any Note Party, (iv) to the extent disclosure is required by applicable
Requirements of Law or other legal process or requested or demanded by any Governmental Authority,
(v) to the extent necessary or customary for inclusion in league table measurements or in any
tombstone or other advertising materials (and the Note Parties consent to the publication of such
tombstone or other advertising materials by the Collateral Agent, any Holder or any of their
Related Persons), (vi) to the National Association of Insurance Commissioners or any similar
organization, any examiner or any nationally recognized rating agency or otherwise to the extent
consisting of general portfolio information that does not identify borrowers, (vii) to current or
prospective assignees and to their respective Related Persons, in each case to the extent such
assignees or Related Persons agree to be bound by provisions substantially similar to the
provisions of this Section 11.20 and (viii) in connection with the exercise of any remedy
under any Note Document. In the event of any conflict between the terms of this Section
11.20 and those of any other Contractual Obligation entered into with any Note Party (whether
or not a Note Document), the terms of this Section 11.20 shall govern.

61

 

     Section 11.21 Patriot Act Notice. Each Holder subject to the USA Patriot Act of 2001 (31
U.S.C. 5318 et seq.) hereby notifies the Company that, pursuant to Section 326 thereof, it is
required to obtain, verify and record information that identifies the Company, including the name
and address of the Company and other information allowing such Holder to identify the Company in
accordance with such act.

ARTICLE XII

REPRESENTATIONS OF THE PURCHASERS

     Each Purchaser, severally, represents and warrants to Holdings and the Company as follows:

     Section 12.1 No Registration and Other Investment Matters. (a) Such Purchaser is a QIB with
such knowledge and experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Notes and Warrants.

     (b) Such Purchaser (i) is not acquiring the Notes and Warrants with a view to any distribution
thereof or with any present intention of offering or selling any of the Notes and Warrants in a
transaction that would violate the Securities Act or the securities laws of any State of the United
States or any other applicable jurisdiction and (ii) will be reoffering and reselling the Notes and
Warrants only to QIBs in reliance on the exemption from the registration requirements provided by
Rule 144A under the Securities Act, to a limited number of Accredited Investors that execute and
deliver a letter containing certain representations and agreements in the form attached as
Exhibit H to this Agreement and in offshore transactions meeting the requirements of
Regulation S.

     (c) Such Purchaser agrees that no form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) has been or will be used by such Purchaser or any
of its representatives in connection with the offer and sale of any of the Notes and Warrants
pursuant hereto, including, but not limited to, articles, notices or other communications published
in any newspaper, magazine or similar medium, or broadcast over television or radio, or transmitted
over the internet, or communicated in any seminar or meeting whose attendees have been invited by
any general solicitation or general advertising.

     (d) Such Purchaser further agrees that it will offer to sell the Notes and Warrants only to, and
will solicit offers to buy the Notes and Warrants only from, Eligible Purchasers that such
Purchaser reasonably believes are (i) QIBs, (ii) Accredited Investors who make the representations
contained in, and execute and return to such Purchaser, a certificate in the form of
Exhibit H to this Agreement and (iii) persons outside the United States in offshore
transactions meeting the requirements of Regulation S, in each case, that agree that (A) the Notes
and Warrants purchased by them 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
Securities Act, if applicable) under the Securities Act, as in effect on the date of the transfer
of such Notes or Warrants, only (1) to the Company or Holdings, (2) to a person whom the seller
reasonably believes is a QIB purchasing for its own account or for the account of a QIB in a
transaction meeting the requirements of Rule 144A under the Securities Act, (3) in a transaction
meeting the requirements of Rule 144 under the Securities Act, (4) to an Accredited Investor that,
prior to such transfer, furnishes the Company a signed letter containing certain representations
and agreements relating to the registration of transfer of such Note or Warrant, as the case may be
(the form of which is substantially the same as Exhibit H to this 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 Securities Act, (6)
in accordance with another exemption from the registration requirements of the Securities Act and
based upon an opinion of counsel acceptable to the

62

 

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 and (B) they will deliver to each person to whom such Notes or Warrants or an interest
therein is transferred a notice substantially to the effect of the foregoing.

     (e) No Purchaser nor any of its affiliates or any person acting on its or their behalf has
engaged or will engage in any directed selling efforts within the meaning of Regulation S with
respect to the Notes and Warrants to be sold in reliance on Regulation S.

     (f) The sale of the Notes and Warrants offered and sold by such Purchaser pursuant hereto in
reliance on Regulation S is not part of a plan or scheme to evade the registration provisions of
the Securities Act.

     Section 12.2 Authorization, etc. Each Purchaser has full power and authority to enter into
and perform its obligations under this Agreement. This Agreement has been duly authorized, executed
and delivered on behalf of each Purchaser by a Person authorized to do so and constitutes a valid
and binding obligation of such Purchaser enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other similar laws affecting the rights and remedies of
creditors generally and general principles of equity.

     Section 12.3 ERISA Matters. In connection with its purchase of the Notes and Warrants, none
of the funds being used by such Purchaser to purchase the Notes and Warrants include “plan assets”
as such term is defined in ERISA.

[SIGNATURE PAGES FOLLOW]

63

 

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

	 	 	 	 	 
	 	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 	 
	 	 	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	GE CAPITAL MARKETS, INC., as a Purchaser

 	 
	 	By:  	/s/ Andrew T. Brode
 	 
	 	 	Name:  	Andrew T. Brode
 	 
	 	 	Title:  	MD 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL

CORPORATION, as Collateral Agent

 	 
	 	By:  	/s/ Gerg Watts
 	 
	 	 	Name:  	Gerg Watts          	 
	 	 	Its: Duly Authorized Signatory 	 

 

 

SCHEDULE I

INFORMATION RELATING TO PURCHASERS

	 	 	 	 	 	 	 
	Name and Address of Purchaser	 	Principal Amount of Notes to be Purchased at Closing
	 	 	 
	GE CAPITAL MARKETS, INC.	 	$30,000,000.00	 
	 
	 	 	 	 	 	 
	1. All payments by wire transfer of immediately available
funds to:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	               Deutsche Bank AG	 	 	 	 
	 

	 	               ABA #: 021 000033	 	 	 	 
	 

	 	               Account #: 50280231	 	 	 	 
	 

	 	               Credit to: GE Capital Markets, Inc.	 	 	 	 
	 

	 	               Ref: The Film Department	 	 	 	 
	 
	 	 	 	 	 	 
	with sufficient information to identify the source and application of such funds.	 	 	 	 
	 
	 	 	 	 	 	 
	2. All notices of payments and written confirmations of such wire transfers:	 	 	 	 
	 
	 

	 	Gary Hines	 	 	 	 
	 

	 	Commercial Loan Portfolio Analyst	 	 	 	 
	 

	 	gary.hines@ge.com	 	 	 	 
	 

	 	Telephone: (312) 441-7713	 	 	 	 
	 

	 	Fax: (312) 441-7367	 	 	 	 
	 
	3. Duplicate payment notices and compliance information to:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Stephen Burke	 	 	 	 
	 

	 	Associate	 	 	 	 
	 

	 	stephen.burke@ge.com	 	 	 	 
	 

	 	Telephone: (203) 956-4152	 	 	 	 
	 

	 	Fax: (203) 956-4528	 	 	 	 
	 
	 	 	 	 	 	 
	4. All other communications to:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Stephen Burke	 	 	 	 
	 

	 	Associate	 	 	 	 
	 

	 	stephen.burke@ge.com	 	 	 	 
	 

	 	Telephone: (203) 956-4152	 	 	 	 
	 

	 	Fax: (203) 956-4528	 	 	 	 
	 
	 	 	 	 	 	 
	5. Tax ID Number: 06-1076522	 	 	 	 

 

 

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, so long as no Event of Default shall have occurred and be continuing or would
result therefrom and the conditions to the payment of interest in cash on account of the Notes set
forth in the Note Documents have been satisfied, 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.

 

 

SCHEDULE III

INITIAL OPERATING BUDGET

 

 

THE FILM DEPARTMENT

SUMMARY OF OPERATING EXPENSES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Calendar Year Ended	 	12/31/2007**	 	 	12/31/2008	 	 	12/31/2009	 	 	12/31/2010	 	 	12/31/2011	 	 	4/30/2012	 
	Compensation & Wages
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CEO — Partner
	 	 	500,000	 	 	 	790,000	 	 	 	853,200	 	 	 	921,456	 	 	 	995,172	 	 	 	340,122	 
	Year End Bonus
	 	 	0	 	 	 	20,000	 	 	 	50,000	 	 	 	80,000	 	 	 	150,000	 	 	 	50,000	 
	Deferred Equity
	 	 	100,000	 	 	 	130,000	 	 	 	100,000	 	 	 	70,000	 	 	 	—	 	 	 	—	 
	President & COO — Partner
	 	 	333,333	 	 	 	526,667	 	 	 	568,800	 	 	 	614,304	 	 	 	663,448	 	 	 	226,748	 
	Year End Bonus
	 	 	0	 	 	 	25,000	 	 	 	35,000	 	 	 	57,000	 	 	 	100,000	 	 	 	33,333	 
	Deferred Equity
	 	 	66,667	 	 	 	75,000	 	 	 	65,000	 	 	 	43,000	 	 	 	—	 	 	 	—	 
	President of Production — Partner
	 	 	266,667	 	 	 	421,333	 	 	 	455,040	 	 	 	491,443	 	 	 	530,759	 	 	 	181,399	 
	Year End Bonus
	 	 	0	 	 	 	25,000	 	 	 	45,000	 	 	 	63,000	 	 	 	100,000	 	 	 	33,333	 
	Deferred Equity
	 	 	66,667	 	 	 	75,000	 	 	 	55,000	 	 	 	37,000	 	 	 	—	 	 	 	—	 
	Creative Executive & Assistant to CEO #1
	 	 	33,333	 	 	 	52,000	 	 	 	55,120	 	 	 	58,427	 	 	 	61,933	 	 	 	21,041	 
	Creative Executive & Assistant to CEO #2
	 	 	33,333	 	 	 	62,000	 	 	 	55,120	 	 	 	58,427	 	 	 	61,933	 	 	 	21,041	 
	Assistant to President & COO
	 	 	33,333	 	 	 	62,000	 	 	 	55,120	 	 	 	68,427	 	 	 	61,933	 	 	 	21,041	 
	Assistant to President of Production
	 	 	30,000	 	 	 	46,800	 	 	 	49,608	 	 	 	52,584	 	 	 	55,740	 	 	 	18,937	 
	Executive Vice President of Legal & Business Affairs
	 	 	143,333	 	 	 	225,033	 	 	 	240,786	 	 	 	257,641	 	 	 	275,676	 	 	 	93,940	 
	Assistant to EVP Legal & Business Affairs
	 	 	24,000	 	 	 	37,440	 	 	 	39,686	 	 	 	42,068	 	 	 	44,592	 	 	 	15,150	 
	Vice President of Legal & Business Affairs
	 	 	62,500	 	 	 	154,500	 	 	 	163,770	 	 	 	173,696	 	 	 	184,012	 	 	 	63,124	 
	Assistant to VP of Legal & Business Affairs
	 	 	15,000	 	 	 	37,080	 	 	 	39,305	 	 	 	41,663	 	 	 	44,163	 	 	 	15,150	 
	Paralegal
	 	 	32,083	 	 	 	56,925	 	 	 	60,341	 	 	 	63,961	 	 	 	67,799	 	 	 	23,145	 
	Senior Vice President of Physical Production
	 	 	116,667	 	 	 	183,167	 	 	 	195,988	 	 	 	209,708	 	 	 	224,387	 	 	 	76,463	 
	Assistant to VP of Physical Production
	 	 	33,333	 	 	 	52,000	 	 	 	55,120	 	 	 	58,427	 	 	 	61,933	 	 	 	21,041	 
	Vice President of Production & Finance
	 	 	75,000	 	 	 	154,500	 	 	 	163,770	 	 	 	173,596	 	 	 	184,012	 	 	 	63,124	 
	Assistant to VP of Production & Finance
	 	 	18,000	 	 	 	37,080	 	 	 	39,305	 	 	 	41,663	 	 	 	44,163	 	 	 	15,150	 
	Vice President of Post Production
	 	 	16,667	 	 	 	101,000	 	 	 	107,060	 	 	 	113,484	 	 	 	123,866	 	 	 	42,083	 
	Assistant to VP of Post Production
	 	 	6,000	 	 	 	36,360	 	 	 	38,542	 	 	 	40,854	 	 	 	44,592	 	 	 	15,150	 
	International Delivery Manager
	 	 	0	 	 	 	45,833	 	 	 	52,750	 	 	 	55,915	 	 	 	59,270	 	 	 	19,850	 
	Domestic Delivery Manager
	 	 	0	 	 	 	29,167	 	 	 	51,750	 	 	 	54,855	 	 	 	58,146	 	 	 	19,850	 
	Chief Financial Officer
	 	 	200,000	 	 	 	316,000	 	 	 	341,280	 	 	 	368,582	 	 	 	403,511	 	 	 	146,933	 
	Assistant to CFO
	 	 	24,000	 	 	 	37,440	 	 	 	39,686	 	 	 	42,068	 	 	 	44,592	 	 	 	15,150	 
	Vice President of Finance (Controller/Participations)
	 	 	100,000	 	 	 	157,000	 	 	 	167,990	 	 	 	179,749	 	 	 	205,795	 	 	 	70,128	 
	Assistant to VP of Finance (Controller/Participations)
	 	 	24,000	 	 	 	37,080	 	 	 	37,680	 	 	 	38,520	 	 	 	40,318	 	 	 	13,739	 
	Manager of Accounts Payable
	 	 	24,208	 	 	 	44,052	 	 	 	47,795	 	 	 	50,663	 	 	 	53,703	 	 	 	18,512	 
	Manager of Accounts Receivable
	 	 	0	 	 	 	6,917	 	 	 	41,915	 	 	 	44,430	 	 	 	47,096	 	 	 	16,476	 
	Director of Production & Finance
	 	 	58,333	 	 	 	103,500	 	 	 	110,240	 	 	 	116,293	 	 	 	123,270	 	 	 	42,083	 
	Vice President of Production & Development
	 	 	66,667	 	 	 	104,000	 	 	 	110,240	 	 	 	116,854	 	 	 	123,866	 	 	 	42,083	 
	Assistant to VP and Director of Production & Development
	 	 	24,000	 	 	 	37,440	 	 	 	39,686	 	 	 	42,068	 	 	 	44,592	 	 	 	15,150	 
	Director of Production & Development
	 	 	50,000	 	 	 	78,000	 	 	 	82,680	 	 	 	87,641	 	 	 	92,899	 	 	 	31,562	 
	Receptionist #1
	 	 	20,000	 	 	 	31,200	 	 	 	33,072	 	 	 	35,056	 	 	 	37,160	 	 	 	12,625	 
	Receptionist #2
	 	 	20,000	 	 	 	31,200	 	 	 	33,072	 	 	 	35,056	 	 	 	37,160	 	 	 	12,625	 
	Human Resources & Office Manager
	 	 	34,667	 	 	 	54,080	 	 	 	57,325	 	 	 	60,764	 	 	 	64,410	 	 	 	21,883	 
	Year End Bonuses 5%
	 	 	65,923	 	 	 	119,540	 	 	 	130,290	 	 	 	138,652	 	 	 	148,826	 	 	 	51,211	 
	Pension 2.5%
	 	 	59,295	 	 	 	101,470	 	 	 	110,321	 	 	 	118,256	 	 	 	127,397	 	 	 	43,729	 
	Payroll Taxes (No Taxes w/hld on Pension) 13%
	 	 	179,970	 	 	 	326,343	 	 	 	355,692	 	 	 	378,520	 	 	 	406,295	 	 	 	139,807	 
	Employee Benefits (Not Calc. on Pension or Bonuses) 8%
	 	 	193,476	 	 	 	330,304	 	 	 	358,627	 	 	 	364,020	 	 	 	410,676	 	 	 	141,800	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sub-Total — Compensation & Wages
	 	 	3,150,455	 	 	 	5,356,450	 	 	 	5,787,772	 	 	 	6,169,691	 	 	 	6,609,090	 	 	 	2,265,710	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Marketing & Promotion
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Travel Expense — Allow
	 	 	80,000	 	 	 	120,000	 	 	 	120,000	 	 	 	120,000	 	 	 	120,000	 	 	 	40,000	 
	Hotel/Living
	 	 	80,000	 	 	 	120,000	 	 	 	120,000	 	 	 	120,000	 	 	 	120,000	 	 	 	40,000	 
	Entertainment
	 	 	80,000	 	 	 	120,000	 	 	 	120,000	 	 	 	120,000	 	 	 	120,000	 	 	 	40,000	 
	Publications/Dues/Conferences
	 	 	20,490	 	 	 	18,675	 	 	 	18,675	 	 	 	18,675	 	 	 	18,675	 	 	 	4,973	 
	Publicity
	 	 	45,000	 	 	 	65,000	 	 	 	65,000	 	 	 	60,000	 	 	 	60,000	 	 	 	20,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sub-Total Marketing & Promotion
	 	 	305,490	 	 	 	443,675	 	 	 	443,675	 	 	 	438,675	 	 	 	438,675	 	 	 	144,973	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	International Sales
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Executive Vice President of International Sales
	 	 	175,000	 	 	 	314,000	 	 	 	339,120	 	 	 	366,250	 	 	 	395,550	 	 	 	136,049	 
	Assistant to EVP of International Sales
	 	 	26,250	 	 	 	46,575	 	 	 	49,370	 	 	 	52,332	 	 	 	55,472	 	 	 	18,937	 
	Vice President of International Sales
	 	 	87,500	 	 	 	154,500	 	 	 	163,770	 	 	 	173,596	 	 	 	184,012	 	 	 	63,124	 
	Vice President of International Business & Legal
	 	 	72,917	 	 	 	128,750	 	 	 	136,475	 	 	 	144,664	 	 	 	153,343	 	 	 	52,603	 
	Assistant to VP of International Sales
	 	 	26,250	 	 	 	46,350	 	 	 	49,131	 	 	 	52,079	 	 	 	55,204	 	 	 	18,937	 
	Year End Bonuses 5%
	 	 	68,979	 	 	 	118,809	 	 	 	119,937	 	 	 	121,134	 	 	 	122,402	 	 	 	41,013	 
	Pension 2.5%
	 	 	9,698	 	 	 	17,254	 	 	 	18,447	 	 	 	18,140	 	 	 	24,150	 	 	 	7,241	 
	Payroll Taxes (No Taxes w/hld on Pension) 13%
	 	 	59,396	 	 	 	105,168	 	 	 	111,514	 	 	 	118,307	 	 	 	125,578	 	 	 	42,986	 
	Employee Benefits (Not Calc. on Pension or Bonuses) 8%
	 	 	31,033	 	 	 	55,214	 	 	 	59,029	 	 	 	63,114	 	 	 	67,486	 	 	 	23,172	 
	Travel & Living
	 	 	104,600	 	 	 	143,200	 	 	 	143,200	 	 	 	38,600	 	 	 	—	 	 	 	(429,600	)
	Promotion/Exhibition/Market Costs
	 	 	121,000	 	 	 	198,000	 	 	 	198,000	 	 	 	77,000	 	 	 	—	 	 	 	(594,000	)
	Taxis & Local Transportation
	 	 	6,500	 	 	 	13,500	 	 	 	7,500	 	 	 	7,500	 	 	 	6,000	 	 	 	2,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sub-Total International Sales
	 	 	789,124	 	 	 	1,341,320	 	 	 	1,395,493	 	 	 	1,232,713	 	 	 	1,189,195	 	 	 	(617,537	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Development Expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Development Expenses
	 	 	1,350,000	 	 	 	1,200,000	 	 	 	—	 	 	 	—	 	 	 	(1,650,000	)	 	 	(900,000	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sub-Total — Development Expenses
	 	 	1,350,000	 	 	 	1,200,000	 	 	 	—	 	 	 	—	 	 	 	(1,650,000	)	 	 	(900,000	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Office Expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Office Supplies
	 	 	21,900	 	 	 	20,400	 	 	 	20,400	 	 	 	20,400	 	 	 	20,400	 	 	 	6,800	 
	Office Phone Bill
	 	 	63,750	 	 	 	113,500	 	 	 	114,000	 	 	 	114,000	 	 	 	114,000	 	 	 	38,000	 
	Cellular Phone Bills
	 	 	30,700	 	 	 	57,300	 	 	 	57,600	 	 	 	57,600	 	 	 	57,600	 	 	 	19,200	 
	Internet Service & IT Servicing
	 	 	105,300	 	 	 	180,000	 	 	 	180,000	 	 	 	180,000	 	 	 	180,000	 	 	 	60,000	 
	Messenger Services
	 	 	25,600	 	 	 	38,400	 	 	 	38,400	 	 	 	38,400	 	 	 	38,400	 	 	 	12,800	 
	Office Equipment Leases
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Utilities, Repairs & Maintenance
	 	 	21,100	 	 	 	32,400	 	 	 	32,400	 	 	 	32,400	 	 	 	32,400	 	 	 	10,800	 
	Mlsc Expense Allowance
	 	 	26,700	 	 	 	40,800	 	 	 	40,800	 	 	 	40,800	 	 	 	40,800	 	 	 	13,600	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sub-Total — Office Expenses
	 	 	295,050	 	 	 	482,800	 	 	 	483,600	 	 	 	483,600	 	 	 	483,600	 	 	 	161,200	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Office Rental, Parking and Janltoria
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Rent
	 	 	54,127	 	 	 	303,381	 	 	 	312,482	 	 	 	350,568	 	 	 	360,198	 	 	 	121,840	 
	Cleaning & Maintenance
	 	 	4,000	 	 	 	6,350	 	 	 	6,985	 	 	 	7,260	 	 	 	7,260	 	 	 	2,420	 
	Parking
	 	 	46,270	 	 	 	80,220	 	 	 	82,626	 	 	 	83,641	 	 	 	84,896	 	 	 	28,717	 
	Guest Parking
	 	 	19,200	 	 	 	28,800	 	 	 	30,480	 	 	 	31,680	 	 	 	31,680	 	 	 	10,560	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sub-Total — Office Rental Expense
	 	 	123,597	 	 	 	418,750	 	 	 	432,573	 	 	 	473,150	 	 	 	484,034	 	 	 	163,537	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other Expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Talent Agency Fee
	 	 	70,000	 	 	 	120,000	 	 	 	120,000	 	 	 	120,000	 	 	 	120,000	 	 	 	40,000	 
	Outside Legal and Acct.
	 	 	63,000	 	 	 	108,000	 	 	 	108,000	 	 	 	108,000	 	 	 	108,000	 	 	 	36,000	 
	Insurance (E&O & D&O)
	 	 	63,000	 	 	 	108,000	 	 	 	108,000	 	 	 	108,000	 	 	 	108,000	 	 	 	36,000	 
	Taxis & Local Transportation
	 	 	3,500	 	 	 	6,000	 	 	 	6,000	 	 	 	6,000	 	 	 	6,000	 	 	 	2,000	 
	Start-Up Costs
	 	 	681,449	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sub Total — Other Expenses & Amort
	 	 	880,949	 	 	 	342,000	 	 	 	342,000	 	 	 	342,000	 	 	 	342,000	 	 	 	114,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	State and City Business Taxes
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income Taxes — CA FTB
	 	 	800	 	 	 	6,800	 	 	 	12,500	 	 	 	12,500	 	 	 	12,500	 	 	 	12,500	 
	Income Taxes — LA Business
	 	 	106	 	 	 	32,169	 	 	 	61,134	 	 	 	86,769	 	 	 	89,028	 	 	 	21,056	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sub Total — State and City Bus. Taxes
	 	 	906	 	 	 	38,969	 	 	 	73,634	 	 	 	99,269	 	 	 	101,528	 	 	 	33,556	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Operating Expense
	 	 	6,895,570	 	 	 	9,623,965	 	 	 	8,958,747	 	 	 	9,239,098	 	 	 	7,998,121	 	 	 	1,365,439	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

“Assumes Start of Operations May 1, 2007

Assumes Conclusion of Operations at 20 Quarters on April 30, 2012

As of May 20, 2007

 

Schedule 4.2

to

Securities Purchase Agreement

Consents

     l. With respect to Holdings, authorizing resolutions of its members, Pain Cuit,
Inc. and Sacker Consultants, Inc., pursuant to that certain Unanimous Written Consent of the
Members of The Film Department Holdings LLC.

     2. With respect to the Company, authorizing resolutions of its sole member, The
Film Department Holdings LLC, pursuant to that certain Unanimous Written Consent of the Sole
Member of The Film Department LLC.

 

 

Schedule 4.3

to

Securities Purchase Agreement

Ownership of Holdings, the Company and Subsidiaries

	A.	 	Jurisdiction of Organization; Ownership of Stock.

     l. Holdings.

          a. Jurisdiction of Organization: Delaware.

          b. Ownership of Stock of Holdings: see attached Schedule A.

     2. Company.

          a. Jurisdiction of Organization: Delaware.

          b. Ownership of Stock of Company: see attached Schedule B.

B. Stock Equivalents with Respect to Stock of Holdings: see warrants set forth on
attached Schedule A.

C. Contractual Obligations with Respect to Issuance, Voting, Sale or Pledge of any
Stock or Stock Equivalents:

     l. Holdings.

          a. Amended and Restated Holdings LLC Agreement includes provisions with respect to, and
limitations on, the issuance, voting, sale and pledge of interests as more fully set forth therein.

          b. Executive Services Agreements provide for issuance of Class A Units and Class F — 1 Units and
right of repurchase of such Units as more fully set forth therein.

          c. Class C Warrants.

          d. Class D Warrants.

          e. Class E Warrants.

          f. Subscription Agreements for purchase of membership interests in
Holdings.

          g. Letter dated June l5, 2007, from Holdings to Singer 1995 Family Trust and Singer
Children’s Irrevocable 2002 Trust.

     2. Company.

          a. Second Amended and Restated Company LLC Agreement includes provisions with
respect to, and limitations on, the issuance, voting, sale and pledge of interests as more fully
set forth therein.

 

 

Schedule A

to

Schedule 4.3

Ownership of Stock of Holdings

REGISTER OF MEMBERS AS OF THE CLOSING DATE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Capital	 	 	Units in	 	 	Percentage	 
	Members	 	Notice Address	 	 	Contributions	 	 	Class	 	 	Interest of Class	 
	Class A:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pain Cuit, Inc.
	 	1937 Cedar Lodge	 	$	0	 	 	 	3651	 	 	 	57.00	%
	 
	 	Terrace	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Los Angeles, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	90039	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Mark Gill	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sacker Consultants,
	 	10833 Wilshire #132	 	$	0	 	 	 	2751	 	 	 	43.00	%
	Inc.
	 	Los Angeles, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	90024	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Neil Sacker	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class B:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sandeman, Ltd.
	 	MBC Building No. 3	 	$	7,500,000	 	 	 	7,500	 	 	 	30.00	%
	 
	 	PO Box 72627	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Dubai Media City	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Dubai, United Arab	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Emirates	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Sheikh Waleed	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Al Ibrahim	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Silver Haze Partners
	 	6862 Elm Street	 	$	7,000,000	 	 	 	7,000	 	 	 	28.00	%
	III, L.P.
	 	Suite 720	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	McLean, VA 22101	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Zeid Masri	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael Singer as
	 	 	 	 	 	$	3,950,000	 	 	 	3,950	 	 	 	15.80	%
	Trustee for The
	 	9800 De Soto Avenue	 	 	 	 	 	 	 	 	 	 	 	 
	Singer 1995 Family
	 	Chatsworth, CA 91311	 	 	 	 	 	 	 	 	 	 	 	 
	Trust
	 	Attn: Michael Singer	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GE Capital Equity
	 	201 Merritt 7	 	$	1,450,000	 	 	 	1,450	 	 	 	5.80	%
	Holdings, Inc.
	 	Norwalk, CT 06851	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Scott Webster	 	 	 	 	 	 	 	 	 	 	 	 

 

			
	1	 	Units to vest in accordance with Executive Services Agreement. Presently, only 25% of such
Units are vested.

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Capital	 	 	Units in	 	 	Percentage	 
	Members	 	Notice Address	 	 	Contributions	 	 	Class	 	 	Interest of Class	 
	Chip Seelig
	 	8 Moseman Road	 	$	1,000,000	 	 	 	1,000	 	 	 	4.00	%
	 
	 	Yorktown Heights,	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	NY 10598	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Carol Seelig	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CRG Movie Partners
	 	2701 E Camelback	 	$	800,000	 	 	 	800	 	 	 	3.20	%
	 
	 	Road #180	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Phoenix, AZ 85016	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Mike Witherill	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Silver Haze Partners
	 	6862 Elm Street	 	$	500,000	 	 	 	500	 	 	 	2.00	%
	II, L.P.
	 	Suite 720	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	McLean, VA 22101	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Zeid Masri	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Robert Wong as
	 	600 Lexington Ave.	 	$	500,000	 	 	 	500	 	 	 	2.00	%
	Trustee for the James
	 	New York, New York	 	 	 	 	 	 	 	 	 	 	 	 
	O. Welch, Sr.
	 	10022	 	 	 	 	 	 	 	 	 	 	 	 
	Residuary
Trust fbo
Welch Children
(“Welch Trust”)
	 	Attn: Leighton Welch
 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	and McCabe Heidrch	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	& Wong, PC	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	4 Gatehall Drive	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Parsippany, NJ 07054	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Christine Krentz	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mark Esses
	 	13715 Sunset Blvd.	 	$	500,000	 	 	 	500	 	 	 	2.00	%
	 
	 	Pacific Palisades, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	90272	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	L- T Entertainment
	 	c/o Vestar	 	$	500,000	 	 	 	500	 	 	 	2.00	%
	Enterprises, LLC
	 	2425 East Camelback	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Road	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Phoenix, AZ 85016	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: David Larcher	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mark Kvamme
	 	Sequoia Capital	 	$	250,000	 	 	 	250	 	 	 	1.00	%
	 
	 	4000 Sand Hill Road	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Building 4, Suite 180	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Menlo Park, CA 94025	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael Goguen
	 	Sequoia Capital	 	$	250,000	 	 	 	250	 	 	 	1.00	%
	 
	 	4000 Sand Hill Road	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Building 4, Suite 180	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Menlo Park, CA 94025	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Guy Haskin Fernald
	 	1825 Castro Street	 	$	250,000	 	 	 	250	 	 	 	1.00	%
	 
	 	San Francisco, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	94131	 	 	 	 	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Capital	 	 	Units in	 	 	Percentage	 
	Members	 	Notice Address	 	 	Contributions	 	 	Class	 	 	Interest of Class	 
	Jeff Singer as Trustee
	 	9800 De Soto Avenue	 	$	300,000	 	 	 	300	 	 	 	1.20	%
	of the Singer
	 	Chatsworth, CA 	 	 	 	 	 	 	 	 	 	 	 	 
	Children’s 2002
Irrevocable Trust
	 	91311 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Richard Landry
	 	11333 Iowa Avenue	 	$	100,000	 	 	 	100	 	 	 	0.40	%
	 
	 	Los Angeles, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	90025	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael P. Reilly
	 	1217 Milan Avenue	 	$	100,000	 	 	 	100	 	 	 	0.40	%
	 
	 	South Pasadena, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	91030	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Rafe Fogel
	 	450 Park Avenue	 	$	50,000	 	 	 	50	 	 	 	0.20	%
	 
	 	10th Floor	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	New York, New York	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	10022	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class C:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GE Capital Markets,
	 	299 Park Avenue, 4th	 	$	1,300,0002	 	 	 	1,5383	 	 	 	100.00	%
	Inc.
	 	Floor	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	New York, New York	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	10171	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Brian Crowley	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class D:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Allen & Company,
	 	711 Fifth Avenue	 	 	 	 	 	 	1,2823	 	 	 	100.00	%
	LLC (Warrant
	 	New York, New York	 	 	 	 	 	 	 	 	 	 	 	 
	Holder)
	 	10022	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: John Josephson	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class E:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	The Salter Group,
	 	10850 Wilshire Blvd.	 	 	 	 	 	 	6413	 	 	 	100.00	%
	LLC (Warrant
	 	Suite 530	 	 	 	 	 	 	 	 	 	 	 	 
	Holder)
	 	Los Angeles, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	90024	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Roy Salter	 	 	 	 	 	 	 	 	 	 	 	 

 

			
	2	 	This amount represents the amount agreed to by the Company and the Warrant Holder in the
Second Lien Securities Purchase Agreement as the issue price allocated to the Warrants issued to
the Warrant Holders for Federal income tax purposes.
	 
	3 	 	 Units will be issued only upon exercise of Warrants. Presently, no Units have been issued.

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Capital	 	 	Units in	 	 	Percentage	 
	Members	 	Notice Address	 	 	Contributions	 	 	Class	 	 	Interest of Class	 
	Class F-1:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mark Gill
	 	1937 Cedar Lodge	 	$	450,0004	 	 	 	4505	 	 	 	45.00%5	 
	 
	 	Terrace	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Los Angeles, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	90039	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Mark Gill	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Neil Sacker
	 	10833 Wilshire #132	 	$	283,0004	 	 	 	2835	 	 	 	28.30%5	 
	 
	 	Los Angeles, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	90024	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Attn: Neil Sacker	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Robert Katz
	 	2206 5th St.	 	$	267,0004	 	 	 	2675	 	 	 	26.70%5	 
	 
	 	Santa Monica, CA	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	90405	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class F-2:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael Singer as
	 	 	 	 	 	 	 	 	 	 	6006	 	 	 	60.00	%
	Trustee for The
Singer 1995 Family
	 	9800 Desoto Avenue	 	 	 	 	 	 	 	 	 	 	 	 
	Trust 
	 	Chatsworth, CA 91311	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Jeff Singer as Trustee
	 	 	 	 	 	 	 	 	 	 	4006	 	 	 	40.00	%
	of the Singer
Children’s 2002
	 	9800 Desoto Avenue	 	 	 	 	 	 	 	 	 	 	 	 
	Irrevocable Trust
	 	Chatsworth, CA 91311	 	 	 	 	 	 	 	 	 	 	 	 

 

			
	4	 	Class F-1 Amount if fully vested. Vesting occurs in accordance with the Class F-1
Member’s
executive services agreement or employment agreement with the Company.
	 
	5	 	Assumes all Class F-1 Units are fully vested. Vesting occurs in accordance with the
Class F-1 Member’s executive services agreement or employment agreement with the Company.
	 
	6	 	Assumes all Class F-2 Units are fully vested. Class F-2 Units vest at the same rate as the Class F-1 Units vest.

 

 

Schedule B

to

Schedule 4.3

Ownership of Stock of Company

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Membership	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Interest	 	 	 	 	 	 	Percentage of	 
	 	 	 	 	 	 	Class of	 	 	Certificate	 	 	Number of	 	 	Outstanding	 
	Issuer	 	Stockholder	 	 	Stock	 	 	Number(s)	 	 	Units	 	 	Units	 
	Company
	 	Holdings	 	Units	 	 	1	 	 	 	100	 	 	 	l00	%

 

 

Schedule 8.9

to

Securities Purchase Agreement

Transactions with Affiliates

The right
of first refusal arrangement set forth in that certain letter agreement dated
June 8, 2007, between Holdings and Sandeman Investments, Ltd.

 

 

Schedule l2.2 
to

Securities Purchase Agreement

Risk Factors

     An
investment in the Notes, Warrants and Class C Units involves a high degree of
risk. A prospective investor should carefully consider the risks described herein before
making an investment decision. The risks and uncertainties described herein are not the
only ones faced by the Group Members. Additional risks and uncertainties that the
Group Members and their management are unaware of, or that they may currently deem
immaterial, may become important factors that harm their business, results of operations and
financial condition. If any of the following risks actually occur, the Group Members’
business, results of operations and financial condition could suffer. In that case, the value
of the Group Members may suffer and a holder of Notes, Warrants and Class C Units may
lose all or part of its investment.

Capitalization and Financial Risk

Because there may be a substantial delay between the completion of a purchase of
Notes and Warrants and the production of a motion picture
(collectively, “Films”),
the Group Members’ expenses may be increased and it may take longer for the
Company to generate revenues.

     The Group Members and their management have no way to predict when the
Company will begin production of a motion picture. Production schedules on the Films
may be subject to delays occasioned by scheduling conflicts of directors or actors
attached to the Films. In addition, other considerations such as the availability and
conditions of the locations the Company chooses to utilize may impact the timing of the
commencement of principal photography or other phases of production. While the
Company intends to begin production of the Films as soon as practical after the closing
of the offering of the Notes and Warrants (the “Offering”), any delay in the start of
production would also delay the completion of production, and the
Company will not be able to
generate significant revenues until a motion picture has been completed. General overhead and
administrative costs will be incurred by the Group Members during this period, which means
such a delay would also increase their expenses and reduce a
Purchaser’s potential return. The Group Members also have incurred costs related to the
establishment and capitalization of Holdings that have been funded by a $500,000 advance
from a prospective purchaser of Class B Units. While these costs are reflected in
Holdings’ budget, Holdings plans to issue $500,000 worth of Class B Units to such
investor in exchange for this pre-closing $500,000 advance of
funds.

Because
it will be difficult to project the future revenues of the Films individually or
cumulatively, the Group Members’ results of operations may vary substantially from quarter
to quarter and year to year.

 

 

     In
accordance with U.S. generally accepted accounting principles
(“GAAP”) for the
motion picture industry, the Company intends to amortize production costs based on current
estimates of the total revenues expected to be received from a Film. The Group
Members will be required to regularly review these estimates and revise them when
necessary. As a result, actual results of operations may vary from period to period based on
revisions in estimates caused by changes in conditions affecting the motion picture industry
in general and the viewing audience in particular. A downward revision in revenue estimates
would potentially require a change in the amortization rate of a Film’s costs resulting in
reduced or negative earnings.

     The Group Members have no operating history from which to base future operating
performance. The Group Members’ ability to forecast accurately the revenues of the Company
is further limited because motion picture productions have long production cycles that make it
difficult to predict the periods in which motion pictures will be completed, and in turn, released
pursuant to a release schedule. Further, if the
Group Members increase their average production budgets or overhead, they may
increase the financial risks. Since some portion of the Group Members’ operating expenses
are fixed in the short-term, the Group Members may not be able to quickly reduce spending if
revenues are lower than projected. If the Company does not achieve its expected revenues,
operating results will be below expectations.

The
Group Members could have losses and there is no assurance of future profitability .

     The Group Members have no operating history. There is no assurance to
Purchasers that the Group Members will operate profitably, and if the Group Members
cannot, they may not be able to meet their applicable obligations regarding debt service,
working capital requirements, capital expenditure plans, anticipated production of Films
or other cash needs. The inability to meet those needs could have a material adverse
effect on the Group Members’ business, results of operations and financial conditions.

The
Group Members face substantial capital requirements and financial risks.

     The
production, acquisition and distribution of motion pictures require a
significant amount of capital. A material amount of time may elapse between the
expenditure of funds and the receipt of commercial revenues from motion pictures. This
timing gap requires that the Group Members fund a significant portion of their capital
requirements from a Class B Membership Unit offering by Holdings of $25,000,000, a
senior secured, syndicated revolving credit facility of up to $l40,000,000 (which
may be increased in an amount up to $225,000,000) with General Electric Capital Corporation, as
administrative agent for the lending syndicate (the “Senior Facility”), and the Offering.

A
significant portion of the expected returns are dependent on the Company producing several
significant commercial successes in the Films. The Group
Members cannot assure Purchasers that any of the Films will reach this level of success.

 

 

     The estimated financial results prepared for the Group Members are based, in part, on
the results of motion pictures produced by Mark Gill, the Company’s Chief
Executive Officer, and Neil Sacker, the Company’s President & Chief Operating
Officer,
over the last several years. The Group Members cannot assure Purchasers that their
future results of operations will reflect similar successes. Further, the Group Members
cannot assure Purchasers that their new titles or any sequels, if produced, will achieve
any commercial success. Without a newly released motion picture with the level of
success of the referenced earlier movies, the Company’s revenues could be significantly
lower than projected and jeopardize the return of capital.

Credit Facility Risk

Covenants
contained in the Group Members’ Senior Facility and the Offering may
restrict or prohibit their ability to borrow additional money, reinvest in new
productions, sell assets and pay dividends and require that both of
Messrs. Gill and
Sacker continue providing their services to the Group Members on a full time basis.
Compliance with these restrictions and covenants may limit the Group
Members’ ability
to implement elements of their business strategy and the loss of either Mr.
Gill or Mr. Sacker without a timely acceptable replacement would be an event of
default under the credit facilities.

     The Company currently intends to finance its future motion picture productions in
part with funds made available to it under the Senior Facility. The Senior Facility and the
Offering documents will contain restructive covenants including restrictions or
prohibitions on dividends, capital expenditures, indebtedness and the redemption of
ownership interests, which may limit the Group Members’ ability to operate their
business or implement elements of their business strategy. In addition, these facility
documents are conditional on the Group Members’ access to the
services of Messrs. Gill and
Sacker or successors to each of them acceptable to the facility providers. Further, with
certain limited exceptions, Holdings will likely be unable to issue any preferred
ownership interests, other than the Class B Units, and the Group
Members will
likely be unable to incur additional indebtedness or guarantee the indebtedness of
others, without the consent of the facility providers. Were the services of either
Mr. Gill or Mr. Sacker to be terminated or otherwise not available due to death, disability
or resignation without their replacement by executives acceptable to the lending syndicate
within 90 days of the termination of services or if the Group Members did not comply with
the covenants and conditions in these credit facilities, an event of default would exist under
the credit facilities, which could result in the early termination of the credit facilities
by the facility providers. In addition, to secure these credit facilities, the
Group Members will be required to grant to (a) the facility providers under the Senior
Facility, a first priority security interest, and (b) the facility providers under the Offering, a
second priority security interest, in each case in each of its Films and all of its other
assets. The Group Members cannot assure Purchasers that both of
Messrs. Gill and Sacker will continue
to be available to provide services to the Group Members, that timely acceptable
replacements can be found or that the Group Members will be able to comply with these or
other covenants or conditions in the future, generate sufficient cash flow to repay the
indebtedness to be incurred under such credit facilities or that the terms of these credit

 

 

facilities will not limit their ability to operate their business or implement elements
of their business strategy. The Group Members further cannot assure Purchasers that, in the
event the need arises, they will be able to obtain additional financing or to refinance their
indebtedness under these credit facilities on terms acceptable to the Group Members, or at
all.

The Company will be required to obtain completion bonds on the motion pictures it
produces as part of the requirements of its credit facilities.

     As a requirement of their commitments to supply the financing under their
respective credit facilities, the facility providers will demand that the Company obtain
completion bonds from a completion bond company before initiating production on a
Film. A completion bond is a promise by a third party, which is typically a completion
bond company, that a Film will be completed and delivered by a particular date. Under
the terms of a completion bond, if the Company requires additional funds to complete a Film
by the delivery date, the completion bond company will either disburse these funds or cause
the Company to abandon production and pay production advances and any other amounts owed to
entities financing such Film. The costs associated with securing a
completion bond will
increase the budget of a Film. Further, if the Company were unable to obtain a completion bond
on acceptable terms for any individual Film, it could not begin production on that Film.
The Company’s inability to secure a completion bond on acceptable terms when required to do
so may have a material negative impact on the operations of the Group Members.

Production Risk

The Company’s revenues could decline if it fails to meet its production goals and
release schedules.

     The production and distribution of motion pictures are subject to numerous
uncertainties, including the satisfaction of any financing conditions, the availability of
desired talent and quality material, and the release schedule of the major motion picture
studios and independent production companies. If the Company fails to meet its production
goals and release schedules, its revenues would decline. The Company currently intends to
produce 28 Films over the next five years. The Group Members cannot assure the Purchasers that
their goals will be met in the future. The Group Members also cannot assure the Purchasers that any of the pictures scheduled for release
in the future will be completed on budget, or at all, or released following completion.

The loss of key executives or the failure to hire and integrate a capable new
executive in place of either of them could harm the Group Members’ business.

     The Group Members will rely heavily on Mr. Gill and Mr. Sacker for their success and
the loss of either of these officers could disrupt their business (and also

 

 

would constitute an event of default under the Group Members’ credit facilities if
replacements acceptable to the facility providers are not timely obtained—see Credit
Facility Risk). Virtually all material decisions concerning the conduct of the business,
including which motion pictures the Company will develop and produce are made or
significantly influenced by Messrs. Gill and Sacker. Holdings’ executive services
agreements with Messrs. Gill and Sacker are for an initial term of six years and expire on
their sixth anniversary. While the Group Members believe that they will be able to enter
into comparable executive services agreements with them at the end of such term if
necessary, the Group Members cannot assure the Purchasers that Messrs. Gill and Sacker
will execute such executive services agreements. Should the Group Members fail to
continue to engage either Mr. Gill or Mr. Sacker, the Company may not be able to
maintain the visibility in the industry that is necessary to maintain and extend its
production, financing and distribution agreements and attract high quality talent.
Further, there is the possibility that Messrs. Gill and Sacker will not continue to enjoy a
positive working relationship in the future. Should Messrs. Gill and Sacker cease to enjoy a
positive working relationship, the fact that each will have a significant, separate
ownership interest in Holdings could disrupt the business operations, possibly resulting in a
reduction in revenues.

If the Group Members are unable to continue to attract creative talent, the quality
and/or commercial success of the motion pictures the Company produces may decline.

     The Group Members believe the success of a motion picture is tied closely to
recruiting high-quality creative personnel for production and, if the Group Members are
unable to attract such creative talent, the motion pictures the Company produces and the Group
Members finance may be less commercially successful. Through special-purpose production service
companies, directors, actors and screenplay writers will be contracted for on a motion
picture-by-motion picture basis. Competition for these quality creative artists is intense. Since
the quality and success of a motion picture is largely dependent on the artists who created it, the
Group Members’ inability to attract first-rate creative talent could cause the quality and/or
commercial success of the motion pictures the Company produces and the Group Members finance to decline.

The Group Members’ future performance and profitability could be impaired if they are
unable to manage growth.

     The Group Members’ future performance and profitability will depend on a number of
factors, including their ability to recruit, motivate and retain qualified personnel.
Moreover, management, administrative and financial resources may face significant demands
resulting from the level of film production.

Because the terms of a standard completion bond state that the bond company may
take control of the production if the Company does not produce the Film
on schedule and within budget, the artistic integrity and commercial viability of the
Film may be reduced.

 

 

     The Company’s failure to complete any bonded Film on schedule or within
budget could result in the completion bond company taking over production. If a
completion bond company takes over production, it has the right to replace certain
members of the production team, which right, if exercised, may reduce the quality of any
finished Film or limit the Company’s ability to promote the Film in accordance with
original promotion plans, all of which may harm the business.

If the Company does not complete any motion picture on schedule or within budget,
its ability to generate revenue may be diminished or delayed.

     The Group Members’ success depends on the ability of the Company to complete the Films on schedule and within budget. The Company’s
ability to adhere to these schedules and budgets will depend upon many factors that are not
necessarily within the control of the Group Members. If the Company does not complete the
Films on schedule, their distribution will be delayed and it will increase the time before the
Company begins to generate revenues, which may reduce the ultimate financial return
to the holders of the Group Members’ equity, including Class C Units.

Risks Associated with the Motion Picture Industry

The Group Members’ future results of operations may be adversely affected by a
labor strike.

     Many film productions employ members of a number of entertainment industry guilds
and unions, including, without limitation, the Writers Guild of America, the Screen Actors Guild,
the Directors Guild of America, the International Alliance of Theatrical and
Stage Employees, the Teamsters and the Alliance of Canadian Cinema, Television and
Radio Artists. A strike by one or more of the unions that provide personnel essential
to the production of motion pictures could delay or halt the Company’s ongoing production
activities. Such a halt or delay, depending on the length of time, could cause a delay or
interrption in the release of new motion pictures, which could have a material adverse effect
on the Group Members’ business, results of operations or financial condition.
Although the Company is not a signatory to any union or guild, the Company (through
one or more of its subsidiaries) is likely to affiliate with one or more unions on a per
production basis in connection with most (if not all) of its productions. In the event that
any collective bargaining agreement is allowed to expire and a strike occurs, the
Company’s ability to produce motion pictures will be materially adversely affected and the
revenues and results of operations in future periods may be adversely affected.

The Group Members’ revenues and results of operations may fluctuate unexpectedly
due to factors such as the timing of releases of competing motion pictures, the public
acceptance of the motion pictures produced by the Company, the availability of talent and other
factors that the Group Members cannot control.

 

 

     The Group Members cannot assure the economic success of any motion picture the Company
produces or the Group Members finance because the production, completion and distribution of
motion pictures are subject to numerous uncertainties, including the availability of creative
talent, the release schedule of competing motion pictures, acceptance by the public and
other factors. Predicting the economic success of a motion picture also is made difficult by
the fact that the rights to a motion picture are often purchased at a very early stage in
the motion picture’s development. The Group
Members are thus exposed to the risk of acquiring rights to motion pictures that cannot be
exploited as anticipated. In addition, the commercial success of a motion picture also
depends upon the quality and acceptance of other competing motion pictures released
into the marketplace at or near the same time, the availability of alternative forms of
entertainment and leisure time activities, general economic conditions and other tangible
and intangible factors, all of which can change and cannot be predicted with certainty.
Therefore, there is a substantial risk that some or all of the motion pictures the Group
Members produce and finance will not be commercially successful, resulting in costs not
being recouped or anticipated profits not being realized. If some or all of these motion pictures
are not commercially successful, the creative community may look to the Group
Members’ competitors to produce and finance their motion pictures. This will have a
material adverse effect on the Group Members’ business, and the results of operations
could fall short of expectations.

If the Group Members incorrectly project revenues of the Company’s motion pictures,
industry accounting methods require that they accelerate the amortization of production costs and
recognize unanticipated book losses.

     The Group Members’ results of operations in future years depend on their ability to
project revenues of the Company’s titles because, in accordance with U.S. GAAP and industry
practice, the Company amortizes negative costs for each motion picture using the
“individual-films-forecast” method. Under this method, costs are amortized for each motion
picture in the ratio that revenues eared in the current period for a particular motion
picture title bear to management’s estimate of the total revenues to be realized from all
media and markets for that motion picture title. The Group Members’ management will regularly
review, and revise when necessary, the total revenue estimates on a motion picture-by-motion
picture basis, which may result in a change in the rate of amortization and/or a write-down of the
motion picture asset to net realizable value. As a result, in the event the Group Members’ initial
total revenue estimates for a title were too high, under the industry’s accounting method,
they would immediately recognize the entire loss in instances where they expect that a motion
picture will not recover their investment. Comparatively, the profit of a successful motion
picture must be deferred and recognized over the entire revenue stream generated by the individual
picture. Accordingly, the Group Members’ revenues and results of operations may fluctuate
significantly from period to
period, and the results of any one period may not be indicative of the results for any
future period.

There is a risk of an oversupply of motion pictures in the marketplace that may cause
the Company to experience a decline in revenues and harm the Group
Members’ results of operations.

 

 

     Despite a general increase in market size, the number of motion pictures released by
the Group Members’ competitors, particularly the major U.S. motion picture studios, especially
during peak periods, may create an oversupply of product in the market, and may reduce the
Company’s share of gross box-office receipts and make it more difficult
for the Company’s motion pictures to succeed. Oversupply may become most
pronounced during peak release times, such as school holidays and national holidays,
when theater attendance is expected to be highest. The Group Members cannot guarantee
that the Company will be able to release all of its Films during peak release times as
scheduled. An oversupply of competing motion pictures may cause the Company’s
revenues to decline and may harm the Group Members’ results of operations.

The
Group Members’ revenue and profitability may be negatively affected by advances in
technology that create alternative forms of entertainment.

     The
entertainment industry in general and the motion picture industry in
particular, continue to undergo significant changes, primarily due to technological
developments. Due to this rapid growth of technology and shifting consumer tastes, the
Group Members cannot accurately predict the overall effect that such changes may have on the
potential revenue from, and profitability of motion pictures. In addition, certain
distribution outlets for the motion pictures the Company produces and the Group
Members finance may not obtain the public acceptance that was predicted. This may
result in the Company paying higher distribution fees or receiving lower licensing fees
when it renegotiates its distribution agreements.

Motion
picture piracy may adversely affect the Company’s ability to maximize its
revenues.

     Motion
picture piracy is extensive in many parts of the world, including South
America, Asia (including Korea, China and Taiwan), the countries of the former Soviet
Union and other former Eastern bloc countries. The Motion Picture Export Association,
the American Motion Picture Marketing Association and the American Motion Picture
Export Association monitor the progress and efforts made by various countries to limit or
prevent piracy. In the past, these various trade associations have
enacted voluntary embargoes on motion picture exports to certain countries in order to pressure the
governments of those countries to become more aggressive in
preventing motion picture piracy. In addition, the U.S. government has publicly considered implementing trade
sanctions against specific countries which, in the opinion of the
U.S. government, do not
prevent copyright infringement of U.S.-produced motion pictures. There can be no
assurance, however, that voluntary industry embargoes or U.S. government trade
sanctions will be enacted. If enacted, such actions could impact the amount of revenue
that the Company realizes from the international exploitation of motion pictures
depending upon the countries subject to such action and the duration of such action. If
not enacted or if other measures are not taken, the motion picture industry (and the
Company as an industry participant) may continue to lose an indeterminate amount of
revenue as a result of motion picture piracy.

 

 

Risks Related to the Offering

Management has some discretion over the use of proceeds from the Offering.

     While
the affirmative vote of a majority of the Board of Directors is required for the
approval of certain significant actions and expenditures outside the coverage of an approved
business plan or budget, the Group Members’ management will retain some discretion over the use of
proceeds raised in the Offering. Therefore, subject to such approval requirements, the
Purchasers must rely on the judgment of the Group Members’ management in the application of the
proceeds from the Offering.

Because
the Group Members will spend significant funds with no ability to predict
whether a Film or any Film will be successful, the Purchasers will encounter
substantial financial risk.

     Producing motion pictures requires that the Group Members spend significant
funds based entirely on their preliminary evaluation of a Film’s
commercial potential. It
is impossible, with a high degree of accuracy, to predict the success of any Film before its
production starts. The ability of a Film to generate revenues will
depend upon a variety
of unpredictable factors, including, (i) public taste, which is always subject to change;
(ii) the quantity and popularity of other films and leisure activities available to audiences
upon a Film’s release; (iii) the competition for exhibition at movie theatres, through video
retailers, on cable television and through other forms of distribution; and (iv) the fact that
not all Films are distributed in all media. For any of these reasons, a motion
picture may be commercially unsuccessful and the Group Members’ business may suffer.

     Although
the Group Members intend to try to reduce the risk of motion picture
production through their greenlighting process, that process is based on a number of
estimates of the ability of the Company to license international distribution rights and the
anticipated license fees for North American distribution. If the
Company cannot achieve
an acceptable North American theatrical distribution arrangement, the Company may instead
seek to license a motion picture for home video, DVD, VOD and television exploitation only.
Any failure to achieve the estimated international sales or to achieve acceptable North American
theatrical distribution arrangements will adversely affect the Group Members’ performance.

The Group Members are dependent upon the decisions of the Board of Directors of
Holdings.

     The
business, property and affairs of the Group Members will be almost entirely dependent
upon the decisions of the Board of Directors of Holdings, two Directors of
which will be appointed by the holders of Class A Membership Units (the “Class A
Members”), three of which will be appointed by three of the holders of Class B
Membership Units (one by Sandeman Investments, Ltd., one by Silver Haze Partners III,
L.P. and one by Michael Singer, together, the “Class B Members”), and one of
whom will be jointly approved by the Directors appointed by the Class A Members and
the Class B Members. The other Purchasers shall have no right to appoint a Director.

 

 

Because
Delaware law provides that dissolving companies retain certain financial
obligations, the Group Members’ investors may be liable for future claims.

     In
the event that a Group Member is dissolved, the Directors will notify all
current and former employees, contractors and creditors and give them a reasonable period of
time to alert the Group Member of any remaining obligations. The Group
Member will pay or make reasonable provision to pay all claims and obligations,
including all contingent, conditional or unmatured contractual claims, known to the
Group Member and will make such provision as will be reasonably likely to be sufficient
to provide compensation for any claim against the Group Member which is the subject of
a pending action, suit or proceeding, if any, to which the Group
Member is a party. The
Group Member will also make such provision as will be reasonably likely to be sufficient
to provide compensation for claims that have not been made known to the Group
Member or that have not arisen but that, based on facts known to the Group Member, are
likely to arise or to become known to the Group Member within 10 years after the date of
dissolution. Any equity owner of the Group Member, including in the case of Holdings, a
holder of Class C Units, who receives a distribution in violation of Section l8-804(a) of the
Delaware Limited Liability Company Act, and who knew at the time of the distribution that the
distribution violated such section, will be liable to the Group Member for the amount of the
distribution. Notwithstanding the foregoing, however, any equity owner who receives a distribution
from the Group Member will have no liability for the amount of the distribution after the expiration
of 3 years from the date of the distribution unless an action to recover the distribution from such
member is commenced prior to the expiration of the said 3-year period and an adjudication of
liability against such member is made in the said action.

Cash
distributions are not guaranteed and will fluctuate with the Group Members’
performance.

     Although
Holdings intends to distribute income earned, there can be no assurance
regarding the amounts of income to be generated by the Group Members.
The amount distributed in
respect of the Class C Units will depend upon numerous factors, including profitability,
fluctuations in working capital, the sustainability of margins and the performance of the
Films.

The
Notes, Warrants and Class C Units should be viewed as an undiversified and
illiquid holding.

     The
Notes, Warrants and Class C Units will be undiversified and such
securities will be
illiquid, as they are not expected to be listed or quoted on any stock exchange or other market. The
Notes, Warrants and Class C Units are being offered without
registration under the Securities Act, in reliance upon an exemption provided
by Section 4(2) of the Securities Act and Regulation D promulgated thereunder, as well as certain
state securities laws exemptions. Certain restrictions on transferability preclude disposition
and transfer of the Notes, Warrants or Class C Units except pursuant to an effective
registration statement or in accordance with an exemption from registration under the
Securities Act and applicable state securities. There is currently no market for

 

 

the Notes,
Warrants or Class C Units and no market is expected to develop. The Notes,
Warrants and Class C Units have not been registered under the Securities Act or the
securities laws of any state. Consequently, no Purchaser may sell or otherwise transfer or
dispose of any Notes, Warrants or Class C Units unless such securities are registered
under the Securities Act and any applicable state securities laws or unless such securities
are being sold or otherwise transferred or disposed of in reliance on an exemption from
such registration requirements and in compliance with limited liability company
agreement of the applicable Group Member. As a result, the Purchasers may be unable to
dispose of their investment at the time they desire to do so.

Conflicts of Interest

     Holdings
will be entering into various agreements with certain of its members,
including Executive Services Agreements with Messrs. Gill and Sacker, an employment
agreement with Robert Katz (a Class F-l Member), the Senior Facility and the Offering
(including Warrants) with a Class B Member or its affiliates, and a right of first refusal
with Sandeman Investments, Ltd. (a Class B Member) with respect to pay and free
television distribution rights in the territory of the Middle East and
North Africa to all of
the Company’s Films produced during the five year period commencing on the closing of the
Offering.

Tax Risks.

     VARIOUS ASPECTS OF THE INVESTMENT IN THE NOTES, WARRANTS
AND CLASS C UNITS, INCLUDING, WITHOUT LIMITATION, FEDERAL, STATE,
LOCAL OR FOREIGN TAXATION, MAY PRODUCE EFFECTS WHICH CAN
VARY BASED ON A PROSPECTIVE INVESTOR’S PARTICULAR
CIRCUMSTANCES, INCLUDING BUT NOT LIMITED TO STATUS AS A C
CORPORATION (FOR PURPOSES OF THE RULES REGARDING INTEREST
DEDUCTIONS ON APPLICABLE HIGH YIELD DISCOUNT OBLIGATIONS),
COUNTRY OF RESIDENCY, AND SITUS AND NATURE OF THE GROUP
MEMBERS’ OPERATIONS. THEREFORE, PROSPECTIVE INVESTORS ARE
URGED AND EXPECTED TO CONSULT THEIR OWN TAX ADVISORS WITH
REGARD TO ALL OF THE FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES OF AN INVESTMENT IN THE GROUP MEMBERS WITH
SPECIFIC REFERENCE TO THEIR INDIVIDUAL TAX SITUATIONS. THE GROUP
MEMBERS AND THEIR MANAGEMENT ARE NOT MAKING ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND, AND NONE SHOULD BE
INFERRED WITH RESPECT TO THE GROUP MEMBERS, THE ECONOMIC
RETURNS, TAX LIABILITY OR TAX ADVANTAGES, IF ANY, WHICH MAY
ACCRUE TO ANY INVESTOR.

Financial Projections.

     Forward looking data, such as the results of the financial projections contained
in the Five Year Business Plan and Five Year Budget set forth in
Schedule B-1 and
Schedule B-2 to the Amended and Restated Holdings LLC Agreement, are inherently

 

 

uncertain,
and no representation or warranty, express or implied, is made with respect to
such projections or the assumptions, hypothetical results, estimates, hypothetical
performance analysis or other financial information contained in such models. Actual results
may vary materially from the hypothetical results contained herein.
Assumptions involve significant
elements of subjective judgments and analyses and changes thereto and/or consideration of
different or additional factors could have a material impact on the results indicated.

     Each prospective Purchaser must make its own evaluation of such financial
projections (including the assumptions on which they are based). The Group Members
and their advisors do not assume any responsibility for the accuracy or validity of such
financial projections or the assumptions, hypothetical results, estimates, hypothetical
performance analysis or any other financial information contained in such projections.
Nothing contained herein shall constitute any representation or warranty as to future
performance. The Group Members and their advisors do not expect to update or
otherwise revise the information contained in the financial projections. Each prospective
Purchaser should conduct its own investigation to determine the merits and risks relating to
the assumptions and the operation of the Group Members and it should consult with its own counsel,
accountant or business advisor with respect to business, legal, tax and other matters
concerning the materials.

Only a partial list of Risk Factors.

     THE FOREGOING LIST OF RISK FACTORS DOES NOT PURPORT TO BE A
COMPLETE EXPLANATION OF THE RISKS INVOLVED IN THE OFFERING
PROSPECTIVE INVESTORS SHOULD REVIEW ALL MATERIALS PROVIDED BY
THE GROUP MEMBERS BEFORE DETERMINING WHETHER TO INVEST IN THE
NOTES AND WARRANTS.

 

 

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. In the event the Cash Interest Conditions are satisfied immediately after
giving effect to any interest payment required to be paid hereunder, interest shall be payable in
cash to the extent payable by the Company (in its discretion) in cash (and, if so determined, in
an

 

 

amount not less than the Cash Percentage of the accrued but unpaid interest due and payable on
such date), with any additional interest required to be paid on any Interest Payment Date paid by
being capitalized and added to the aggregate outstanding principal amount of this
Note and thereafter bearing interest at the Applicable Interest Rate. In the event the Cash Interest
Conditions are not satisfied immediately after giving effect to any interest payment required
to be paid hereunder, all accrued but unpaid interest required to be paid on the applicable
Interest Payment Date shall be paid by being capitalized and added to the aggregate outstanding principal
amount of this Note. 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. If an Event of
Default has occurred
and is continuing, the per annum interest rate payable in respect of
the outstanding principle
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 on demand by
the Company by being capitalized and added to the outstanding principal balance of this
Note.

          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 the Cash Interest Conditions are satisfied immediately after giving
effect to any interest payment due hereunder on an Interest Payment Date and the Company has paid
in cash accrued interest to the extent required by the introductory
paragraph of this Note and
(b) thirteen and one half percent (13.5%) per annum, in all other cases.

          “Cash Interest Conditions” means each of the following: (a) no Event of
Default shall have occurred and be continuing or would result after giving effect to any interest
payment to be made hereunder, (b) immediately after giving effect to any interest payment to be
made hereunder, not less than the Threshold Amount is on deposit in each Borrower Liquidity
Reserve Account (and, in the case of the Interest Reserve Account,
such account is fully funded)
and (c) the Company has unrestricted cash and Cash Equivalents, together with unused borrowing
availability under the Credit Agreement that may be drawn to fund interest payments due hereunder,
sufficient to pay in cash accrued but unpaid interest due and payable on the applicable
Interest Payment Date equal to the Cash Percentage or more of the accrued but unpaid interest
due and payable on such date.

          “Cash Percentage” means a percentage (expressed as a fraction), the numerator
of which is five percent (5.0%) and the denominator of which is the Applicable Interest Rate.

          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      	 
	 	 	Officer 	 
	 

 

 

EXHIBIT B

FORM OF WARRANT

 

WARRANT

To Purchase Class C Units

of

The Film Department Holdings LLC

Warrant No.  ___

No. of Class C Units ___

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page	 
	I.	 	 	 	DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	II.	 	 	 	EXERCISE OF WARRANT	 	 	3	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	2.1	 	 	 	Exercise Period	 	 	3	 
	 
	 	2.2	 	 	 	Exercise Notice; Delivery of Certificates	 	 	3	 
	 
	 	2.3	 	 	 	Payment of Warrant Price	 	 	4	 
	 
	 	2.4	 	 	 	Payment of Taxes	 	 	4	 
	 
	 	2.5	 	 	 	Certain Restrictions	 	 	4	 
	 
	 	 	 	 	 	 	 	 	 	 
	III.	 	 	 	TRANSFER, DIVISION AND COMBINATION	 	 	4	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	3.1	 	 	 	Transfer	 	 	4	 
	 
	 	3.2	 	 	 	Division and Combination	 	 	5	 
	 
	 	3.3	 	 	 	Maintenance of Books	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	IV.	 	 	 	RESTRICTIONS AGAINST ISSUANCE OF ADDITIONAL CLASS C UNITS	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	V.	 	 	 	NOTICES TO WARRANT HOLDERS	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	5.1	 	 	 	Notice of Threshold Date	 	 	5	 
	 
	 	5.2	 	 	 	Notice of Corporate Action	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	VI.	 	 	 	NO IMPAIRMENT	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 
	VII.	 	 	 	RESERVATION AND AUTHORIZATION OF CLASS C UNITS	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 
	VIII.	 	 	 	TAKING OF RECORD; CLASS C UNITS AND WARRANT TRANSFER
OF BOOKS	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 
	IX.	 	 	 	RESTRICTIONS ON TRANSFERABILITY	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	9.1	 	 	 	Compliance With LLC Agreement	 	 	6	 
	 
	 	9.2	 	 	 	Restrictive Legend	 	 	7	 
	 
	 	9.3	 	 	 	Termination of Restrictions	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	X.	 	 	 	SUPPLYING INFORMATION	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	XI.	 	 	 	LOSS OR MUTILATION	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	XII.	 	 	 	LIMITATION OF LIABILITY	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	XIII.	 	 	 	TAG-ALONG RIGHTS	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	XIV.	 	 	 	DRAG-ALONG RIGHTS	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	XV.	 	 	 	VOTING RIGHTS	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	XVI.	 	 	 	REGISTRATION RIGHTS	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	XVII.	 	 	 	DISTRIBUTIONS; TAX ALLOCATIONS	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	XVIII.	 	 	 	MISCELLANEOUS	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	18.1	 	 	 	Nonwaiver and Expenses	 	 	8	 
	 
	 	18.2	 	 	 	Notices	 	 	9	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page	 
	 
	 	18.3	 	 	 	Successors and Assigns	 	 	9	 
	 
	 	18.4	 	 	 	Amendment	 	 	9	 
	 
	 	18.5	 	 	 	Severability	 	 	9	 
	 
	 	18.6	 	 	 	Section and Other Headings	 	 	9	 
	 
	 	18.7	 	 	 	Governing Law	 	 	9	 
	 
	 	18.8	 	 	 	Waiver of Jury Trial	 	 	10	 
	 
	 	18.9	 	 	 	Covenant Regarding Consent	 	 	10	 
	 
	 	18.10	 	 	 	Remedies	 	 	10	 
	 
	 	18.11	 	 	 	Counterparts	 	 	10	 

	 	 	 

	Exhibit A

	 	Subscription Form
	 
	 	 
	Exhibit B

	 	Addendum Agreement
	 
	 	 
	Exhibit C

	 	Assignment Form

 

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND MAY NOT BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER
THE SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE (AND, IN SUCH CASE, AS
REASONABLY REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE BOARD OF
DIRECTORS SHALL HAVE BEEN DELIVERED TO THE COMPANY TO THE EFFECT THAT SUCH OFFER OR SALE IS NOT
REQUIRED TO BE REGISTERED UNDER THE SECURITIES ACT). THIS WARRANT IS SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OTHER TERMS AND CONDITIONS SET FORTH IN (X) THE AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF THE FILM DEPARTMENT HOLDINGS LLC (“LLC AGREEMENT”),
AND (X) THE OTHER TRANSACTION DOCUMENTS DESCRIBED IN THE LLC AGREEMENT, IN EACH SUCH CASE, AS
AMENDED FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.

      

			
	No. of Class C Units: ___
	 	Warrant No. ___

WARRANT

To Purchase Class C Units of

The Film Department Holdings LLC

     Whereas, in connection with the Securities Purchase Agreement dated as of June 27, 2007 (as the
same may be modified from time to time, the “Securities Purchase Agreement”) among The Film
Department Holdings LLC, a Delaware limited liability company (the “Company”), the
purchasers named therein and General Electric Capital Corporation, as collateral agent for such
purchasers, the Company has agreed to issue and sell to the purchasers named therein (i)
$30,000,000 aggregate principal amount of its 12% Senior Secured Second Lien Notes due 2014 (such
notes, the “Notes”) and (ii) warrants to purchase Class C Units (as hereinafter defined)
upon the terms and subject to the conditions set forth therein (collectively, the “TFD Class C
Warrants”) and

     WHEREAS, this Warrant is one of the TFD Class C Warrants.

     NOW
THEREFORE, the parties hereby agree that [                    ], or registered assigns, in exchange for
consideration the receipt and sufficiency of which is hereby acknowledged, is entitled, at any time
during the Exercise Period (as hereinafter defined), to purchase from the Company,___Class C Units
(as hereinafter defined and subject to adjustment as provided herein), in whole or in part,
including fractional parts, at a purchase price of $.0 1 per Class C Units on the terms and
conditions set forth herein.

I. DEFINITIONS

     The following terms have the meanings set forth below:

     “Additional Class C Units” means all Class C Units issued by the Company after the date of
this Warrant other than any Warrant Units.

     “Board” means the board of directors of the Company.

 

 

     “Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are
required or permitted to be closed in the State of New York.

     “Class B Members” means those persons purchasing Class B Units in the Company as of the
date hereof for an aggregate amount of $25,000,000 and who are signatories to the LLC Agreement,
and their successors and assigns.

     “Class B Units” has the meaning set forth in the LLC Agreement.

     “Class C Units” means (except where the context otherwise indicates) the Class C Units of
the Company as constituted on the date of this Warrant, and any capital unit into which such Class
C Units may thereafter be reclassified or otherwise changed, and shall also include (i) any Class C
Units of the Company of any other class (regardless of how denominated) issued to the holders of
Class C Units upon any reclassification thereof and (ii) Class C Units of a successor or acquiring
company received by or distributed to the holders of Class C Units.

     “Company” has the meaning set forth in the recitals.

     “Convertible Security” means any option, warrant or membership interest of the Company or
any other security or instrument, including without limitation any debt security, in any case,
which is convertible directly or indirectly into or exercisable or exchangeable for Additional
Class C Units, either immediately or upon the occurrence of a specified date or a specified event.

     “Exercise Period” has the meaning set forth in Section 2.1.

     “Exercise Price” means, in respect of a Class C Unit on any date herein specified, the
price at which a Class C Unit may be purchased pursuant to this Warrant on such date.

     “Expiration Date” means June 27, 2017.

     “Governmental Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

     “Holder” means [               ], any of its successors, or any of their registered assigns.

     “LLC Agreement” means that certain Amended and Restated Limited Liability Company Agreement
of the Company dated as of June 8, 2007.

     “NASD” means the National Association of Securities Dealers, Inc., or any successor
thereto.

     “NASDAQ” means the automated quotation system of the NASD.

     “Person” means any individual, sole proprietorship, partnership, limited liability company,
joint venture, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, entity or government (whether federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency, body or department
thereof).

     “Preferred Return” has the meaning set forth in the LLC Agreement.

2

 

     “Required Holders” means the holders of the TFD Class C Warrants exercisable for in excess
of 50% of the aggregate number of Warrant Units then purchasable upon exercise of all TFD Class C
Warrants.

     “SEC” means the U.S. Securities and Exchange Commission, or any successor thereto.

     “Securities Act” means the Securities Act of 1933, as amended, and all rules and
regulations promulgated thereunder.

     “Threshold Date” means the date that the Class B Members have received distributions from
the Company equal to the sum of the amounts contributed by the Class B Members to the Company and
the Preferred Return.

     “Transfer” means any direct or indirect transfer, assignment, sale, gift, inter vivos
transfer, pledge, hypothecation, mortgage, hedge, other encumbrance, or any other disposition
(whether voluntary or involuntary or by operation of law, and whether or not for value), of this
Warrant or the Warrant Units (or any interest (pecuniary or otherwise) therein or right thereto),
including without limitation, derivative or similar transactions or arrangements whereby a portion
or all of the economic interest in, or risk of loss or opportunity for gain with respect to, this
Warrant or the Warrant Units are transferred or shifted to another Person, intestate succession,
upon termination of a trust, or as a result of or in connection with any property settlement or
judgment incident to a divorce, dissolution of marriage or separation (including by decree or other
court order).

     “Warrant” means this Warrant and all warrants issued upon transfer, division or combination
of, or in substitution for, this Warrant. All Warrants shall at all times be identical as to terms
and conditions and date, except as to the number of Warrant Units for which they may be exercised.

     “Warrant Price” means an amount equal to (i) the number of Warrant Units being purchased
upon exercise of this Warrant pursuant to Section 2.1, multiplied by (ii) the Exercise Price as of
the date of such exercise.

     “Warrant Units” means the Class C Units issued or issuable upon the exercise of this
Warrant or any other TFD Class C Warrant.

II. EXERCISE OF WARRANT

     2.1 Exercise Period. This Warrant will be exercisable at any time after the Threshold Date
until 5:00 p.m., New York time, on the Expiration Date (the “Exercise Period”). During the
Exercise Period Holder may exercise this Warrant, on any Business Day, for all or any part of the
Warrant Units.

     2.2
Exercise Notice; Delivery of Certificates. In order to exercise this Warrant, Holder
shall deliver to the Company at its principal office designated by the Company in Section 18.2, a
duly executed written notice, of Holder’s election to exercise this Warrant, specifying the number
of Class C Units to be purchased, in substantially the form attached hereto as Exhibit A
(the “Subscription Notice”), and a duly executed Addendum Agreement in substantially the
form attached hereto as Exhibit B (the “Addendum Agreement”). In addition, as soon
as practicable after the delivery of a Subscription Notice, but subject to the receipt of any
necessary regulatory approvals (including expiration of any applicable waiting period), Holder
shall deliver to the Company at the aforementioned address, (i) payment of
the Warrant Price pursuant to Section 2.3, and (ii) this Warrant. Upon receipt of a Subscription
Notice and the Addendum Agreement, the Company shall, as promptly as practicable, and, subject to
receipt of any necessary regulatory approvals (including expiration of any applicable waiting
period), in any event within five (5)

3

 

Business Days thereafter, deliver to Holder the Addendum Agreement duly executed by the Company and
shall also provide evidence of the admission of Holder as a member into the Company by listing
Holder on the Company’s Register of Members. Subject to Article IX, Holder shall be deemed to have
become a holder of record of such Warrant Units for all purposes, as of the date on which the
Subscription Notice, the Addendum Agreement and payment of the Warrant Price pursuant to any one of
the options set forth in Section 2.3 have all been received by the Company and all taxes required
to be paid by Holder, if any, pursuant to Section 2.4 have been paid. If this Warrant shall have
been exercised in part, the Company shall deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the remaining Warrant Units issuable upon exercise of this Warrant, which new
Warrant shall in all other respects be identical with this Warrant, or appropriate notation may be
made on this Warrant and the same returned to Holder. Notwithstanding the foregoing, if in
connection with the exercise of a Warrant or acquisition of Warrant Units by Holder, any regulatory
approval shall be required, including expiration of any applicable waiting period, then, if the
Warrant is exercised prior to such approval, the Expiration Date shall be extended while any such
regulatory approval or waiting period is pending and, upon the provision by Holder to the Company
of a Subscription Notice and the Addendum Agreement, any payment of the Warrant Price shall be paid
promptly following receipt of such approval.

     2.3 Payment of Warrant Price. Payment of the Warrant Price shall be made at the option of
Holder by:

(a) cash (by check) or by wire transfer;

(b) cancellation by Holder of indebtedness of the Company to Holder; or

(c) any combination thereof, duly endorsed by or accompanied by a Subscription Notice,
substantially in the form attached hereto as Exhibit A, and Addendum Agreement, substantially in
the form attached hereto as Exhibit B.

     2.4 Payment of Taxes. The Company shall pay all expenses, taxes and other governmental charges with
respect to the issuance or delivery of the Warrant Units. The Company shall not be required,
however, to pay any transfer tax or other similar charge imposed in connection with the issuance of
any certificate for Warrant Units in any name other than that of Holder, and in such case the
Company shall not be required to issue or deliver any certificate until such tax or other charge
has been paid or it has been established to the satisfaction of the Company that no such tax or
other charge is due.

     2.5 Certain Restrictions. The Company hereby acknowledges that the exercise of this Warrant
by Holder may subject the Company and/or Holder to the filing
requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the “HSR Act”). If on or before the
Expiration Date, Holder has sent the Subscription Notice and Addendum Agreement to the Company and
Holder has not been able to complete the exercise of this Warrant prior to the Expiration Date
because of restrictions under the HSR Act, Holder shall be entitled to complete the process of
exercising this Warrant in accordance with the procedures contained herein notwithstanding the fact
that completion of the exercise of this Warrant would take place after the Expiration Date.

III. TRANSFER, DIVISION AND COMBINATION

     3.1 Transfer. Subject to compliance with Article IX of this Warrant, the Company shall
register any Transfer of this Warrant and all rights hereunder, in whole or in part, on the books
of the Company to be maintained for such purpose, upon surrender by Holder of this Warrant at the
principal office of the Company referred to in Section 2.2, together with a duly executed written
assignment of this

4

 

Warrant substantially in the form of Exhibit C hereto and funds sufficient to pay any
transfer taxes payable upon the making of such Transfer. Promptly following such surrender and, if
required, such payment, the Company shall at its expense, subject to Article IX, execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination
specified in such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned in compliance with Article IX, may be exercised by a new
Holder for the purchase of Warrant Units without having a new Warrant issued.

     3.2 Division and Combination. Subject to Article IX, this Warrant may be divided or
combined with other Warrants upon presentation hereof at the aforesaid office or agency of the
Company, together with a duly executed written notice specifying the names and denominations in
which new Warrants are to be issued. Subject to compliance with Section 3.1 and with Article IX as
to any Transfer which may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.

     3.3 Maintenance of Books. The Company agrees to maintain, at its aforesaid office or
agency, books for the registration and the registration of Transfer of the Warrants.

IV. RESTRICTIONS AGAINST ISSUANCE OF

ADDITIONAL CLASS C UNITS

     Except for the TFD Class C Warrants being issued pursuant to the Securities Purchase Agreement, and
the Class C Units to be issued upon exercise thereof, the Company shall not issue any Additional
Class C Units or Convertible Security without the prior written consent of the Required Holders,
which may be given or withheld upon such terms as they deem appropriate in their sole discretion.

V. NOTICES TO WARRANT HOLDERS

     5.1 Notice of Threshold Date. The Company shall promptly notify Holders of the Threshold
Date, which notice shall in any event be given within five (5) Business Days after the occurrence
of the Threshold Date.

     5.2 Notice of Corporate Action. If at any time:

(a) the Company shall take a record of the holders of its Class C Units for the purpose of
entitling them to receive a distribution;

(b) there shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital Class C Units of the Company or any consolidation or merger of the
Company with, or any sale, transfer or other disposition of all or substantially all the property,
assets or business of the Company to, another corporation; or

(c) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the
Company;

then, in any one or more of such cases, the Company shall give to Holder advance prior written
notice of the date on which a record date shall be selected in respect of
such event. Such notice shall also specify (i) the date on which the holders of Class C Units shall
be entitled to any such distribution or right, and

5

 

the amount and character thereof and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or
winding up is to take place and the time, if any such time is to be fixed, as of which the holders
of Class C Units shall be entitled to exchange their Warrant Units for securities or other property
deliverable upon such event.

VI. NO IMPAIRMENT

     Company shall not by any action, including, without limitation, amending its certificate of
organization or through any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder against impairment. Without limiting the generality of
the foregoing, the Company will take all such action as may be necessary or appropriate in order
that the Company may upon the exercise of this Warrant validly and legally issue fully paid and
nonassessable Class C Units that are not subject to preemptive rights. The Company will obtain all
such authorizations, exemptions or consents from any Governmental Authority having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

VII. RESERVATION AND AUTHORIZATION OF CLASS C UNITS

     From and after the date of this Warrant, the Company shall at all times reserve and keep available
for issue upon the exercise of Warrants such number of its authorized but unissued Class C Units as
will be sufficient to permit the exercise in full of all outstanding Warrants. All Class C Units
which shall be so issuable, when issued upon exercise of any Warrant and payment therefor in
accordance with the terms of such Warrant, shall be duly and validly issued and fully paid and
nonassessable, and not subject to preemptive rights.

VIII. TAKING OF RECORD; CLASS C UNITS AND WARRANT TRANSFER OF BOOKS

     In the case of all distributions by the Company to the holders of its Class C Units with respect to
which any provision of Article IV refers to the taking of a record of such holders, the Company
will take such record as of the close of business on a Business Day. The Company will not at any
time, except upon dissolution, liquidation or winding up of the Company, close its transfer books
so as to prevent or delay the exercise or transfer of any Warrant.

IX. RESTRICTIONS ON TRANSFERABILITY

     The Warrants and the Warrant Units shall not be Transferred before satisfaction of the conditions
specified in this Article IX, which conditions are intended to ensure compliance with the
provisions of the LLC Agreement and the Securities Act with respect to the Transfer of any Warrant
or any Warrant Unit. Holder, by acceptance of this Warrant, agrees to be bound by the provisions of
this Article IX.

     9.1 Compliance With LLC Agreement. The LLC Agreement restricts the transfer of this Warrant
or any Warrant Units to any Person other than a Permitted Transferee (as defined in the LLC
Agreement) or as otherwise expressly permitted by Article V of the LLC Agreement. Transfers which
are not made in strict
compliance with Article V of the LLC Agreement (including without limitation, the conditions of
transfer set forth in Section 5.2 thereof, the right of first offer set forth in Section 5.3
thereof and the other sections thereof described elsewhere in this Warrant) shall be null and void
and of no force and effect.

6

 

     9.2 Restrictive Legend.

     Except as otherwise provided in this Article IX, each certificate for Class C Units (if
certificates are to be issued in accordance with the terms of the LLC Agreement) initially issued
upon the exercise of this Warrant, and each certificate (if any) for Class C Units issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise imprinted with a
legend in substantially the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND MAY NOT BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER
THE SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE (AND, IN SUCH CASE, AS
REASONABLY REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE BOARD OF
DIRECTORS SHALL HAVE BEEN DELIVERED TO THE COMPANY TO THE EFFECT THAT SUCH OFFER OR SALE IS NOT
REQUIRED TO BE REGISTERED UNDER THE SECURITIES ACT). THIS SECURITY IS SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OTHER TERMS AND CONDITIONS SET FORTH IN (X) THE AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF THE FILM DEPARTMENT HOLDINGS LLC (“LLC AGREEMENT”),
AND (X) THE OTHER TRANSACTION DOCUMENTS DESCRIBED IN THE LLC AGREEMENT, IN EACH SUCH CASE, AS
AMENDED FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.”

     9.3 Termination of Restrictions. The restrictions and requirements imposed by Section 9.2
shall terminate as to any particular Warrant or Warrant Units (a) when and so long as such security
shall have been effectively registered under the Securities Act, (b) when the Company shall have
received an opinion of counsel (which may be Holder’s inside corporate counsel) that such
securities may be transferred without registration thereof under the Securities Act or (c) the sale
of such securities has been made pursuant to SEC Rule 144. Whenever the restrictions imposed by
Article IX shall terminate as to this Warrant, as hereinabove provided, Holder shall be entitled to
receive from the Company, at the expense of the Company, a new Warrant without the restrictive
legend set forth in Section 9.2). Whenever the restrictions imposed by this Section 9.2 shall
terminate as to any Class C Units, as hereinabove provided, the holder thereof shall be entitled to
receive from the Company, at the expense of the Company, a new certificate representing such Class
C Units not bearing the restrictive legend set forth in Section 9.2).

X. SUPPLYING INFORMATION

     Company shall cooperate with each holder of a Warrant and each holder of Warrant Units in supplying
such information as may be reasonably necessary for such holder to complete and file any
information reporting forms presently or hereafter required by the SEC or any other governmental
entity as a condition to the availability of an exemption from the registration requirements of the
Securities Act for the sale of any Warrant or Warrant Units. The Company shall also supply such information as
may be reasonably necessary for such holder to comply with tax, accounting and other applicable
law.

7

 

XI. LOSS OR MUTILATION

     Upon receipt by the Company from any holder of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of this Warrant and indemnity
reasonably satisfactory to it (it being understood that the written agreement of Holder shall be
sufficient indemnity), and in case of mutilation upon surrender and cancellation hereof, the
Company will execute and deliver in lieu hereof a new Warrant of like tenor to such holder;
provided, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable
form is surrendered to the Company for cancellation.

XII. LIMITATION OF LIABILITY

     No provision hereof, in the absence of affirmative action by Holder to purchase Warrant Units, and
no enumeration herein of the rights or privileges of Holder hereof, shall give rise to any
liability of such Holder for the purchase price of any Class C Units or as a membership interest
holder of the Company, whether such liability is asserted by the Company, by creditors of the
Company or by any third party.

XIII. TAG-ALONG RIGHTS

     The holder of this Warrant is subject to the “Tag-Along” rights set forth in Section 5.7 of the LLC
Agreement.

XIV. DRAG-ALONG RIGHTS

     The holder of this Warrant is subject to the “Drag-Along” provisions set forth in Section 5.6 of
the LLC Agreement.

XV. VOTING RIGHTS

     Upon exercise of this Warrant, the holder of the Warrant Units shall have such voting rights as a
member of the Company as are set forth in the LLC Agreement.

XVI. REGISTRATION RIGHTS

     Upon exercise of this Warrant, the holder of Warrant Units shall have such registration rights as
are set forth in Section 5.9 of the LLC Agreement.

XVII. DISTRIBUTIONS; TAX ALLOCATIONS

     Prior to, and upon, exercise of this Warrant, the holder of Warrant Units shall have the right to
receive the distributions payable to holders of Class C Units as set forth in Sections 7.4 and 11.3
of the LLC Agreement and to receive allocations of income, gain, loss or deductions as set forth in
Articles VII and XI of the LLC Agreement.

XVIII. MISCELLANEOUS

     18.1 Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any
right hereunder on the part of Holder shall operate as a waiver of such right or otherwise
prejudice Holder’s rights, powers or remedies. If the Company fails to make, when due, any payments
provided for under this Warrant, or fails to comply with any other provision of this Warrant, the
Company shall pay to

8

 

Holder such amounts as shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.

     18.2 Notices. All notices and communications to be given or made under this Warrant shall
be in writing and delivered by hand-delivery, registered first class mail (return receipt
requested), facsimile, or air courier guaranteeing overnight delivery, addressed as follows, or to
such other Person or address as the party named below may designate by notice:

(a) If to Holder, at its last known address appearing on the books of the Company maintained for
such purpose and any other address sent by Holder to the Company in compliance with this Section
18.2.

(b) If to the Company, at:

The Film Department Holdings LLC

8439 Sunset Boulevard, 2nd Floor

West Hollywood, California 90069

Attention: Mr. Mark Gill and Mr. Neil Sacker

Telecopy: (866) 311-4894

Each such notice or other communication shall be deemed to have been duly given or served on the
date on which personally delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback, or three (3) Business Days after the same shall have been deposited in the United
States mail.

     18.3 Successors and Assigns. Subject to the provisions of Section 3.1 and Article IX, this
Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and assigns of Holder. The provisions of this Warrant
are intended to be for the benefit of all holders from time to time of this Warrant and shall be
enforceable by any such holder. No other Person shall have any right, benefit or obligation under
this Warrant.

     18.4 Amendment. No amendment or waiver of any provision of this Warrant or any other
Warrant shall be effective without the written consent of the Company and all of the Required
Holders of the TFD Class C Warrants, which amendments shall become effective upon notice of such
amendments to all holders of the TFD Class C Warrants (which notice the Company commits to
provide).

     18.5 Severability. If one or more provisions of this Warrant are held to be unenforceable
to any extent under applicable law, such provision shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by law so as to effectuate the parties’ intent to
the maximum extent, and the balance of this Warrant shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its terms to the maximum extent permitted
by law.

     18.6 Section and Other Headings. The section and other headings contained in this Warrant
are for the convenience of the parties only and shall not affect the meaning or interpretation of
this Warrant.

     18.7 Governing Law. This Warrant shall be governed by, construed and enforced in accordance
with the laws of the State of New York, without regard to the conflict of law principles of such
state.

9

 

     18.8 Waiver of Jury Trial. Each party hereto hereby irrevocably waives trial by jury in any
suit, action or proceeding with respect to, or directly or indirectly arising out of, under or in
connection with, the Warrant or the transactions contemplated herein or related hereto (whether
founded in contract, tort or any other theory). Each party hereto (A) certifies that the other
party has not represented, expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (B) acknowledges that it and the other party
hereto have been induced to enter into the Warrant by the mutual waivers and certifications in this
Section 18.8.

     18.9 Covenant Regarding Consent. The Company covenants to use its best efforts upon the
request of Holder to seek any waivers or consents, or to take any other action required, to
effectuate the exercise of this Warrant by Holder.

     18.10 Remedies. Holder, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance of its rights under
this Warrant. The Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law would be adequate. In
any action or proceeding brought to enforce any provision of this Warrant or where any provision
hereof is validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys’ fees in addition to any other available remedy.

     18.11 Counterparts. For the convenience of the parties, any number of counterparts of this
Warrant may be executed by the parties hereto and each such executed counterpart shall be, and
shall be deemed to be, an original instrument.

[SIGNATURES BEGIN ON NEXT PAGE]

10

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed.

Dated:                                         , 2007

	 	 	 	 	 
	 	THE FILM DEPARTMENT HOLDINGS LLC

 	 
	 	By:  	 	 
	 	 	Mark Gill, Chief Executive Officer 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Neil Sacker, President & Chief Operating Officer 	 
	 	 	 	 
	 

ACCEPTANCE

     The undersigned Holder, acting through its authorized representative, hereby accepts and agrees to
the terms of this Warrant.

	 	 	 	 	 
	 	[Name of Holder]

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 	Its:  	 	 
	 	 	 	 
	 	 	 	 
	 

 

 

EXHIBIT A

SUBSCRIPTION NOTICE

[To be executed only upon exercise of Warrant]

     The undersigned registered owner of this Warrant irrevocably exercises this Warrant for the
purchase of           Class C Units of the Company and herewith makes payment therefor, all at the price and
on the terms and conditions specified in this Warrant. Concurrent with the delivery of this
Subscription Notice, the undersigned also is executing and delivering to the Company an Addendum
Agreement in the form attached as Exhibit B to the Warrant to Purchase Class C Units of the
Company. The undersigned requests that the Company admit the undersigned as a member, issue to the
undersigned (whose address is                                         ) such Class C Units and deliver
certificates, if any, evidencing such Class C Units, together with evidence of the undersigned’s
admission as a member into the Company by the delivery of an updated Register of Members and, if
such Class C Units shall not include all of the Class C Units issuable as provided in this Warrant,
that a new Warrant of like tenor and date for the balance of the Warrant Units issuable hereunder
be delivered to the undersigned.

     The undersigned shall tender payment in the following form as provided for in Section 2.3 of this
Warrant:                                         .

	 	 	 	 	 

	Date:                     , 20               
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name of Registered Owner)
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	(Signature of Registered Owner)
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	(Street Address)
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	(City)                                (State)                                           (Zip Code)

	 	 	 

	NOTICE:

	 	The signature on this subscription must correspond with the name as written upon the face
of the within Warrant in every particular, without alteration or enlargement or any change
whatsoever.

A-1

 

EXHIBIT B

ADDENDUM AGREEMENT

     This Addendum Agreement is made this ___ day of                     , 200 ___, by and between
                                         (the “Exercising Warrant Holder”), and The Film
Department Holdings LLC, a Delaware limited liability company (the “Company”), pursuant to
the terms of that certain Amended and Restated Limited Liability Company Agreement of the Company
dated as of June 8, 2007, including all exhibits and schedules thereto (the “Agreement”).
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in
the Agreement.

WITNESSETH:

     WHEREAS, the Company, the Members and the Warrant Holders entered into the Agreement
(and their respective spouses, to the extent applicable, have consented to the provisions of the
Agreement) to impose certain restrictions and obligations upon themselves, and to provide certain
rights, with respect to the Company, the Members, the Warrant Holders and its and their Units;

     WHEREAS, the Exercising Warrant Holder is acquiring Units to be issued by the Company, in
accordance with the Agreement; and

     WHEREAS, the Company, the Members and the Warrant Holders have required in the Agreement that all
Persons to whom Units of the Company are transferred and all other Persons acquiring Units must
enter into an Addendum Agreement binding the Exercising Warrant Holder and the Exercising Warrant
Holder’s spouse to the Agreement to the same extent as if they were original parties thereto and
imposing the same restrictions and obligations on the Exercising Warrant Holder, the Exercising
Warrant Holder’s spouse and the Units to be acquired by the Exercising Warrant Holder as are
imposed upon the Members or Warrant Holders under the Agreement.

     NOW, THEREFORE, in consideration of the mutual promises of the parties and as a condition of the
purchase or receipt by the Exercising Warrant Holder of the Units, the Exercising Warrant Holder
acknowledges and agrees as follows:

     1. The Exercising Warrant Holder has received and read the Agreement and acknowledges that the
Exercising Warrant Holder is acquiring the Units in accordance with and subject to the terms and
conditions of the Agreement.

     2. The Exercising Warrant Holder represents and warrants, as of the date hereof, to the Company and
the Members as follows:

	 	a.	 	the Exercising Warrant Holder has full power and authority to execute and deliver this Agreement
and to perform its obligations hereunder, and, if such Exercising Warrant Holder is not executing
this Agreement in its individual capacity, the execution, delivery, and performance by such
Exercising Warrant Holder of this Agreement have been duly authorized by all necessary action;
	 
	 	b.	 	this Agreement has been duly and validly executed and delivered by such Exercising Warrant
Holder and constitutes the binding obligation of such Exercising Warrant Holder enforceable against
such Person in accordance with its terms, subject to applicable bankruptcy, insolvency or other
similar laws

B-1

 

	 	 	 	relating to or affecting the enforcement of creditors’ rights generally and to general principles
of equity;
	 
	 	c.	 	the execution, delivery, and performance by such Exercising Warrant Holder of this Agreement
will not, with or without the giving of notice or the lapse of time, or both, (i) violate any
provision of law to which such Person is subject, (ii) violate any order, judgment, or decree
applicable to such Person, or (iii) conflict with, or result in a breach or default under, any
agreement or other instrument to which such Person is a party or, if such Exercising Warrant Holder
is not executing this Agreement in its individual capacity, any term or condition of its
certificate of incorporation or by-laws, certificate of limited partnership or partnership
agreement, certificate of formation or limited liability company agreement, as applicable, except
where such conflict, breach or default would not reasonably be expected to, individually or in the
aggregate, have an adverse effect on such Person’s ability to satisfy its obligations hereunder;
	 
	 	d.	 	no consent, approval, permit, license, order or authorization of, filing with, or notice or
other action to, with or by any Governmental Authority or any other Person, is necessary, on the
part of such Exercising Warrant Holder to perform its obligations hereunder or, if such Exercising
Warrant Holder is not executing this Agreement in its individual capacity, to authorize the
execution, delivery and performance by such Exercising Warrant Holder of its obligations hereunder,
except where such consent, approval, permit, license, order, authorization, filing or notice would
not reasonably be expected to, individually or in the aggregate, have an adverse effect on such
Exercising Warrant Holder’s ability to satisfy its obligations hereunder or under any agreement or
other instrument to which such Exercising Warrant Holder is a party;
	 
	 	e.	 	such Exercising Warrant Holder is acquiring the Units for investment and not with a view toward
any resale or distribution thereof except in compliance with the Securities Act; such Exercising
Warrant Holder acknowledges that the Units have not been registered pursuant to the Securities Act
and may not be transferred in the absence of such registration or an exemption therefrom under the
Securities Act; and such Exercising Warrant Holder has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the risks of its investment in the
Units and is capable of bearing the economic risks of the transactions contemplated by this
Agreement; and
	 
	 	f.	 	such Exercising Warrant Holder does not have any liability or obligation to pay fees or
commissions to any broker, finder, or agent with respect to the execution,
delivery or performance of this Agreement by such Exercising Warrant Holder.

     3. The Exercising Warrant Holder makes the representations and warranties set out in Section 4.1(a)
of the Agreement and agrees that the Units acquired or to be acquired by the Exercising Warrant
Holder are bound by and subject to all of the terms and conditions of the Agreement, and hereby
joins in, and agrees to be bound, by, and shall have the benefit of, all of the terms and
conditions of the
Agreement to the same extent as if the Exercising Warrant Holder were an original party to the
Agreement. This Addendum Agreement shall be attached to and become a part of the Agreement.

     4. The Exercising Warrant Holder hereby agrees to accept the Units and hereby agrees and consents
to become a Member.

B-2

 

     5. Any notice required as permitted by the Agreement shall be given to Exercising Warrant Holder at
the address listed beneath the Exercising Warrant Holder’s signature below.

     6. The spouse of the Exercising Warrant Holder, if applicable, joins in the execution of this
Addendum Agreement to acknowledge its fairness and that it is in such spouse’s best interests, and
to bind such spouse’s community interest, if any, in the Units to the terms of the Agreement.

     7. This Addendum Agreement shall be governed by and construed in accordance with Delaware law.

	 	 	 	 	 	 	 	 	 

	 	 	 	 	 
	Exercising Warrant Holder	 	 	 	 	 	Exercising Warrant Holder’s Spouse
	 
	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	AGREED TO on behalf of the Company:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	THE FILM DEPARTMENT HOLDINGS LLC
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:

	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:

B-3

 

EXHIBIT C

ASSIGNMENT FORM

     FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned under this Warrant,
with respect to the number of Class C Units set forth below:

	 	 	 

	Name and Address of Assignee

	 	No. of Class C Units

and does hereby irrevocably constitute and appoint                                          attorney-in-fact
to register such transfer on the books of the Company maintained for the purpose, with full power
of substitution in the premises.

	 	 	 	 	 

	Dated:                     

	 	Print Name:	 	 
	 

	 	 	 	 
	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 
	 

	 	Witness:	 	 
	 

	 	 	 	 

	 	 	 

	NOTICE:

	 	The signature on this assignment must correspond with the name as written upon the face of
the within Warrant in every particular, without alteration or enlargement or any change whatsoever.

CB-4

 

EXHIBIT C

FORM OF NOTATION OF GUARANTY

[REVERSE OF NOTE]

For value received, each Guarantor (which term includes any successor Person under the Guaranty and
Security Agreement (as defined below)) has, jointly and severally, unconditionally guaranteed, to
the extent set forth in the Guaranty and Security Agreement dated as of June 27, 2007 (as amended,
restated, supplemented or otherwise modified, the “Guaranty and Security Agreement”)
executed by The Film Department LLC, a Delaware limited liability company (the “Company”)
and the subsidiaries and affiliates of the Company party thereto in favor of General Electric
Capital Corporation, as collateral agent, and the other secured parties referred to therein, (a)
the full and punctual payment when due, whether at maturity, by acceleration, by redemption or
otherwise, of the principal of, premium, if any, and interest on the Notes and all other
obligations and liabilities of the Company incurred in connection therewith (including without
limitation interest accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceedings, relating to the Company or any Guarantor
whether or not a claim for post-filing or post-petition interest is allowed in such proceeding).
The obligations of the Guarantors to the Holders of Notes and to the Collateral Agent are expressly
set forth in the Guaranty and Security Agreement and reference hereby is made thereto for the
precise terms of the Guaranty and Security Agreement, which terms are incorporated herein by
reference.

     IN WITNESS WHEREOF, each of the undersigned has caused this Notation of Guaranty to be duly
executed.

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

CB-5

 

 EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

FORM OF COMPLIANCE CERTIFICATE

                                        ,                     1

          This certificate is delivered pursuant to Section 6.1(c) of, and in connection with the
consummation of the transactions contemplated in, the Securities Purchase Agreement, dated as of
June 27, 2007 (as the same may be 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, as one of the Guarantors, the Purchasers named therein and General
Electric Capital Corporation, as collateral agent for the Secured Parties referred to therein (the
“Collateral Agent”). Capitalized terms used herein and not otherwise defined herein are
used herein as defined in the Credit Agreement.

          The undersigned, a duly authorized Responsible Officer of the Company having the name and title set
forth below under his signature, hereby certifies, on behalf of the Company for the benefit of the
Secured Parties and pursuant to Section 6.1 of the Securities Purchase Agreement that such
Responsible Officer of the Company is familiar with the Securities Purchase Agreement and that, in
accordance with each of the following sections of the Securities Purchase Agreement, each of the
following is true on the date hereof, both on or before the date hereof:

     (a) In accordance with Section 6.1[(a)/(b)] of the Securities Purchase Agreement, attached
hereto as Annex A are the Financial Statements for the [Fiscal Quarter/Fiscal Year] ended
___, ___ required to be delivered pursuant to Section 6.1 [(a)/(b)] of the Securities
Purchase Agreement. Such Financial Statements fairly present in all material respects the
Consolidated financial position, results of operations and cash flows of Holdings as at the dates
indicated therein and for the periods indicated therein in accordance with GAAP [(subject to the
absence of footnote disclosure and normal year-end audit
adjustments)]2 [without qualification as
to the scope of the audit or as to going concern and without any other similar qualification,
together with the certificate from the Group Members’ Accountants with respect to such Consolidated
Financial Statements required to be delivered pursuant to Section 6.1(b) of the Securities
Purchase Agreement. The examination by the Borrower’s Accountants in connection with such Financial
Statements has been made in accordance with the standards of the United States’ Public Company
accounting Oversight Board (or any successor
entity).]3

     (b) In accordance with Section 6.1(c) of the Securities Purchase Agreement, no Default or
Event of Default is continuing as of the date hereof[, except as provided for

 

			
	1	 	Insert date of delivery of certificate.
	 
	2	 	Insert language in brackets only for quarterly reports.
	 
	3	 	Insert language in brackets only for annual certifications.

 

 

on Annex B attached hereto, with respect to each of which the Company proposes to take the actions
set forth on Annex B].

     (c) In accordance with Section 6.1(d) of the Securities Purchase Agreement, (i) the [Corporate
Chart attached hereto as Annex C[-1]] [last Corporate Chart delivered pursuant to such Section)],
is correct and complete as of the date hereof, (ii) all documents required to be delivered pursuant
to the Note Documents by any Note Party in the preceding Fiscal Quarter have been delivered
thereunder (or such delivery requirement was otherwise duly waived or extended) and (iii) complete
and correct copies of all documents modifying any term of any Constituent Document of any Group
Member or any Subsidiary or joint venture thereof on or prior to the date hereof have been
delivered to the Purchasers [or are attached hereto as Annex C[-2]].

     (d) In accordance with Section 6.1(f) of the Securities Purchase Agreement, attached hereto as
Annex D is a discussion and analysis of the financial condition and results of operations of the
Group Members for the portion of the Fiscal Year elapsed on or prior to the date hereof discussing
the reasons for any significant variations from the Projections for such period and the figures for
the corresponding period in the previous Fiscal Year.

     (e) [In accordance with Sections 6.1(g) and (h) of the Securities Purchase Agreement, attached
hereto as Annexes E and E are complete and correct (i) copies of each management letter, audit
report or similar letter or report received by any Group Member from any independent registered
certified public accountant (including the Group Members’ Accountants) in connection with such
Financial Statements or any audit thereof and (ii) a summary of all material insurance coverage
maintained as of the date thereof by any Group Member4].5

          IN WITNESS WHEREOF, the undersigned has executed this certificate on the date
first written above.

	 	 	 	 	 
	 	 	 
	 	  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

			
	4	 	Insert other information reasonably required by the Administrative Agent.
	 
	5	 	Insert bracketed language only for annual reports.

[SIGNATURE PAGE TO COMPLIANCE CERTIFICATE DATED                     ,                    ]

 

 

ANNEX A

TO

COMPLIANCE CERTIFICATE OF THE FILM DEPARTMENT LLC

DATED                     ,          

FINANCIAL STATEMENTS

 

 

[ANNEX B

TO

COMPLIANCE CERTIFICATE OF THE FILM DEPARTMENT LLC

DATED                     ,           

CONTINUING DEFAULTS]6

 

6        Delete if not used in the text of the certificate.

 

 

ANNEX C[-1]

TO

COMPLIANCE CERTIFICATE OF THE FILM DEPARTMENT LLC

DATED                     ,           

CORPORATE CHART

 

 

ANNEX C[-2]

TO

COMPLIANCE CERTIFICATE OF THE FILM DEPARTMENT LLC

DATED                     ,           

MODIFICATIONS TO CONSTITUENT DOCUMENTS

 

 

ANNEX D

TO

COMPLIANCE CERTIFICATE OF THE FILM DEPARTMENT LLC

DATED                     ,           

MANAGEMENT DISCUSSION AND ANALYSIS

 

 

ANNEX E

TO

COMPLIANCE CERTIFICATE OF THE FILM DEPARTMENT LLC

DATED                     ,           

MANAGEMENT LETTERS

 

 

ANNEX F

TO

COMPLIANCE CERTIFICATE OF THE FILM DEPARTMENT LLC

DATED                     ,           

SUMMARY OF MATERIAL INSURANCE COVERAGE

 

 

EXHIBIT E

FORM OF GUARANTY AND SECURITY AGREEMENT

 

 

 

GUARANTY AND SECURITY AGREEMENT

(SECURITIES PURCHASE AGREEMENT)

(SECOND LIEN)

Dated as of June 27, 2007

among

THE FILM DEPARTMENT LLC

and

Each Grantor

From Time to Time Party Hereto

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Collateral Agent

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page	 
	ARTICLE I DEFINED TERMS	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 1.1	 	Definitions	 	 	1	 
	 
	 	Section 1.2	 	Certain Other Terms	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II GUARANTY	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 2.1	 	Guaranty	 	 	7	 
	 
	 	Section 2.2	 	Limitation of Guaranty	 	 	7	 
	 
	 	Section 2.3	 	Contribution	 	 	7	 
	 
	 	Section 2.4	 	Authorization; Other Agreements	 	 	7	 
	 
	 	Section 2.5	 	Guaranty Absolute and Unconditional	 	 	8	 
	 
	 	Section 2.6	 	Waivers	 	 	9	 
	 
	 	Section 2.7	 	Reliance	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III GRANT OF SECURITY INTEREST	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 3.1	 	Collateral	 	 	9	 
	 
	 	Section 3.2	 	Grant of Security Interest in Collateral	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 4.1	 	Title; No Other Liens	 	 	10	 
	 
	 	Section 4.2	 	Perfection and Priority	 	 	10	 
	 
	 	Section 4.3	 	Jurisdiction of Organization; Chief Executive Office	 	 	11	 
	 
	 	Section 4.4	 	Locations of Inventory, Equipment and Books and Records	 	 	11	 
	 
	 	Section 4.5	 	Pledged Collateral	 	 	11	 
	 
	 	Section 4.6	 	Instruments and Tangible Chattel Paper Formerly Accounts	 	 	11	 
	 
	 	Section 4.7	 	Intellectual Property	 	 	12	 
	 
	 	Section 4.8	 	Commercial Tort Claims	 	 	12	 
	 
	 	Section 4.9	 	Specific Collateral	 	 	12	 
	 
	 	Section 4.10	 	Enforcement	 	 	12	 
	 
	 	Section 4.11	 	Representations and Warranties of the Securities Purchase Agreement	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V COVENANTS	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 5.1	 	Maintenance of Perfected Security Interest; Further Documentation and Consents	 	 	13	 
	 
	 	Section 5.2	 	Changes in Locations, Name, Etc	 	 	13	 
	 
	 	Section 5.3	 	Pledged Collateral	 	 	14	 
	 
	 	Section 5.4	 	Accounts	 	 	14	 
	 
	 	Section 5.5	 	Commodity Contracts	 	 	14	 
	 
	 	Section 5.6	 	Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper	 	 	15	 
	 
	 	Section 5.7	 	Intellectual Property	 	 	15	 
	 
	 	Section 5.8	 	Notices	 	 	16	 
	 
	 	Section 5.9	 	Notice of Commercial Tort Claims	 	 	16	 
	 
	 	Section 5.10	 	Physical Properties and the Laboratory	 	 	17	 
	 
	 	Section 5.11	 	Compliance with Securities Purchase Agreement	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI REMEDIAL PROVISIONS	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 6.1	 	Code and Other Remedies	 	 	17	 

i

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page	 
	 
	 	Section 6.2	 	Accounts and Payments in Respect of General Intangibles	 	 	20	 
	 
	 	Section 6.3	 	Pledged Collateral	 	 	21	 
	 
	 	Section 6.4	 	Proceeds to be Turned over to and Held by Collateral Agent	 	 	21	 
	 
	 	Section 6.5	 	Registration Rights	 	 	22	 
	 
	 	Section 6.6	 	Deposit Accounts; Securities Accounts	 	 	22	 
	 
	 	Section 6.7	 	Deficiency	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII THE COLLATERAL AGENT	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 7.1	 	Collateral Agent’s Appointment as Attorney-in-Fact	 	 	23	 
	 
	 	Section 7.2	 	Authorization to File Financing Statements	 	 	24	 
	 
	 	Section 7.3	 	Authority of Collateral Agent	 	 	24	 
	 
	 	Section 7.4	 	Duty; Obligations and Liabilities	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII MISCELLANEOUS	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Section 8.1	 	Reinstatement	 	 	25	 
	 
	 	Section 8.2	 	Release of Collateral	 	 	25	 
	 
	 	Section 8.3	 	Independent Obligations	 	 	26	 
	 
	 	Section 8.4	 	No Waiver by Course of Conduct	 	 	26	 
	 
	 	Section 8.5	 	Amendments in Writing	 	 	26	 
	 
	 	Section 8.6	 	Additional Grantors; Additional Pledged Collateral	 	 	26	 
	 
	 	Section 8.7	 	Notices	 	 	27	 
	 
	 	Section 8.8	 	Successors and Assigns	 	 	27	 
	 
	 	Section 8.9	 	Counterparts	 	 	27	 
	 
	 	Section 8.10	 	Severability	 	 	27	 
	 
	 	Section 8.11	 	Governing Law	 	 	27	 
	 
	 	Section 8.12	 	Waiver of Jury Trial	 	 	27	 

ii

 

TABLE OF CONTENTS

ANNEXES AND SCHEDULES

	 	 	 

	Annex 1

	 	Form of Pledge Amendment
	Annex 2

	 	Form of Joinder Agreement
	Annex 3

	 	Form of Intellectual Property Security Agreement
	Annex 4

	 	Form of Laboratory Pledgeholder Agreement
	 
	 	 
	Schedule 1

	 	Filings
	Schedule 2

	 	Jurisdiction of Organization; Chief Executive Office
	Schedule 3

	 	Intellectual Property

iii

 

          GUARANTY AND SECURITY AGREEMENT, dated as of June 27, 2007, by The Film Department LLC, a
Delaware limited liability company (the “Company”), and each of the other entities listed
on the signature pages hereof or that becomes a party hereto pursuant
to Section 8.6 together with
the Company, the “Grantors”), in favor of General Electric Capital Corporation (“GE
Capital”) as collateral agent (in such capacity, together with its successors and permitted
assigns, the “Collateral Agent”) for the Holders and each other Secured Party (each as
defined in the Securities Purchase Agreement referenced below), and each other Secured Party.

W I T N E S S E T H:

          WHEREAS, pursuant to the Securities Purchase Agreement dated as of June 27, 2007 (as the same may
be 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
Purchasers named therein and GE Capital, as collateral agent for the Holders and other Secured
Parties referred to therein, the Company has issued and sold to the Purchasers named therein
$30,000,000 aggregate principal amount of its Secured Second Lien Notes due 2014 upon the terms and
subject to the conditions set forth therein;

          WHEREAS, each Grantor (other than the Company) has agreed to guaranty the Obligations (as defined
in the Securities Purchase Agreement) of the Company;

          WHEREAS, each Grantor will derive substantial direct and indirect benefits from the purchase by the
Purchasers of the notes to be issued and sold by the Company pursuant to the Securities Purchase
Agreement; and

          WHEREAS, it is a condition precedent to the obligation of the Purchasers to purchase the notes to
be issued and sold by the Company pursuant to the Securities Purchase Agreement that the Grantors
shall have executed and delivered this Agreement to the Collateral Agent;

          NOW, THEREFORE, in consideration of the premises and to induce the Purchasers and the Collateral
Agent to enter into the Securities Purchase Agreement and to induce the Holders to purchase the
notes to be issued and sold by the Company thereunder, each Grantor hereby agrees with the
Collateral Agent as follows:

ARTICLE I

DEFINED TERMS

     Section 1.1
Definitions. (a) Capitalized terms used herein without definition are used as
defined in the Securities Purchase Agreement.

          (b) The following terms have the meanings given to them in the UCC and terms used herein without
definition that are defined in the UCC have the meanings given to them in the UCC (such meanings to
be equally applicable to both the singular and plural forms of
the terms defined): “account”, “account debtor”, “as-extracted collateral”,
“certificated security”, “chattel paper”, “commercial tort claim”,
“commodity contract”, “deposit account”, “electronic chattel paper”,
“equipment”, “farm products”, “fixture”, “general intangible”,
“goods”, “health-care-insurance receivable”, “instruments”,
“inventory”, “investment property”, “letter-of-credit

 

 

right”, “proceeds”, “record”, “securities account”,
“security”, “supporting obligation” and “tangible chattel paper”.

          (c) The following terms shall have the following meanings:

          “Agreement” means this Guaranty and Security Agreement.

          “Applicable IP Office” means the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency within or outside the United States.

          “Collateral” has the meaning specified in Section 3.1.

          “Excluded Property” means, collectively, (i) any permit or license or any Contractual Obligation
entered into by any Grantor (A) that prohibits or requires the consent of any Person other than the
Company and its Affiliates as a condition to the creation by such Grantor of a Lien on any right,
title or interest in such permit, license or Contractual Agreement or any Stock or Stock Equivalent
related thereto or (B) to the extent that any Requirement of Law applicable thereto prohibits the
creation of a Lien thereon, but only, with respect to the prohibition in (A) and (B), to the
extent, and for as long as, such prohibition is not terminated or rendered unenforceable or
otherwise deemed ineffective by the UCC or any other Requirement of Law, (ii) any fixed or capital
asset owned by any Grantor that is subject to a purchase money Lien or a Capital Lease if the
Contractual Obligation pursuant to which such Lien is granted (or in the document providing for
such Capital Lease) prohibits or requires the consent of any Person other than the Company and its
Affiliates as a condition to the creation of any other Lien on such asset and (iii) any “intent to
use” Trademark applications for which a statement of use has not been filed (but only until such
statement is filed); provided, however, “Excluded Property” shall not
include (a) any proceeds, products, substitutions or replacements of Excluded Property (unless such
proceeds, products, substitutions or replacements would otherwise constitute Excluded Property) or
(b) any Film Collateral.

          “Film Collateral” means all right, title and interest of any Grantor in each Film and all
collateral, allied, ancillary, subsidiary and merchandising rights therein, and all properties and
things of value pertaining thereto and all products and proceeds thereof whether now in existence
or hereafter made, acquired or produced, in each case to the extent of any Grantor’s interest
therein, including, without limitation:

          (i) All rights of every kind and nature (including, without limitation, copyrights) in
and to any literary, musical or dramatic material of any kind or nature upon which, in
whole or in part, any Film is based, or from which it is adapted or inspired or that has
been used or included in such Film including, without limitation, all scripts,
screenplays, scenarios, teleplays, bibles, stories, treatments, novels, outlines, books,
titles, concepts, articles, manuscripts, musical compositions, records and soundtrack
recordings or other properties
or materials of any kind or nature in whatever state of completion and all drafts,
versions and variations thereof with respect to such Film (hereinafter referred to
collectively as the “Literary Property”);

          (ii) All physical properties of every kind or nature and in every media of or relating to any Film
and all versions thereof, including, without limitation, all physical properties relating to the
development, production, completion, delivery, exhibition, distribution or other

2

 

exploitation of any Film, and all versions thereof or any part thereof, including, without
limitation, the Literary Property, exposed film, developed film, positives, negatives, prints,
answer prints, special effects, pre print materials (including interpositives, negatives, duplicate
negatives, internegatives, color reversals, intermediates, lavenders, fine grain master prints and
matrices and all other forms of pre print elements that may be necessary or useful to produce
prints or other copies or additional pre print elements, whether now known or hereafter devised),
soundtracks, recordings, audio and video tapes and discs of all types and gauges, cutouts, trims
and any and all other physical properties of every kind and nature relating to any Film in whatever
state of completion, and all duplicates, drafts, versions, variations and copies of each thereof
(hereinafter referred to collectively as the “Physical Properties”)

          (iii) All rights of every kind or nature to the extent a Grantor has the same in and to any
and all music and musical compositions created for, used in or to be used in connection
with the Film, including, without limitation, all copyrights therein and all rights to
perform, copy, record, re-record, produce, publish, reproduce or synchronize any or all of
said music and musical compositions as well as all other rights to exploit such music,
including record, sound track recording and music publishing rights;

          (iv) All collateral, allied, ancillary, subsidiary, publishing and merchandising rights of every
kind and nature, without limitation, derived from, appurtenant to or related to any Film or the
Literary Property, including, without limitation, all production, exploitation, reissue, remake,
sequel, prequel, serial or series production rights by use of film, tape or any other recording
devices now known or hereafter devised, whether based upon, derived from or inspired by any Film,
the Literary Property or any part thereof; all rights to use, exploit and license others to use or
exploit any and all novelization, publishing, commercial tie-ups and merchandising rights of every
kind and nature arising out of or connected with or inspired by any Film, or the Literary Property,
the title or titles of any Film, the characters appearing in any Film or said Literary Property
and/or the names or characteristics of said characters, and including further, without limitation,
any and all commercial exploitation in connection with or related to any Film, all remakes,
prequels or sequels thereof and/or said Literary Property;

          (v) All rights of every kind or nature, present and future, in and to all agreements relating to
the development, production, completion, delivery and exploitation of any Film, including, without
limitation, all agreements for personal services, including the services of writers, directors,
cast, producers, special effects personnel, personnel, animators, cameramen and other creative,
artistic and technical staff and agreements for the use of studio space, equipment, facilities,
locations, animation services, special effects services and laboratory contracts;

          (vi) All insurance and insurance policies heretofore or hereafter placed by any Grantor upon any
Film or the insurable properties thereof and/or any Person, Persons, entity or entities engaged in
the development, production, completion, delivery or exploitation of any Film and obtained in
connection with any Film and the proceeds thereof;

          (vii) All copyrights, rights in copyrights, interests in copyrights and renewals and extensions of
copyrights, domestic and foreign, heretofore or hereafter obtained upon any Film or the Literary
Property or any part thereof, and the right (but not the obligation) to make publication thereof
for copyright purposes, to register copyright claims and the right (but not the obligation) to
renew and extend such copyrights, and the right (but not the obligation) to sue in the name of any
Grantor for past, present and future infringements of copyright;

3

 

          (viii) All rights to produce, acquire, release, sell, distribute, subdistribute, lease, sublease,
market, license, sublicense, exhibit, broadcast, transmit, reproduce, publicize or otherwise
exploit any Film, the Literary Property and any and all rights therein (including, without
limitation, the rights referred to in paragraph (iii) of this definition above) in perpetuity,
without limitation, in any manner and in any media whatsoever throughout the universe, including,
without limitation, by projection, radio, all forms of television (including, without limitation,
free, pay, toll, cable, pay per view, sustaining subscription, sponsored and direct broadcast
satellite), in theaters, non-theatrically, on cassettes, cartridges and discs and by any and all
other scientific, mechanical or electronic means, methods, processes or devices now known or
hereafter conceived, devised or created;

          (ix) All rights of any kind or nature, direct or indirect, to produce, develop, reacquire or
finance any Film, or any rights in any Film, including, without limitation, pursuant to agreements
between any Grantor and any Subsidiary of the Company that relate to the ownership, production or
financing of any Film;

          (x) All rent, revenues, income, royalties, compensation, products, increases, proceeds and profits,
or other property obtained or to be obtained from the production, release, sale, distribution,
subdistribution, lease, sublease, marketing, licensing, sublicensing, exhibition, broadcast,
transmission, reproduction, publication, ownership, exploitation or other uses or disposition of
any Film and the Literary Property (or any rights therein or part thereof), in any and all media,
including without limitation, the properties thereof and of any collateral, allied, ancillary,
merchandising and subsidiary rights therein and thereto, and amounts recovered as damages by reason
of unfair competition, the infringement of copyright, breach of any contract or infringement of any
rights, or derived therefrom in any manner whatsoever;

          (xi) Any and all documents, equipment, instruments and inventory, not
elsewhere included in this definition, that may arise in connection with the creation, production,
completion, delivery, financing, ownership, possession or exploitation of any Film;

          (xii) Any and all documents, receipts or books and records relating to any
Film, including, without limitation, documents or receipts of any kind or nature issued by any
pledgeholder, warehouseman or bailee with respect to any Film and any element thereof;

          (xiii) All accounts and all general intangibles in connection with or relating to any Film
including, without limitation, all accounts and all general intangibles constituting rights to
receive the payment of money, or other valuable consideration, all accounts and all other rights to
receive the payment of money including, without limitation, rights to receive the payment of money
under present or future contracts or agreements (whether or not earned by performance), from the
sale, distribution, exhibition, disposition, leasing, subleasing, licensing, sublicensing and other
exploitation of any Film or the Literary Property or any part thereof or any rights therein in any
medium, whether now known or hereafter developed, by any means, method, process or device in any
market
including, without limitation, all of the Grantor’s right, title and interest in, to and under
distribution agreements or licensing agreements relating to any Film, if any, as the same may
hereafter from time to time be amended, renewed, modified, supplemented, extended or replaced,
including the Grantor’s rights to receive payments thereunder, if any, and all other rights to
receive film rentals, license fees, distribution fees, producer’s shares, royalties and other
amounts of every description including, without limitation, from (x) video distributors and
wholesalers, theatrical exhibitors, non theatrical exhibitors, television networks and stations and
airlines, cable television systems, pay television operators, whether on a subscription, per

4

 

program charge basis or otherwise, and other exhibitors, (y) distributors, subdistributors,
lessees, sublessees, licensees and sublicensees (including any Subsidiary) and (z) any other Person
that distributes, exhibits or exploits any Film or the Literary Property or elements or components
of any Film or the Literary Property or rights relating thereto; and

          (xiv) All proceeds, products, additions and accessions (including insurance proceeds, and including
any deposit accounts containing any such proceeds) of any property referred to in subparagraphs (i)
through (xiii) of this definition above.

          “Guaranteed Obligations” has the meaning set forth in Section 2.1.

          “Guarantor” means each Grantor other than the Company.

          “Guaranty” means the guaranty of the Guaranteed Obligations made by the Guarantors as set
forth in this Agreement.

          “Laboratories” means those film and sound laboratories located in the United States, Canada
or the United Kingdom approved in accordance with the Credit Agreement Documents, or if all
obligations under the Credit Agreement have been paid in full and all commitments thereunder
terminated, the Collateral Agent (not to be unreasonably withheld) and the applicable Approved
Completion Guarantor that at any time may hold or will be holding any of the Physical Properties of
a Film and have signed and delivered to the Collateral Agent a Laboratory Pledgeholder Agreement.

          “Laboratory Pledgeholder Agreement” means a laboratory pledgeholder agreement, in
substantially the form of Annex 4 or such other form as shall be approved in accordance
with the Credit Agreement Documents (or if all obligations under the Credit Agreement have been
paid in full and all commitments thereunder terminated, such other form as shall be acceptable to
the Collateral Agent), among the Collateral Agent, the Company, the Approved Completion Guarantor
party thereto and a Laboratory.

          “Literary Property” has the meaning set forth in the definition of “Film
Collateral”.

          “Material Film Collateral” means all Film Collateral with respect to any Film, to the
extent material to the development, production or exploitation thereof.

          “Material Intellectual Property” means (i) all Material Film Collateral and (ii) all
Intellectual Property (other than Film Collateral) that is owned by or licensed to a Grantor and
material to the conduct of any Grantor’s business.

          “Physical Properties” has the meaning set forth in the definition of “Film Collateral”.

          “Pledged Certificated Stock” means all certificated securities and any other Stock or Stock
Equivalent of any Person evidenced by a certificate, instrument or other similar
document (as defined in the UCC), in each case owned by any Grantor, and any distribution of
property made on, in respect of or in exchange for the foregoing from time to time, but excluding
any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by
Section 7.11 of the Securities Purchase Agreement.

5

 

          “Pledged Collateral” means, collectively, the Pledged Stock and the Pledged Debt
Instruments.

          “Pledged Debt Instruments” means all right, title and interest of any Grantor in
instruments evidencing any Indebtedness owed to such Grantor or other obligations, and any
distribution of property made on, in respect of or in exchange for the foregoing from time to time,
issued by the obligors named therein, but excluding any Cash Equivalents that are not held in
Controlled Securities Accounts to the extent permitted by Section 7.11 of the Securities
Purchase Agreement

          “Pledged Investment Property” means any investment property of any Grantor, and any
distribution of property made on, in respect of or in exchange for the foregoing from time to time,
other than any Pledged Stock or Pledged Debt Instruments, but excluding any Cash Equivalents that
are not held in Controlled Securities Accounts to the extent permitted by Section 7.11 of the
Securities Purchase Agreement

          “Pledged Stock” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.

          “Pledged Uncertificated Stock” means any Stock or Stock Equivalent of any Person that is
not Pledged Certificated Stock, including all right, title and interest of any Grantor as a limited
or general partner in any partnership not constituting Pledged Certificated Stock or as a member of
any limited liability company, all right, title and interest of any Grantor in, to and under any
Constituent Document of any partnership or limited liability company to which it is a party, and
any distribution of property made on, in respect of or in exchange for the foregoing from time to
time, to the extent such interests are not certificated, but excluding any Cash Equivalents that
are not held in Controlled Securities Accounts to the extent permitted by Section 7.11 of
the Securities Purchase Agreement.

          “Security Cash Collateral Account” means a Cash Collateral Account that is not otherwise
required to be maintained in accordance with the Securities Purchase Agreement.

          “Software” means (a) all computer programs, including source code and object code versions,
(b) all data, databases and compilations of data, whether machine readable or otherwise, and (c)
all documentation, training materials and configurations related to any of the foregoing.

          “Subsidiary Guarantor” means any Guarantor that is a Subsidiary of the Company.

          “UCC” means the Uniform Commercial Code as from time to time in effect in the State of New
York; provided, however, that, in the event that, by reason of mandatory provisions of any
applicable Requirement of Law, any of the attachment, perfection or priority of the Collateral
Agent’s or any other Secured Party’s security interest in any Collateral is governed by the Uniform
Commercial Code of a jurisdiction other than the State of New York, “UCC” shall mean the
Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of the definitions related to or otherwise used in such provisions.

          “Vehicles” means all vehicles covered by a certificate of title law of any state.

6

 

     Section 1.2 Certain Other Terms. (a) The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms. The terms
“herein”, “hereof” and similar terms refer to this Agreement as a whole and not to any particular
Article, Section or clause in this Agreement. References herein to an Annex, Schedule, Article,
Section or clause refer to the appropriate Annex or Schedule to, or Article, Section or clause in
this Agreement. Where the context requires, provisions relating to any Collateral when used in
relation to a Grantor shall refer to such Grantor’s Collateral or any relevant part thereof.

          (b) Section 1.4 of the Securities Purchase Agreement is applicable to this Agreement as and
to the extent set forth therein.

          (c) Intercreditor Agreement. Anything herein to the contrary notwithstanding, the liens and
security interests granted to the Collateral Agent pursuant to this Agreement and the other Note
Documents and the exercise of any right or remedy by the Collateral Agent hereunder and thereunder
are subject to the provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of the Intercreditor Agreement and this Agreement or any other Note Document, the terms
of the Intercreditor Agreement shall govern and control. Any reference in this Agreement and the
other Note Documents to a “first priority lien”, or words of similar effect in describing the liens
and security interests created hereunder shall be understood to refer to such priority subject to
the claims of the First Lien Creditors and the First Lien Agent (each as defined in the
Intercreditor Agreement). All representations, warranties and covenants in this Agreement and the
other Note Documents shall be subject to the provisions and qualifications set forth in this
Section 1.2(c).

ARTICLE II

GUARANTY

     Section 2.1 Guaranty. To induce the Purchasers to purchase the notes to be issued
and sold by the Company pursuant to the terms of the Securities Purchase Agreement, each Guarantor
hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary
obligor and not merely as surety, the full and punctual payment when due, whether at stated
maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance
with any Note Document, of all the Obligations of the Company whether existing on the date hereof
or hereinafter incurred or created (the “Guaranteed Obligations”). This Guaranty by each
Guarantor hereunder constitutes a guaranty of payment and not of collection.

     Section 2.2 Limitation of Guaranty. Any term or provision of this Guaranty or any
other Note Document to the contrary notwithstanding, the maximum aggregate amount for which any
Subsidiary Guarantor shall be liable hereunder shall not exceed the maximum amount for which such
Subsidiary Guarantor can be liable without rendering this Guaranty or any other Note Document, as
it relates to such Subsidiary Guarantor, subject to avoidance under applicable Requirements of Law
relating to fraudulent conveyance or
fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act and Section 548 of title 11 of the United States Code or any applicable provisions of
comparable Requirements of Law) (collectively, “Fraudulent Transfer Laws”). Any analysis of the
provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the
right of contribution established in Section 2.3 and, for purposes of such analysis, give effect to
any discharge of intercompany debt as a result of any payment made under the Guaranty.

7

 

     Section 2.3 Contribution. To the extent that any Subsidiary Guarantor shall be
required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a) the
amount of the economic benefit actually received by such Subsidiary Guarantor from the Loans and
other Obligations and (b) the amount such Subsidiary Guarantor would otherwise have paid if such
Subsidiary Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the
amount thereof repaid by the Company) in the same proportion as such Subsidiary Guarantor’s net
worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the
Subsidiary Guarantors on such date, then such Guarantor shall be reimbursed by such other
Subsidiary Guarantors for the amount of such excess, pro rata, based on the respective net worth of
such other Subsidiary Guarantors on such date.

     Section 2.4
Authorization; Other Agreements. The Secured Parties are hereby
authorized, without notice to or demand upon any Guarantor and without discharging or otherwise
affecting the obligations of any Guarantor hereunder and without incurring any liability hereunder,
from time to time, to do each of the following:

          (a) (i) modify, amend, supplement or otherwise change, (ii) accelerate or otherwise change the time
of payment or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation or
any Note Document (except, in the case of any of the foregoing to the extent applicable to this
Agreement, in which case Section 8.5 hereof shall govern);

          (b) apply to the Guaranteed Obligations any sums by whomever paid or however realized to any
Guaranteed Obligation in such order as provided in the Note Documents;

          (c) refund at any time any payment received by any Secured Party in respect of any Guaranteed
Obligation;

          (d) (i) Sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to
perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise alter or
release any Collateral for any Guaranteed Obligation or any other guaranty therefor in any manner,
(ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add,
release or substitute any one or more other Guarantors, makers or endorsers of any Guaranteed
Obligation or any part thereof and (iv) otherwise deal in any manner with the Company and any other
Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and

          (e) settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.

     Section 2.5 Guaranty Absolute and Unconditional. To the maximum extent permitted by
applicable law, each Guarantor hereby waives and agrees not to assert any defense, whether arising
in connection with or in respect of any of the following or otherwise, and hereby agrees that its
obligations under this Guaranty are irrevocable, absolute and unconditional and shall not be
discharged as a result of or otherwise affected by any of the following (which may not be pleaded
and evidence of which may not be introduced
in any proceeding with respect to this Guaranty, in each case except as otherwise agreed in writing
by the Required Holders):

          (a) the invalidity or unenforceability of any obligation of the Company or any other Guarantor
under any Note Document or any other agreement or instrument relating thereto (including any
amendment, consent or waiver thereto), or any security for, or other

8

 

guaranty of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing
perfection or failure of priority of any security for the Guaranteed Obligations or any part
thereof;

          (b) the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from
the Company or any other Guarantor or other action to enforce the same or (ii) any action to
enforce any Note Document or any Lien thereunder;

          (c) the failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve
any rights with respect to, any Collateral;

          (d) any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or
dissolution by or against the Company, any other Guarantor or any of the Company’s other
Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission
thereunder, including any discharge or disallowance of, or bar or stay against collecting, any
Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;

          (e) any foreclosure, whether or not through judicial sale, and any other Sale of any Collateral or
any election following the occurrence of an Event of Default by any Secured Party to proceed
separately against any Collateral in accordance with such Secured Party’s rights under any
applicable Requirement of Law; or

          (f) any other defense, setoff, counterclaim or any other circumstance that might otherwise
constitute a legal or equitable discharge of the Company, any other Guarantor or any of the
Company’s other Subsidiaries, in each case other than the payment in full of the Guaranteed
Obligations.

     Section 2.6
Waivers. To the maximum extent permitted by applicable law, each Guarantor
hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff
or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice
hereunder (other than any notice required to be delivered to a Guarantor hereunder pursuant to
Section 6.1(b) or Section 6.1(e) hereof) including any of the following: (a) any
demand for payment or performance and protest and notice of protest, (b) any notice of acceptance,
(c) any presentment, demand, protest or further notice or other requirements of any kind with
respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming
immediately due and payable and (d) any other notice in respect of any Guaranteed Obligation or any
part thereof, and any defense arising by reason of any disability or other defense of the Company
or any other Guarantor. Each Guarantor further unconditionally and irrevocably agrees, until the
payment in full in cash of the Guaranteed Obligations, not to (x) enforce or otherwise exercise any
right of subrogation or any right of reimbursement or contribution or similar right against the
Company or any other Guarantor by reason of any Note Document or any payment made thereunder or (y)
assert any claim, defense, setoff or counterclaim it may have against any other Loan Party or set
off any of its obligations to such other Loan Party against obligations of such Loan Party to such
Guarantor. No obligation of any Guarantor hereunder shall be discharged other than by complete
performance.

     Section 2.7 Reliance. Each Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of the Company, each other Guarantor and any other
guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other

9

 

Lien on and security interest in, all of its right, title and interest in, to and under the
Collateral of such Grantor.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

          To induce the Purchasers to purchase the notes to be issued and sold by the Company pursuant to the
Securities Purchase Agreement, each Grantor hereby represents and warrants each of the following to
the Collateral Agent, the Purchasers and the other Secured Parties:

     Section 4.1
Title; No Other Liens. Except for the Lien granted to the Collateral Agent
pursuant to this Agreement and other Permitted Liens, such Grantor owns each item of the Collateral
free and clear of any and all Liens or claims of others. Such Grantor (a) is the record and
beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates
and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is
granted by it hereunder, free and clear of any other Lien.

     Section 4.2 Perfection and Priority. The security interest granted pursuant to this
Agreement constitutes a valid and continuing perfected security interest in favor of the Collateral
Agent in all Collateral subject, for the following Collateral, to the occurrence of the following:
(i) in the case of all Collateral in which a security interest may be perfected by filing a
financing statement under the UCC, the completion of the filings and other actions specified on
Schedule 1 (which, in the case of all filings and other documents referred to on such
schedule, have been delivered to the Collateral Agent in completed and duly authorized form), (ii)
with respect to any deposit account as original collateral or constituting proceeds except as
otherwise provided in Section 9-315(c) and (d) of the UCC, the execution of Control Agreements,
(iii) in the case of all Copyrights, Trademarks and Patents for which UCC filings are insufficient,
all appropriate filings having been made with the United States Copyright Office or the United
States Patent and Trademark Office, as applicable, (iv) in the case of letter-of-credit rights that
are not supporting obligations of Collateral, the execution of a Contractual Obligation granting
control to the Collateral Agent over such letter-of-credit rights, (v) in the case of electronic
chattel paper a security interest in which has not been perfected by the filing of a financing
statement, the completion of all steps necessary to grant control to the Collateral Agent over such
electronic chattel paper and (vi) in the case of Vehicles, the notation of the Collateral Agent’s
security interest on the certificate of title of such Vehicle. Such security interest shall be
prior to all other Liens on the Collateral except for Permitted Liens having priority over the
Collateral Agent’s Lien by operation of law or pursuant to the terms of the Intercreditor Agreement
and subject, for the following Collateral to the occurrence of the following: (i) in the case of
all Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property, the
delivery thereof to the Collateral Agent of such Pledged Certificated Stock, Pledged Debt
Instruments and Pledged Investment Property consisting of instruments and certificates, in each
case properly endorsed for transfer to the Collateral Agent or in blank, (ii) in the case of all
Pledged Investment Property not in certificated form, the execution of Control
Agreements with respect to such investment property and (iii) in the case of all other instruments
and tangible chattel paper that are not Pledged Certificated Stock, Pledged Debt Instruments or
Pledged Investment Property, the delivery thereof to the Collateral Agent of such instruments and
tangible chattel paper. Except as set forth in this
Section 4.2, all actions by each Grantor
necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have
been duly taken.

10

 

     Section 4.3
Jurisdiction of Organization; Chief Executive Office. Such Grantor’s
jurisdiction of organization, legal name and organizational identification number, if any, and the
location of such Grantor’s chief executive office or principal place of business and the locations
of its books and records concerning the Collateral, in each case as of the date hereof, is
specified on Schedule 2.

     Section 4.4
Locations of Physical Properties, Equipment and Books and Records. On
the date hereof, such Grantor has no interest in any Physical Properties and only immaterial
interests in equipment.

     Section 4.5 Pledged Collateral. (a) On the date hereof, no Guarantor has any
Subsidiaries or any right, title or interest in any Pledged Collateral (other than in the case of
Holdings, for the Company and Holdings’ interests in the Stock of the Company). Any Pledged Stock
constituting Collateral hereunder has been duly authorized, validly issued and is fully paid and
nonassessable (other than Pledged Stock in limited liability companies and partnerships) and any
Pledged Debt Instrument and Pledged Stock issued by a limited liability company or partnership has
been duly authorized, authenticated or issued and delivered by and constitutes the legal, valid and
binding obligation of the obligor or issuer with respect thereto, as the case may be, enforceable
in accordance with its terms (subject, as to enforceability, to any applicable bankruptcy,
insolvency or similar law affecting the rights and remedies of creditors generally and to general
principles of equity).

          (b) Upon the occurrence and during the continuance of an Event of Default, but subject to the
Intercreditor Agreement and then only to the extent set forth in
Section 6.3, the Collateral Agent
shall be entitled to exercise all of the rights of the Grantor granting the security interest in
any Pledged Stock, and a transferee or assignee of such Pledged Stock shall become a holder of such
Pledged Stock to the same extent as such Grantor and be entitled to participate in the management
of the issuer of such Pledged Stock and, upon the transfer of the entire interest of such Grantor,
such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.

     Section 4.6 Instruments and Tangible Chattel Paper Formerly Accounts. No amount
payable to such Grantor under or in connection with any account is evidenced by any instrument or
tangible chattel paper that has not been delivered to the Credit Agreement Collateral Agent,
properly endorsed for transfer, to the extent delivery is required by Section 5.6(a).

     Section 4.7 Intellectual Property. (a) Schedule 3, as supplemented by the
Intellectual Property information provided pursuant to Section 5.7, sets forth a true and
complete list for such Grantor of all right, title and interest of such Grantor in all Material
Intellectual Property that has been registered by such Grantor with any Governmental Authority or
that is subject to applications therefor by such Grantor, which Schedule (and supplements thereto)
shall include for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in
which such item has been registered or otherwise arises or in which an
application for registration has been filed and (4) as applicable, the registration or application
number and registration or application date.

          (b) All Material Film Collateral owned by such Grantor is valid, in full force and effect,
subsisting, unexpired and enforceable. Neither the execution, delivery and performance of the
transactions contemplated by the Note Documents nor any holding, decision, judgment or order
rendered by any Governmental Authority against such Grantor or any of its assets has or will result
in a breach of, or default under, or otherwise limit or impair in any material respect the
ownership, use, validity or enforceability of, or any rights of, such Grantor in,

11

 

any Material Film Collateral. There are no pending (or, to the knowledge of such Grantor,
threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or
disputes challenging in any material respect the ownership, use, validity or enforceability of, or
such Grantor’s rights in, any Material Film Collateral of such Grantor. To such Grantor’s
knowledge, no Person has been or is infringing, misappropriating, diluting, violating or otherwise
impairing in any material respect any Material Film Collateral of such Grantor. Such Grantor, and
to such Grantor’s knowledge each other party thereto, is not in material breach or default of any
IP License constituting Material Film Collateral.

     Section 4.8 Commercial Tort Claims. As of the date hereof, such Grantor has no
right, title or interest in any commercial tort claim.

     Section 4.9 Specific
Collateral. None of the Collateral is or is proceeds or products of
farm products, as-extracted collateral, health-care-insurance receivables or timber to be cut.

     Section 4.10 Enforcement. No Permit, notice to or filing with any Governmental
Authority or any other Person or any consent from any Person is required for the exercise by the
Collateral Agent of its rights (including voting rights) provided for in this Agreement or the
enforcement of remedies in respect of the Collateral pursuant to this Agreement, including the
transfer of any Collateral, except as may be required in connection with the disposition of any
portion of the Pledged Collateral by laws affecting the offering and sale of securities generally
or any approvals that may be required to be obtained from any bailees or landlords to collect the
Collateral.

     Section 4.11
Representations and Warranties of the Securities Purchase
Agreement. The
representations and warranties as to such Grantor and its Subsidiaries made by the Company in
Article IV of the Securities Purchase Agreement are true and correct on each date as required by
Section 3.2(f) of the Securities Purchase Agreement.

ARTICLE V

COVENANTS

          Each Grantor agrees with the Collateral Agent to the following, as long as any
Obligation remains outstanding and, in each case, unless the Required Holders otherwise consent in
writing:

     Section 5.1
Maintenance of Perfected Security Interest; Further Documentation and
Consents. (a) Such Grantor shall (i) not use or permit any Collateral to be used unlawfully or
in violation of any provision of any Note Document, any Related Document, any Requirement of Law or
any policy of insurance covering the Collateral and (ii) not enter into any Contractual Obligation
or undertaking restricting the right or ability of such Grantor or the Collateral Agent to Sell any
Collateral (other than a Note Document or a Credit Agreement Document) if such restriction would
have a Material Adverse Effect.

          (b) Such Grantor shall maintain the security interest created by this Agreement as a perfected
security interest having at least the priority described in Section 4.2 and shall defend
such security interest and such priority against the claims and demands of all Persons.

12

 

          (c) Pursuant to Section 6.1(d) of the Securities Purchase Agreement, such Grantor shall
furnish to the Collateral Agent from time to time statements and schedules further identifying and
describing the Collateral and such other documents in connection with the Collateral as the
Collateral Agent may reasonably request, all in reasonable detail and in form and substance
reasonably satisfactory to the Collateral Agent.

          (d) At any time and from time to time, upon the written request of the Collateral Agent, such
Grantor shall, for the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted, (i) promptly and duly execute and deliver, and have
recorded, such further documents, including an authorization to file (or, as applicable, the
filing) of any financing statement or amendment under the UCC (or other filings under similar
Requirements of Law) in effect in any jurisdiction with respect to the security interest created
hereby and (ii) take such further action as the Collateral Agent may reasonably request, including
executing and delivering any Control Agreements with respect to deposit accounts and securities
accounts, to the extent required by the Securities Purchase Agreement.

     Section 5.2 Changes in Locations, Name, Etc. Except upon 30 days’ prior written
notice to the Collateral Agent and delivery to the Collateral Agent of all documents reasonably
requested by the Collateral Agent to maintain the validity, perfection and priority of the security
interests provided for herein, such Grantor shall not do any of the following:

     (i) change its jurisdiction of organization or its location, in each case from that referred to in
Section 4.3; or

     (ii) change its legal name or organizational identification number, if any, or corporation, limited
liability company, partnership or other organizational structure to such an extent that any
financing statement filed in connection with this Agreement would become misleading.

     Section 5.3 Pledged Collateral. (a) Delivery of Pledged Collateral. Such
Grantor shall (i) deliver to the Credit Agreement Collateral Agent (or, if all obligations under
the Credit Agreement have been paid in full and all commitments thereunder terminated, the
Collateral Agent), in suitable form for transfer and in form and substance reasonably satisfactory
to the Credit Agreement Collateral Agent (or the Collateral Agent, as the case may be), (A) all
Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates and
instruments evidencing Pledged Investment Property and (ii) maintain all other Pledged Investment
Property in a Controlled Securities Account.

          (b) Event of Default. During the continuance of an Event of Default, but subject to the
Intercreditor Agreement and then only to the extent set forth in
Section 6.3, the Collateral Agent
shall have the right, at any time in its discretion and without notice to any Grantor, to (i)
transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any
Pledged Investment Property and (ii) exchange any certificate or instrument representing or
evidencing any Pledged Collateral or any Pledged Investment Property for certificates or
instruments of smaller or larger denominations.

          (c) Cash Distributions with respect to Pledged Collateral. Except as provided in
Article VI, such Grantor shall be entitled to receive all cash distributions paid in
respect of the Pledged Collateral.

13

 

          (d) Voting Rights. Except as provided in Article VI, such Grantor shall be entitled
to exercise all voting, consent and corporate, partnership, limited liability company and similar
rights with respect to the Pledged Collateral;provided, however, that no vote shall be cast,
consent given or right exercised or other action taken by such Grantor that would impair the
Collateral or be inconsistent with or result in any violation of any provision of any Note
Document.

     Section 5.4 Accounts. (a) Such Grantor shall not, other than in the ordinary course
of business and if not in the ordinary course of business, for so long as no Event of Default has
occurred and is continuing, as long as none of the following are material, (i) grant any extension
of the time of payment of any account, (ii) compromise or settle any account for less than the full
amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any
account, (iv) allow any credit or discount on any account or (v) amend, supplement or modify any
account in any manner that could adversely affect the value thereof.

          (b) The Collateral Agent shall have the right to make test verifications of the Accounts in any
manner and through any medium that it reasonably considers advisable, and such Grantor shall
furnish all such assistance and information as the Collateral Agent may reasonably require in
connection therewith. At any time and from time to time, upon the Collateral Agent’s request, such
Grantor shall cause independent public accountants or others satisfactory to the Collateral Agent
to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications
of, and trial balances for, the Accounts.

     Section 5.5 Commodity Contracts. Such Grantor shall not be a party to any commodity
contracts.

     Section 5.6 Delivery of Instruments and Tangible Chattel Paper and Control of
Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper. (a) If any amount in
excess of $100,000 payable under or in connection with any Collateral owned by such Grantor shall
be or become evidenced by an instrument or tangible chattel paper other than such instrument
delivered in accordance with Section 5.3(a) and in the possession of the Credit Agreement
Collateral Agent (or, if the obligations under the Credit Agreement have been paid in full and the
commitments thereunder terminated, the Collateral Agent), such Grantor shall mark all such
instruments and tangible chattel paper with the following legend: “This writing and the obligations
evidenced or secured hereby are subject to the security interest of General Electric Capital
Corporation, as Collateral Agent” and, at the request of the Collateral Agent, shall immediately
deliver such instrument or tangible chattel paper to the Credit Agreement Collateral Agent (or if
the obligations under the Credit Agreement have been paid in full and the commitments thereunder
terminated, the Collateral Agent), duly indorsed in a manner satisfactory to the Credit Agreement
Collateral Agent (or the Collateral Agent, as the case may be).

          (b) Such Grantor shall not grant “control” (within the meaning of such term under Article 9-106 of
the UCC) over any investment property to any Person other than the Collateral Agent and the Credit
Agreement Collateral Agent.

          (c) If such Grantor is or becomes the beneficiary of a letter of credit that is (i) not a
supporting obligation of any Collateral and (ii) in excess of $100,000, such Grantor shall
promptly, and in any event within two (2) Business Days after becoming a beneficiary, notify the
Collateral Agent thereof and enter into a Contractual Obligation with the Collateral Agent, the
issuer of such letter of credit or any nominated person with respect to the letter-of-credit rights

14

 

under such letter of credit. Such Contractual Obligation shall assign such letter-of-credit rights
to the Collateral Agent and such assignment shall be sufficient to grant control for the purposes
of Section 9-107 of the UCC (or any similar section under any equivalent UCC). Such Contractual
Obligation shall also direct all payments thereunder to a Controlled Deposit Account. The
provisions of the Contractual Obligation shall be in form and substance reasonably satisfactory to
the Collateral Agent.

          (d) If any amount in excess of $100,000 payable under or in connection with any Collateral owned by
such Grantor shall be or become evidenced by electronic chattel paper, such Grantor shall take all
steps necessary to grant the Collateral Agent control of all such electronic chattel paper for the
purposes of Section 9-105 of the UCC (or any similar section under any equivalent UCC) and all
“transferable records” as defined in each of the Uniform Electronic Transactions Act and the
Electronic Signatures in Global and National Commerce Act.

     Section 5.7 Intellectual Property. (a) Promptly, and in any event within ten
Business Days following the date on which any Grantor acquires any Material Intellectual Property
that is registered or subject to applications for registration, such Grantor shall provide notice
thereof to the Collateral Agent and shall deliver to the Collateral Agent (A) written evidence of
the registration of any and all such Material Intellectual Property and (B) a duly executed short
form intellectual property security agreement in the form attached hereto as Annex 3
covering such Material Intellectual Property.

          (b) Such Grantor shall not do any act or omit to do any act whereby any portion of the Copyrights
constituting Material Film Collateral may become invalidated, otherwise impaired or fall into the
public domain.

          (c) Such Grantor shall notify the Collateral Agent immediately if it knows, or has reason to know,
that any application or registration of Material Film Collateral may become forfeited, misused or
unenforceable in any material respect, or of any material adverse determination or development
regarding the validity or enforceability or such Grantor’s ownership of, interest in, right to use,
register, own or maintain any Material Film Collateral (including the institution of, or any such
determination or development in, any proceeding relating to the foregoing in any Applicable IP
Office). Such Grantor shall take all actions that are necessary or reasonably requested by the
Collateral Agent to maintain and pursue each application (and to obtain the relevant registration
or recordation) and to maintain each registration and recordation, in each case constituting
Material Film Collateral.

          (d) Such Grantor shall not knowingly do any act or omit to do any act to infringe, misappropriate,
dilute, violate or otherwise impair in any material respect the Intellectual Property of any other
Person. In the event that any Material Film Collateral of such Grantor is or has been infringed,
misappropriated, violated, diluted or otherwise impaired by a third party in any material respect,
such Grantor shall take such action as it deems appropriate under the circumstances in response
thereto or as otherwise reasonably
requested by the Collateral Agent, including promptly bringing suit and recovering all damages
therefor.

     Section 5.8 Notices. Such Grantor shall promptly notify the Collateral Agent in writing of
its acquisition of any interest hereafter in property that is of a type where a security interest
or lien must be or may be registered, recorded or filed under, or notice thereof given under, any
federal statute or regulation, to the extent contemplated by Section 5.7.

15

 

     Section 5.9 Notice of Commercial Tort Claims. Such Grantor agrees that, if it shall
acquire any interest in any commercial tort claim (whether from another Person or because such
commercial tort claim shall have come into existence), (i) such Grantor shall, promptly, and in any
event within two (2) Business Days after the same is acquired by it, deliver to the Collateral
Agent, in each case in form and substance satisfactory to the Collateral Agent, a written notice of
the existence and nature of such commercial tort claim containing a specific description of such
commercial tort claim, (ii) Section 3.1 shall apply to such commercial tort claim and (iii) such
Grantor shall execute and deliver to the Collateral Agent, in each case in form and substance
reasonably satisfactory to the Collateral Agent, any document, and take all other action,
reasonably deemed by the Collateral Agent to be necessary or appropriate for the Collateral Agent
to obtain, on behalf of the Holders, a perfected security interest having at least the priority set
forth in Section 4.2 in all such commercial tort claims.

     Section 5.10 Physical Properties and the Laboratory. All Physical Properties relating to any
Film shall be deposited only with Laboratories in connection with which Laboratory Pledgeholder
Agreements shall have been executed by an Approved Completion Guarantor, the relevant Laboratory,
the Company (or other Grantor) and the Collateral Agent. No print, preprint, sound or other
Physical Properties of any Film shall be deposited at any Laboratory or maintained at any place
other than the Laboratories that have executed and delivered a fully executed Laboratory
Pledgeholder Agreement, unless otherwise permitted by the terms of the Credit Agreement Documents.

Section 5.11 Compliance with Securities Purchase Agreement. Such Grantor agrees to comply with all
covenants and other provisions applicable to it under the Securities Purchase Agreement, including
Sections 11.3 and 11.4 of the Securities Purchase Agreement and agrees to the same submission to
jurisdiction as that agreed to by the Company in the Securities Purchase Agreement.

ARTICLE VI

REMEDIAL PROVISIONS

     Section 6.1 Code and Other Remedies. (a) UCC Remedies. During the continuance of an Event of
Default but subject to the terms of the Intercreditor Agreement, the Collateral Agent may exercise,
in addition to all other rights and remedies granted to it in this Agreement and in any other
instrument or agreement securing, evidencing or relating to any Secured Obligation, all rights and
remedies of a secured party under the UCC or any other applicable law.

          (b) Disposition of Collateral. Without limiting the generality of the foregoing, the
Collateral Agent may, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law of the time and place of any
public sale or the time after which any other disposition may be consummated) to or upon any
Grantor or any other Person (all and each of which demands, defenses, advertisements and notices
are hereby waived to the maximum extent permitted by applicable law), during the continuance of any
Event of Default (Persona1ly or through its agents or attorneys), (i) enter upon the premises where
any Collateral is located, without any obligation to pay rent, through self-help, without judicial
process, without first obtaining a final judgment or giving any Grantor or any other Person notice
or opportunity for a hearing on the Collateral Agent’s claim or action, (ii) collect, receive,
appropriate and realize upon any Collateral and (iii) Sell, grant an option or options to purchase
and deliver any Collateral (or enter into Contractual

16

 

Obligations to do any of the foregoing), in one or more parcels at public or private sale or sales,
at any exchange, broker’s board or office of any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. The Collateral Agent shall have the
right, upon any such public sale or sales and, to the extent permitted by the UCC and other
applicable Requirements of Law, upon any such private sale, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or
equity is hereby waived and released.

          (c) Management of the Collateral. Each Grantor further agrees, that, during the continuance of
any Event of Default, (i) at the Collateral Agent’s request, it shall assemble the Collateral and
make it available to the Collateral Agent at places that the Collateral Agent shall reasonably
select, whether at such Grantor’s premises or elsewhere, (ii) without limiting the foregoing, the
Collateral Agent also has the right to require that each Grantor store and keep any Collateral
pending further action by the Collateral Agent and, while any such Collateral is so stored or kept,
provide such guards and maintenance services as shall be necessary to protect the same and to
preserve and maintain such Collateral in good condition, (iii) until the Collateral Agent is able
to Sell any Collateral, the Collateral Agent shall have the right to hold or use such Collateral to
the extent that it deems appropriate for the purpose of preserving the Collateral or its value or
for any other purpose deemed appropriate by the Collateral Agent and (iv) the Collateral Agent may,
if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral
and to enforce any of the Collateral Agent’s remedies (for the benefit of the Secured Parties),
with respect to such appointment without prior notice or hearing as to such appointment. The
Collateral Agent shall not have any obligation to any Grantor to maintain or preserve the rights of
any Grantor as against third parties with respect to any Collateral while such Collateral is in the
possession of the Collateral Agent.

     (d) Application of Proceeds. The Collateral Agent shall apply the cash proceeds of any action
taken by it pursuant to this Section 6.1, after deducting all reasonable costs and expenses of
every kind incurred in connection therewith or incidental to the care or safekeeping of any
Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and any
other Secured Party hereunder, including reasonable attorneys’ fees and disbursements, to the
payment in whole or in part of the Secured Obligations, as follows:

     first, to payment of any other unreimbursed expenses for which any Secured Party is to
be reimbursed pursuant to Section 11.2 of the Securities Purchase Agreement;

     second, to the ratable payment of any unpaid principal of, premium, if any, and any
accrued but unpaid interest on the Notes; and

     third, to the ratable payment of all other Secured Obligations, until all Secured
Obligations shall have been paid in full;

and only after such application and after the payment by the Collateral Agent of any other amount
required by any Requirement of Law, need the Collateral Agent account for the surplus, if any, to
any Grantor.

17

 

          (e) Direct
Obligation. Neither the Collateral Agent nor any other Secured Party shall be
required to make any demand upon, or pursue or exhaust any right or remedy against, any Grantor,
any other Loan Party or any other Person with respect to the payment of the Obligations or to
pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or
indirect guaranty thereof. All of the rights and remedies of the Collateral Agent and any other
Secured Party under any Note Document shall be cumulative, may be exercised individually or
concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law.
To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent
or any Holder, any valuation, stay, appraisement, extension, redemption or similar laws and any and
all rights or defenses it may have as a surety, now or hereafter existing, arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of
any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given
at least 10 days before such sale or other disposition.

          (f) Commercially
Reasonable. To the extent that applicable Requirements of Law impose duties on the
Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor
acknowledges and agrees that it is not commercially unreasonable for the Collateral Agent to do any
of the following:

     (i) fail to exercise remedies against account debtors or other Persons obligated on any Collateral
or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;

     (ii) advertise dispositions of any Collateral through publications or media of general circulation,
whether or not such Collateral is of a specialized nature, so long as any such advertisement is
also made in The Hollywood Reporter or Daily Variety, or to contact other Persons, whether or not
in the same business as any Grantor, for expressions of interest in acquiring any such Collateral;

     (iii) exercise collection remedies against account debtors and other Persons obligated on any
Collateral, directly or through the use of collection agencies or other collection specialists, or,
to the extent deemed appropriate by the Collateral Agent, obtain the services of other brokers,
investment bankers, consultants and other professionals to assist the Collateral Agent in the
collection or disposition of any Collateral;

     (iv) disclaim disposition warranties, such as title, possession or quiet
enjoyment (to the extent it may lawfully do so); or

     (v) purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss,
collection or disposition of any Collateral.

Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a non-exhaustive list
of actions or omissions that are commercially reasonable when exercising remedies against any
Collateral and that other actions or omissions by the Secured Parties shall not be deemed
commercially unreasonable solely on account of not being indicated in this Section 6.1. Without
limitation upon the foregoing, nothing contained in this Section 6.1 shall be construed to grant
any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been
granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this
Section 6.1.

18

 

          (g) IP Licenses. For the purpose of enabling the Collateral Agent to exercise rights and
remedies under this Section 6.1 (including in order to take possession of, collect, receive,
assemble, process, appropriate, remove, realize upon, Sell or grant options to purchase any
Collateral) at such time as the Collateral Agent shall be lawfully entitled to exercise such rights
and remedies, each Grantor hereby grants to the Collateral Agent (but only to the extent that it
may lawfully do so), for the benefit of the Secured Parties,
(i) an irrevocable, nonexclusive,
worldwide license (exercisable without payment of royalty or other compensation to such Grantor),
including in such license the right to sublicense, use and practice any Intellectual Property now
owned or hereafter acquired by such Grantor and access to all media in which any of the licensed
items may be recorded or stored and to all Software and programs used for the compilation or
printout thereof and (ii) an irrevocable license (without payment of rent or other compensation to
such Grantor) to use, operate and occupy all Real Property owned, operated, leased, subleased or
otherwise occupied by such Grantor.

          Section 6.2 Accounts and Payments in Respect of General Intangibles. (a) In addition to, and not in
substitution for, any similar requirement in the Securities Purchase Agreement, if required by the
Collateral Agent at any time during the continuance of an Event of Default (and otherwise permitted
by the Intercreditor Agreement), any payment of accounts or payment in respect of general
intangibles, when collected by any Grantor, shall be promptly (and, in any event, within two (2)
Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor
to the Collateral Agent, in a Security Cash Collateral Account, subject to withdrawal by the
Collateral Agent as provided in Section 6.4. Until so turned over, such payment shall be held by
such Grantor in trust for the Collateral Agent, segregated from other funds of such Grantor. Each
such deposit of proceeds of accounts and payments in respect of general intangibles shall be
accompanied by a report identifying in reasonable detail the nature and source of the payments
included in the deposit.

          (b) At any time during the continuance of an Event of Default, subject to the terms of the
Intercreditor Agreement:

     (i) each Grantor shall, upon the Collateral Agent’s request, deliver to the Collateral Agent (if
not otherwise required to be delivered to the Credit Agreement Collateral Agent) all original and
other documents evidencing, and relating to, the Contractual Obligations and transactions that gave
rise to any account or any payment in respect of general intangibles, including all original
orders, invoices and shipping receipts and notify account debtors that the accounts or general
intangibles have been collaterally assigned to the Collateral Agent and that payments in respect
thereof shall be made directly to the Credit Agreement Collateral Agent (or, if the obligations
outstanding in respect of the Credit Agreement have been paid in full and all commitments
thereunder terminated, the Collateral Agent);

     (ii) the Collateral Agent may, without notice, limit or terminate the authority of a Grantor to
collect its accounts or amounts due under general intangibles or any thereof and, in its own name
or in the name of others, communicate with account debtors to verify with them to the Collateral
Agent’s satisfaction the existence, amount and terms of any account or amounts due under any
general intangible and, in addition, the Collateral Agent may at any time enforce such Grantor’s
rights against such account debtors and obligors of general intangibles; and

19

 

     (iii) each Grantor shall take all actions, deliver all documents and provide all information
necessary or reasonably requested by the Collateral Agent to ensure that any Internet Domain Name
is registered.

          (c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each
account and each payment in respect of general intangibles to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in accordance with
the terms of any agreement giving rise thereto. No Secured Party shall have any obligation or
liability under any agreement giving rise to an account or a payment in respect of a general
intangible by reason of or arising out of any Note Document or the receipt by any Secured Party of
any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any
obligation of any Grantor under or pursuant to any agreement giving rise to an account or a payment
in respect of a general intangible, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any performance by any
party thereunder, to present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts that may have been assigned to it or to which it may be entitled
at any time or times.

     Section 6.3 Pledged Collateral. (a) Voting Rights. During the continuance of an Event of Default,
upon notice by the Collateral Agent to the relevant Grantor or Grantors, the Collateral Agent or
its nominee may, if otherwise permitted by the Intercreditor Agreement, exercise (A) any voting,
consent, corporate and other right pertaining to the Pledged Collateral at any meeting of
shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged
Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other
right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner
thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger,
amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the
corporate or equivalent structure of any issuer of Pledged Stock and the right to deposit and
deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Collateral Agent may determine), all
without liability except to account for property actually received by
it; provided, however, that
the Collateral Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so doing.

          (b) Proxies. In order to permit the Collateral Agent to exercise the voting and other consensual
rights that it may be entitled to exercise pursuant hereto and to receive all dividends and other
distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute
and deliver (or cause to be executed and delivered) to the Collateral Agent all such proxies,
dividend payment orders and other instruments as the Collateral Agent may from time to time
reasonably request and (ii) without limiting the effect of
clause (i) above, such Grantor hereby
grants to the Collateral Agent an irrevocable proxy to vote all or any part of the Pledged
Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of
the Pledged Collateral would be entitled (including giving or withholding written consents of
shareholders, partners or members, as the case may be, calling special meetings of shareholders,
partners or members, as the case may be, and voting at such meetings), which proxy shall be
effective, automatically and without the necessity of any action (including any transfer of any
Pledged Collateral on the record books of the issuer thereof) by any other person (including the
issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an

20

 

Event of Default and which proxy shall only terminate upon the payment in full of the Secured
Obligations.

          (c) Authorization
of Issuers. Each Grantor hereby expressly irrevocably authorizes and instructs,
without any further instructions from such Grantor, each issuer of any Pledged Collateral pledged
hereunder by such Grantor to (i) comply with any instruction received by it from the Collateral
Agent in writing that states that an Event of Default is continuing and is otherwise in accordance
with the terms of this Agreement and each Grantor agrees that such issuer shall be fully protected
from Liabilities to such Grantor in so complying and (ii) unless otherwise expressly permitted
hereby, pay any dividend or make any other payment with respect to the Pledged Collateral directly
to the Collateral Agent.

     Section 6.4 Proceeds to be Turned over to and Held by Collateral Agent. During the continuance
of an Event of Default, all proceeds of any Collateral received by any Grantor hereunder in cash or
Cash Equivalents shall be held by such Grantor in trust for the Collateral Agent and the other
Secured Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by
any Grantor, be turned over to the Credit Agreement Collateral Agent (or, if the obligations
outstanding under the Credit Agreement have been paid in full and the commitments thereunder
terminated, the Collateral Agent) in the exact form received (with any necessary endorsement);
provided, however, that the foregoing shall not limit each Grantor’s obligation to deposit all
Collections into the Collection Account immediately upon receipt in accordance with
Section 7.11 of the Securities Purchase Agreement. All such proceeds of Collateral and any
other proceeds of any Collateral received by the Collateral Agent in cash or Cash Equivalents shall
be held by the Collateral Agent in a Security Cash Collateral Account. All proceeds being held by
the Collateral Agent in a Security Cash Collateral Account (or by such Grantor in trust for the
Collateral Agent) shall continue to be held as collateral security for the Secured Obligations and
shall not constitute payment thereof until applied as provided in Section 6.1(d).

     Section 6.5 Registration Rights. (a) Each Grantor recognizes that the Collateral Agent may be
unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the “Securities Act”) and applicable state or
foreign securities laws or otherwise or may determine that a public sale is impracticable, not
desirable or not commercially reasonable and, accordingly, may resort to one or more private sales
thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to
acquire such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have
been made in a commercially unreasonable manner solely by virtue of such sale being private. The
Collateral Agent shall be under no obligation to delay a sale of any Pledged Collateral for the
period of time necessary to permit the issuer thereof to register such securities for public sale
under the Securities Act or under applicable state securities laws even if such issuer would agree
to do so.

          (b) Each Grantor further agrees that a breach of any covenant contained in this Section 6.5
will cause irreparable injury to the Collateral Agent and other Secured Parties, that the
Collateral Agent and the other Secured Parties have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this Section 6.5 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives and agrees

21

 

not to assert any defense against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred and is continuing under the Securities Purchase
Agreement.

     Section 6.6 Deposit Accounts; Securities Accounts. During and only during the continuance of an
Event of Default, the Collateral Agent shall have the right, at any time in its discretion and
without notice to any Grantor, to deliver notices of exclusive control or otherwise assert
exclusive ‘control’ over any deposit accounts and securities accounts that are the subject of a
Control Agreement. Without limiting the foregoing, at all times, the Collateral Agent shall have
exclusive control (with the Credit Agreement Collateral Agent) over all Cash Collateral Accounts.

     Section 6.7 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any
sale or other disposition of any Collateral are insufficient to pay the Secured Obligations and the
fees and disbursements of any outside attorney employed by the Collateral Agent or any other
Secured Party to collect such deficiency.

ARTICLE VII

THE COLLATERAL AGENT

     Section 7.1 Collateral Agent’s Appointment as Attorney-in-Fact. (a) Each Grantor hereby irrevocably
constitutes and appoints the Collateral Agent and any Related Person thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its own name, for the
purpose of carrying out the terms of the Note Documents, to take any appropriate action and to
execute any document or instrument that may be necessary or desirable to accomplish the purposes of
the Note Documents, and, without limiting the generality of the foregoing, each Grantor hereby
gives the Collateral Agent and its Related Persons the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any of the following when an Event of Default
shall be continuing:

     (i) in the name of such Grantor, in its own name or otherwise, take possession of and indorse and
collect any check, draft, note, acceptance or other instrument for the payment of moneys due under
any account or general intangible or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or otherwise deemed necessary or
appropriate by the Collateral Agent for the purpose of collecting any such moneys due under any
account or general intangible or with respect to any other Collateral whenever payable;

     (ii) in the case of any Intellectual Property owned by or licensed to the Grantors, execute,
deliver and have recorded any document that the Collateral Agent may request to evidence, effect,
publicize or record the Collateral Agent’s security interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or represented thereby;

     (iii) pay or discharge taxes and Liens levied or placed on or threatened against any Collateral,
effect any repair or pay any insurance called for by the terms of the Securities Purchase Agreement
(including all or any part of the premiums therefor and the costs thereof);

22

 

     (iv)
execute, in connection with any sale provided for in
Section 6.1 or Section 6.5, any document
to effect or otherwise deemed necessary or appropriate by the Collateral Agent to evidence the Sale
of any Collateral or to otherwise perfect or maintain the perfection or priority of the Liens of
the Collateral Agent under this Agreement; or

     (v) (A) direct any party liable for any payment under any Collateral to make payment of any moneys
due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall
direct, (B) ask or demand for, and collect and receive payment of and receipt for, any moneys,
claims and other amounts due or to become due at any time in respect of or arising out of any
Collateral, (C) sign and indorse any invoice, freight or express bill, bill of lading, storage or
warehouse receipt, draft against debtors, assignment, verification, notice and other document in
connection with any Collateral, (D) commence and prosecute any suit, action or proceeding at law or
in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other
right in respect of any Collateral, (E) defend any actions, suits, proceedings, audits, claims,
demands, orders or disputes brought against such Grantor with respect to any Collateral if such
Grantor does not defend such action, suit, proceeding or other disputes or if the Collateral Agent
or any Related Person thereof believes that such Grantor is not pursuing such defense in a manner
that will maximize the recovery of the Secured Parties, (F) settle, compromise or adjust any such
actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection
therewith, give such discharges or releases as the Collateral Agent may deem necessary or
appropriate, (G) assign any Intellectual Property owned by the Grantors or any IP Licenses of the
Grantors throughout the world on such terms and conditions and in such manner as the Collateral
Agent shall in its sole discretion (exercised in a commercially reasonable manner) determine,
including the execution and filing of any document necessary to effectuate or record such
assignment and (H) generally, Sell, grant a Lien on, make any Contractual Obligation with respect
to and otherwise deal with, any Collateral as fully and completely as though the Collateral Agent
were the absolute owner thereof for all purposes and do, at the Collateral Agent’s option, at any
time or from time to time, all acts and things that the Collateral Agent deems necessary to
protect, preserve or realize upon any Collateral and the Secured Parties’ security interests
therein and to effect the intent of the Note Documents, all as fully and effectively as such
Grantor might do.

          (b) If any Grantor fails to perform or comply with any Contractual Obligation contained herein, the
Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such Contractual Obligation.

          (c) The expenses of the Collateral Agent incurred in connection with actions undertaken as provided
in this Section 7.1, together with interest thereon at a rate set forth in Section 2.9 (Interest)
of the Securities Purchase Agreement, from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the Collateral Agent on
demand.

          (d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by
virtue of this Section 7.1. All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.

23

 

     Section 7.2 Authorization to File Financing Statements. Each Grantor authorizes the Collateral
Agent and its Related Persons, at any time and from time to time, to file or record financing
statements, amendments thereto, and other filing or recording documents or instruments with respect
to any Collateral in such form and in such offices as the Collateral Agent reasonably determines
appropriate to perfect the security interests of the Collateral Agent under this Agreement, and
such financing statements and amendments may describe the Collateral covered thereby as “all assets
of the debtor”. A photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for filing or recording in
any jurisdiction.

     Section 7.3 Authority of Collateral Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to any action taken by
the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or resulting or arising out
of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed
by the Securities Purchase Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral
Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and
valid authority so to act or refrain from acting, and no Grantor shall be under any obligation or
entitlement to make any inquiry respecting such authority.

     Section 7.4
Duty; Obligations and Liabilities. (a) Duty of
Collateral Agent. The Collateral
Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession shall be to deal with it in the same manner as the Collateral Agent
deals with similar property for its own account. The powers conferred on the Collateral Agent
hereunder are solely to protect the Collateral Agent’s interest in the Collateral and shall not
impose any duty upon the Collateral Agent to exercise any such powers. The Collateral Agent shall
be accountable only for amounts that it receives as a result of the exercise of such powers, and
neither it nor any of its Related Persons shall be responsible to any Grantor for any act or
failure to act hereunder, except for their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction. In addition, the Collateral Agent shall not be
liable or responsible for any loss or damage to any Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency,
consignee or other bailee if such Person has been selected by the Collateral Agent in good faith.

          (b) Obligations and Liabilities with respect to Collateral. No Secured Party and no Related Person
thereof shall be liable for failure to demand, collect or realize upon any Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action whatsoever with
regard to any Collateral. The powers conferred on the Collateral Agent hereunder shall not impose
any duty upon any other Secured Party to exercise any such powers. The other Secured Parties shall
be accountable only for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their respective officers, directors, employees or agents shall
be responsible to any Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct as finally determined by a court of competent jurisdiction.

24

 

ARTICLE VIII

MISCELLANEOUS

     Section 8.1 Reinstatement. Each Grantor agrees that, if any payment made by any Loan Party or other
Person and applied to the Secured Obligations is at any time annulled, avoided, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be
refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured
Party to such Loan Party, its estate, trustee, receiver or any other party, including any Grantor,
under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent
of such payment or repayment, any Lien or other Collateral securing such liability shall be and
remain in full force and effect, as fully as if such payment had never been made. If, prior to any
of the foregoing, (a) any Lien or other Collateral securing such Grantor’s liability hereunder
shall have been released or terminated by virtue of the foregoing or (b) any provision of the
Guaranty hereunder shall have been terminated, cancelled or surrendered, such Lien, other
Collateral or provision shall be reinstated in full force and effect and such prior release,
termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise
affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such
obligation or the amount of such payment.

     Section 8.2
Release of Collateral. (a) At the time provided in
clause (b)(iii) of Section 10.10 of
the Securities Purchase Agreement, the Collateral shall be released from the Lien created hereby
and this Agreement and all obligations (other than those expressly stated to survive such
termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all rights to the Collateral
shall revert to the Grantors. Each Grantor is hereby authorized to file UCC amendments at such time
evidencing the termination of the Liens so released. At the request of any Grantor following any
such termination, the Collateral Agent shall deliver to such Grantor any Collateral of such Grantor
held by the Collateral Agent hereunder and execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence such termination.

          (b) If the Collateral Agent shall be directed or permitted pursuant to clause (i) or (ii) of
Section 10.10(b) of the Securities Purchase Agreement to release any Lien or any Collateral, such
Collateral shall be released from the Lien created hereby to the extent provided under, and subject
to the terms and conditions set forth in, such clauses (i) and (ii). In connection therewith, the
Collateral Agent, at the request of any Grantor, shall execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such release.

          (c) At the time provided in Section 10.10(a) of the Securities Purchase Agreement and at the
request of the Company, a Grantor shall be released from its obligations hereunder in the event
that all the Securities of such Grantor shall be Sold to any Person that is not an Affiliate of the
Company or its Subsidiaries in a transaction permitted by the Note Documents.

     Section 8.3 Independent Obligations. The obligations of each Grantor hereunder are independent of
and separate from the Secured Obligations and the Guaranteed Obligations. If any Secured Obligation
or Guaranteed Obligation is not paid when due, or upon any Event of Default, the Collateral Agent
may, at its sole election, proceed directly and at once, without notice (except as otherwise
provided herein or in any other Note Document), against any Grantor

25

 

and any Collateral to collect and recover the full amount of any Secured Obligation or
Guaranteed Obligation then due, without first proceeding against any other Grantor, any other Loan
Party or any other Collateral and without first joining any other Grantor or any other Loan Party
in any proceeding.

     Section 8.4 No Waiver by Course of Conduct. No Secured Party shall by any act (except by a written
instrument pursuant to Section 8.6), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by any Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that
such Secured Party would otherwise have on any future occasion.

     Section 8.5 Amendments in Writing. None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except in accordance with Section 11.1 of the
Securities Purchase Agreement; provided, however, that annexes to this Agreement may be
supplemented (but no existing provisions may be modified and no Collateral may be released) through
Pledge Amendments and Joinder Agreements, in substantially the form
of Annex 1 and Annex 2,
respectively, in each case duly executed by the Collateral Agent and each Grantor directly affected
thereby.

     Section 8.6
Additional Grantors; Additional Pledged Collateral. (a) Joinder Agreements. If, at the
option of the Company or as required pursuant to Section 7.10 of the Securities Purchase Agreement,
the Company shall cause any Subsidiary that is not a Grantor to become a Grantor hereunder, such
Subsidiary shall execute and deliver to the Collateral Agent a Joinder Agreement substantially in
the form of Annex 2 and shall thereafter for all purposes be a party hereto and have the same
rights, benefits and obligations as a Grantor party hereto on the date hereof.

     (b) Pledge Amendments. To the extent any Pledged Collateral constituting Collateral is acquired by
any Grantor after the date hereof, such Grantor shall deliver a pledge amendment duly executed by
the Grantor in substantially the form of Annex 1 (each, a “Pledge Amendment”). Such Grantor
authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement.

     Section 8.7 Notices. All notices, requests and demands to or upon the Collateral Agent or any
Grantor hereunder shall be effected in the manner provided for in Section 11.11 of the Securities
Purchase Agreement; provided, however, that any such notice, request or demand to or upon any
Grantor shall be addressed to the Company’s notice address set forth in such Section 11.11.

     Section 8.8 Successors and Assigns. This Agreement shall be binding upon the successors and assigns
of each Grantor and shall inure to the benefit of each Secured Party and their successors and
assigns; provided, however, that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the Collateral Agent.

26

 

     Section 8.9 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a single counterpart.
Delivery of an executed signature page of this Agreement by facsimile transmission or by Electronic
Transmission shall be as effective as delivery of a manually executed counterpart hereof.

     Section 8.10 Severability. Any provision of this Agreement being held illegal, invalid or
unenforceable in any jurisdiction shall not affect any part of such provision not held illegal,
invalid or unenforceable, any other provision of this Agreement or any part of such provision in
any other jurisdiction.

     Section 8.11 Governing Law. This Agreement 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 8.12
 Waiver Of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH, ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS  Section 8.12.

[SIGNATURE
PAGES FOLLOW]

27

 

          IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and Security Agreement to
be duly executed and delivered as of the date first above written.

	 	 	 	 	 
	 	THE FILM DEPARTMENT LLC

        as a Grantor

        By: The Film Department Holdings LLC,

        its sole member

 	 
	 	By:  	 	 
	 	 	Mark Gill, 

Chief Executive Officer 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Neil Sacker, 

President and Chief Operating Officer 	 
	 

	 	 	 	 	 
	 	THE FILM DEPARTMENT HOLDINGS LLC

        as a Grantor

 	 
	 	By:  	 	 
	 	 	Mark Gill, 

Chief Executive Officer 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Neil Sacker, 

President and Chief Operating Officer 	 

[SIGNATURE PAGE TO
GUARANTY AND SECURITY AGREEMENT FOR THE FILM DEPARTMENT’S
SECURITIES PURCHASE AGREEMENT]

 

 

	 	 	 	 	 

	 	 	 	 	 
	ACCEPTED AND AGREED

as of the date first above written:

GENERAL ELECTRIC CAPITAL CORPORATION,

        as Collateral Agent

 	 
	By:  	 	 
	 	Name:  	Greg Watts 	 
	 	Its: Duly Authorized Signatory 	 
	 

[SIGNATURE PAGE TO
GUARANTY AND SECURITY AGREEMENT FOR THE FILM DEPARTMENT’S
SECURITIES PURCHASE AGREEMENT]

 

 

ANNEX 1

TO

GUARANTY AND SECURITY AGREEMENT

FORM OF PLEDGE AMENDMENT

          This
PLEDGE AMENDMENT, dated as of
                    
     ,
20     , is delivered pursuant to
Section 8.6
of the Guaranty and Security Agreement, dated as of June 27, 2007, by The Film Department LLC, a
Delaware limited liability company (the “Company”), the undersigned Grantor and the other
Affiliates of the Company from time to time party thereto as Grantors in favor of General Electric
Capital Corporation (“GE Capital”), as collateral agent (in such capacity, together with
its successors and permitted assigns, the “Collateral Agent”) for the Secured Parties
referred to therein, and the other Secured Parties referred to therein (as amended, restated,
supplemented or otherwise modified from time to time, the “Guaranty and Security
Agreement”). Capitalized terms used herein without definition are used as defined in the
Guaranty and Security Agreement.

          The undersigned hereby agrees that this Pledge Amendment may be attached to the Guaranty and
Security Agreement and that the Pledged Collateral listed on Annex 1-A to this Pledge
Amendment shall be and become part of the Collateral referred to in the Guaranty and Security
Agreement and shall secure all Obligations of the undersigned.

          The undersigned hereby represents and warrants that each of the representations
and warranties contained in Sections 4.1, 4.2, 4.5 and 4.10 of the
Guaranty and Security Agreement is true and correct and as of the date hereof as if made on and as
of such date.

	 	 	 	 	 
	 	[GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

			
	To be used for pledge of Additional Pledged Collateral by existing Grantor.

A1-1

 

Annex 1-A

PLEDGED STOCK

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	NUMBER OF
	 	 	 	 	 	 	 	 	SHARES,
	 	 	 	 	 	 	 	 	UNITS OR
	ISSUER	 	CLASS	 	CERTIFICATE NO(S).	 	PAR VALUE	 	INTERESTS
	 
	 	 
	 	 
	 	 
	 	 

PLEDGED DEBT INSTRUMENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	PRINCIPAL
	ISSUER	 	DESCRIPTION OF DEBT	 	CERTIFICATE NO(S).	 	FINAL MATURITY	 	AMOUNT
	 
	 	 
	 	 
	 	 
	 	 

A1-2

 

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED

as of the date first above written:

GENERAL ELECTRIC CAPITAL CORPORATION

     as Collateral Agent

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

A1-3

 

	 	 	 	 	 

ANNEX 2

TO

GUARANTY AND SECURITY AGREEMENT

FORM OF
JOINDER AGREEMENT

          This
JOINDER AGREEMENT, dated as of
                    
     ,
20     , is delivered pursuant to Section 8.6
of the Guaranty and Security Agreement, dated as of June 27, 2007, by The Film Department LLC, a
Delaware limited liability company (the “Company”), and the Affiliates of the Company from
time to time party thereto as Grantors in favor of General Electric Capital Corporation
(“GE Capital”), as collateral agent (in such capacity, together with its successors and
permitted assigns, the “Collateral Agent”) for the Secured Parties referred to therein, and
the other Secured Parties referred to therein (as amended, restated, supplemented or otherwise
modified from time to time, the “Guaranty and Security Agreement”). Capitalized terms used
herein without definition are used as defined in the Guaranty and Security Agreement.

          By executing and delivering this Joinder Agreement, the undersigned, as provided in
Section 8.6 of the Guaranty and Security Agreement, hereby becomes a party to the Guaranty
and Security Agreement as a Grantor thereunder with the same force and effect as if originally
named as a Grantor therein and, without limiting the generality of the foregoing, as collateral
security for the prompt and complete payment and performance when due (whether at stated maturity,
by acceleration or otherwise) of the Secured Obligations of the undersigned, hereby mortgages,
pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants
to the Collateral Agent for the benefit of the Secured Parties a lien on and security interest in,
all of its right, title and interest in, to and under the Collateral of the undersigned and
expressly assumes all obligations and liabilities of a Grantor thereunder. The undersigned hereby
agrees to be bound as a Grantor for the purposes of the Guaranty and Security Agreement.

          The information set forth in Addenda to Schedules 1 through 3 attached hereto are
hereby added to the information set forth in Schedules 1 through 3 to the Guaranty and
Security Agreement. By acknowledging and agreeing to this Joinder Agreement, the undersigned hereby
agree that this Joinder Agreement may be attached to the Guaranty and Security Agreement and that
the Pledged Collateral listed on the attached Addenda shall be and become part of the Collateral
referred to in the Guaranty and Security Agreement and shall secure all Secured Obligations of the
undersigned.

          The undersigned hereby represents and warrants that each of the representations
and warranties contained in Article IV of the Guaranty and Security Agreement applicable to
it is true and correct on and as the date hereof as if made on and as of such date.

          IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement
to be duly executed and delivered as of the date first above written.

	 	 	 	 	 
	 	[ADDITIONAL GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

A2-1

 

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED

as of the date first above written:

[EACH GRANTOR PLEDGING ADDITIONAL COLLATERAL] 

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 
	GENERAL ELECTRIC CAPITAL CORPORATION

     as Collateral Agent

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

A2-2

 

	 	 	 	 	 

ANNEX 3

TO

GUARANTY AND SECURITY AGREEMENT

FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

          THIS [COPYRIGHT] [TRADEMARK] SECURITY AGREEMENT, dated as of                           , 20     , is made by
each of the entities listed on the signature pages hereof (each a “Grantor” and, collectively, the
“Grantors”), in favor of General Electric Capital Corporation (“GE Capital”), as
collateral agent (in such capacity, together with its successors and permitted assigns, the
“Collateral Agent”) for the Holders and each other Secured Party (each as defined in the
Securities Purchase Agreement referred to below).

W I T N E S S E T H:

          WHEREAS, pursuant to the Securities Purchase Agreement, dated as of June 27, 2007 (as the same
may be 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, as one
of the Guarantors, the Purchasers named therein and GE Capital, as collateral agent for the Secured
Parties referred to therein, the Company has issued and sold to the Purchasers named therein
$30,000,000 aggregate principal amount of its Secured Second Lien Notes due 2014 upon the terms and
subject to the conditions set forth therein;

          WHEREAS, each Grantor (other than the Company) has agreed, pursuant to a
Guaranty and Security Agreement of even date herewith in favor of the Secured Parties (as amended,
restated, supplemented or otherwise modified from to time to time, the “Guaranty and Security
Agreement”), to guarantee the Obligations (as defined in the Securities Purchase Agreement) of
the Company; and

          WHEREAS, all of the Grantors are party to the Guaranty and Security
Agreement pursuant to which the Grantors are required to execute and deliver this [Copyright]
[Trademark] Security Agreement;

          NOW, THEREFORE, in consideration of the premises and to induce the Purchasers and the
Collateral Agent to enter into the Securities Purchase Agreement and to induce the Holders to
purchase the notes to be issued and sold by the Company thereunder, each Grantor hereby agrees with
the Collateral Agent as follows:

     Section 1. Defined Terms. Capitalized terms used herein without definition are
used as defined in the Guaranty and Security Agreement.

     Section 2.
Grant of Security Interest in [Copyright]
[Trademark] Collateral.
Each Grantor, as collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such
Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the
Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a Lien
on and security interest in, all of its right, title and interest in, to and under the following
Collateral of such Grantor (the “[Copyright] [Trademark] Collateral”:

          (a) [all of its Film Collateral and Copyrights, including, without limitation, those referred
to on Schedule 1 hereto;

A3-1

 

          (b) all renewals, reversions and extensions of the foregoing; and

          (c) all income, royalties, proceeds and Liabilities at any time due or payable or asserted
under and with respect to any of the foregoing, including, without limitation, all rights to sue
and recover at law or in equity for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof.]

or

          (a)
[all of its Trademarks, including, without limitation, those
referred to on Schedule 1
hereto;

          (b) all renewals and extensions of the foregoing;

          (c) all goodwill of the business connected with the use of, and symbolized by, each such
Trademark; and

          (d) all income, royalties, proceeds and Liabilities at any time due or payable or asserted
under and with respect to any of the foregoing, including, without limitation, all rights to sue
and recover at law or in equity for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof.]

     Section 3. Guaranty and Security Agreement. The security interest granted
pursuant to this [Copyright] [Trademark] Security Agreement is granted in conjunction with the
security interest granted to the Collateral Agent pursuant to the Guaranty and Security Agreement
and each Grantor hereby acknowledges and agrees that the rights and remedies of the Collateral
Agent with respect to the security interest in the [Copyright] [Trademark] Collateral made and
granted hereby are more fully set forth in the Guaranty and Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth herein.

     Section 4. Grantor Remains Liable. Each Grantor hereby agrees that, anything
herein to the contrary notwithstanding (but subject to the provisions of the Guaranty and Security
Agreement), such Grantor shall assume full and complete responsibility for the prosecution,
defense, enforcement or any other necessary or desirable actions in connection with their
[Copyrights] [Trademarks] and IP Licenses subject to a security interest hereunder.

     Section 5. Counterparts. This [Copyright] [Trademark] Security Agreement may
be executed in any number of counterparts and by different parties in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart.

     Section 6. Governing Law. This [Copyright] [Trademark] Security Agreement 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.

[SIGNATURE PAGES FOLLOW]

A3-2

 

          IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Trademark] Security Agreement to
be executed and delivered by its duly authorized officer as of the date first set forth above.

	 	 	 	 	 
	 	Very truly yours,

[GRANTOR]

      as Grantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	ACCEPTED AND AGREED

as of the date first above written:

GENERAL ELECTRIC CAPITAL CORPORATION,

     as Collateral Agent

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

[SIGNATURE PAGE TO [COPYRIGHT] [TRADEMARK] SECURITY AGREEMENT]

A3-3

 

ACKNOWLEDGMENT OF GRANTOR

	 	 	 	 	 	 	 

	STATE OF

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	COUNTY OF

	 	 	)	 	 	 

     On this                      day of                           , 20      before me personally appeared
                                         ,
proved to me on the basis of satisfactory evidence to be the person who executed the foregoing
instrument on behalf of                                         , who being by me duly sworn did depose and say that he is an authorized
officer of said corporation, that the said instrument was signed on behalf of said corporation as
authorized by its Board of Directors and that he acknowledged said instrument to be the free act
and deed of said corporation.

 

Notary Public

[ACKNOWLEDGEMENT OF GRANTOR FOR [COPYRIGHT] [TRADEMARK] SECURITY AGREEMENT]

A3-4

 

SCHEDULE I

TO

[COPYRIGHT] [TRADEMARK] SECURITY AGREEMENT

[Copyright] [Trademark] Registrations

	A.	 	REGISTERED [COPYRIGHTS] [TRADEMARKS]
	 
	 	 	[Include Registration Number and Date]
	 
	B.	 	[COPYRIGHT] [TRADEMARK] APPLICATIONS
	 
	 	 	[Include Application Number and Date]

A3-I

 

ANNEX 4

TO

GUARANTY AND SECURITY AGREEMENT

FORM OF LABORATORY PLEDGEHOLDER AGREEMENT

          LABORATORY PLEDGEHOLDER AGREEMENT dated as of                     , 20___(the “Agreement”) among                          
               
(the “Laboratory”), (the “Completion Guarantor”),
[The Film Department LLC, a Delaware limited liability
company] [Applicable PSC] (the
“Company”), General Electric Capital Corporation, as collateral agent for certain secured creditors
of the Company (in such capacity, together with its successors and assigns, the “Second Lien Collateral Agent”),
and General Electric Capital Corporation, as collateral agent for certain
secured creditors of the Company (in such capacity, together with its successors and assigns, the
“First Lien Collateral Agent”).

     WHEREAS, the Company has entered into certain secured financing arrangements dated as of June 27,
2007 (the documents and instruments evidencing such arrangements, as the same are amended,
restated, supplemented or otherwise modified from time to time, the “First Lien Agreements”) with
certain secured creditors and the First Lien Collateral Agent;

     WHEREAS, the Company has entered into certain additional secured financing arrangements dated as of
June 27, 2007 (the documents and instruments evidencing such arrangements, as the same are amended,
restated, supplemented or otherwise modified from time to time, the “Second Lien Agreements”) with
certain secured creditors and the Second Lien Collateral Agent;

     WHEREAS, pursuant to the terms of the security documents entered into in connection with the First
Lien Agreements and the Second Lien Agreement, the Company has granted to the First Lien Collateral
Agent and the Second Lien Collateral Agent a security interest in and to certain rights and
properties (including, but not limited to, the Collateral as said term is hereinafter defined) with
respect to the feature-length motion picture presently entitled “                                         ” (the “Picture”);

     WHEREAS, the Completion Guarantor has entered into a completion guaranty agreement dated as of
                    
___, 20 ___(the “Completion Guaranty”), with respect to the Picture;

     WHEREAS, the Laboratory now has or will, from time to time, have in its possession or under its
control negatives, dupe negatives, fine grain prints, soundtracks, positive prints (cutouts and
trims excepted) and sound and other physical properties in connection with the Picture and the
trailer for the Picture, whether or not in completed form (all of the foregoing being hereinafter
called the “Collateral”); and

     WHEREAS, the Company, the Completion Guarantor, the First Lien Collateral Agent and the Second Lien
Collateral Agent desire that the Laboratory act for the Completion Guarantor, the First Lien
Collateral Agent and the Second Lien Collateral Agent as pledgeholder of the Collateral, and all
physical properties thereof in Laboratory’s possession or under its control, as security for the
indebtedness and obligations of the Company under the First Lien Agreements and the Second Lien
Agreements, and the Laboratory is willing to so act as such pledgeholder;

     NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and
in further consideration of the engagement of the Laboratory to perform laboratory services in
connection with the Picture, it is agreed, for the express benefit of the

A4-I

 

Company, the Completion Guarantor, the First Lien Collateral Agent and the Second Lien Collateral
Agent and their respective successors and assigns, as follows:

     1. Unless and until the Laboratory receives a written notice from each of (a) the First Lien
Collateral Agent to the effect that all of the indebtedness and obligations (such indebtedness and
said obligations herein collectively referred to as the “First Lien Obligations”) of the
Company under or in respect of the First Lien Agreements have been paid and performed in full and
(b) the Second Lien Collateral Agent to the effect that all of the indebtedness and obligations
(such indebtedness and said obligations herein collectively referred to as the “Second Lien
Obligations”) of the Company under or in respect of the Second Lien Agreements have been paid
and performed in full, and (c) the Completion Guarantor to the effect that all obligations of the
Company in respect of the Picture (the “Guarantor Obligations”) have been paid and performed in
full, the following shall apply:

          1.1 The Completion Guarantor, the First Lien Collateral Agent and the Second Lien Collateral Agent
hereby appoint the Laboratory as pledgeholder of all items of the Collateral that may from time to
time come into its possession or under its control, and the Laboratory agrees to hold all such
items of the Collateral as pledgeholder for the Completion Guarantor (as security for the Guarantor
Obligations), the First Lien Collateral Agent (as security for the First Lien Obligations) and the
Second Lien Collateral Agent (as security for the Second Lien Obligations), subject to the
following terms and conditions:

               (a) The
Laboratory will keep all such items of the Collateral at its
laboratories located at                     
                                                     and
 will not deliver any of such Collateral to anyone except as
may be permitted hereunder.

               (b) Unless and until the Laboratory shall have received written notice from the First Lien
Collateral Agent (or, if the Laboratory has received written notice of the satisfaction of the
First Lien Obligations from the First Lien Collateral Agent, the Second Lien Collateral Agent) or
the Completion Guarantor to the contrary, the Laboratory will permit the Company and the Completion
Guarantor to take the following actions in the ordinary course of business; provided,
however, that the Laboratory will not permit the Company or the Completion Guarantor to
remove any of the original negatives of the Picture to another laboratory absent the receipt by the
Laboratory of the prior written consent of the First Lien Collateral Agent (or, if the Laboratory
has received written notice of the satisfaction of the First Lien Obligations from the First Lien
Collateral Agent, the Second Lien Collateral Agent), or except as may be permitted hereunder:

                    (i) to obtain the usual “dailies” essential for the editing, production, and previewing of the
Picture;

                    (ii) to have access to the negatives and other pre-print materials (but not remove them from the
Laboratory’s possession without the prior written consent of the of the First Lien Collateral Agent
(or, if the Laboratory has received written notice of the satisfaction of the First Lien
Obligations from the First Lien Collateral Agent, the Second Lien Collateral Agent), not to be
unreasonably withheld, or except for the purpose of delivery thereof to another laboratory that has
executed a laboratory pledgeholder agreement in substantially the
form hereof, mutatis mutandis
(and the First Lien Collateral Agent or the Second Lien Collateral Agent, as the case may

[LABORATORY PLEDGEHOLDER AGREEMENT]

THE FILM DEPARTMENT LLC

[INSERT NAME OF FILM]

A4-II

 

be, and the Completion Guarantor agree to notify the Laboratory upon receipt of such laboratory
pledgeholder agreement) for the purpose of inspecting, cutting, scoring or similar purposes;

                    (iii) to provide access to all film and/or sound materials and to direct the making of positive
prints of the Picture and trailers thereof and such duplicating material thereof as the Company
shall be required to furnish to its distributors;

                    (iv) to deliver to a recognized optical or sound laboratory, so long as such optical or sound
laboratory is acceptable to the First Lien Collateral Agent (or, if the Laboratory has received
written notice of the satisfaction of the First Lien Obligations from the First Lien Collateral
Agent, the Second Lien Collateral Agent) and the Completion Guarantor (but only if each of such
optical or sound laboratory executes and delivers to the First Lien Collateral Agent, the Second
Lien Collateral Agent and the Completion Guarantor a laboratory pledgeholder agreement in
substantially the form hereof, mutatis mutandis (and the First Lien Collateral Agent or the Second
Lien Collateral Agent, as the case may be, and the Completion Guarantor agree to notify the
Laboratory upon receipt of such laboratory pledgeholder agreement), from time to time, portions of
the negative of the Picture for purposes of performing special optical or sound work; and

                    (v) with the prior written consent of the First Lien Collateral Agent (or, if the Laboratory has
received written notice of the satisfaction of the First Lien Obligations from the First Lien
Collateral Agent, the Second Lien Collateral Agent) and the Completion Guarantor, not to be
unreasonably withheld, to forward any of the above-mentioned property to another laboratory (but
only if each of such laboratory executes and delivers to the First Lien Collateral Agent, the
Second Lien Collateral Agent and the Completion Guarantor a laboratory pledgeholder agreement in
the form hereof, mutatis mutandis (and the First Lien Collateral Agent or the Second Lien
Collateral Agent, as the case may be, and the Completion Guarantor agree to notify the Laboratory
upon receipt of such laboratory pledgeholder agreement) and provided that the Laboratory’s charges
are paid in full.

               (c) The Laboratory agrees that it holds all items of Collateral within its possession or under its
control as pledgeholder hereunder, subject only to the joint instructions of the First Lien
Collateral Agent (or, if the Laboratory has received written notice of the satisfaction of the
First Lien Obligations from the First Lien Collateral Agent, the Second Lien Collateral Agent), for
the sole benefit of the First Lien Collateral Agent, the Second Lien Collateral Agent and/or the
Completion Guarantor.

               (d) Unless and until the Laboratory shall have received written notice from the First Lien
Collateral Agent (or, if the Laboratory has received written notice of the satisfaction of the
First Lien Obligations from the First Lien Collateral Agent, the Second Lien Collateral Agent) to
the contrary, if the Laboratory has received written notice from the Completion Guarantor that it
has taken over production, then the Laboratory shall allow the Completion Guarantor to exercise the
rights set forth in clauses (i), (ii), (iii), (iv) and (v) of Paragraph 1.1(b) above, and if and
when the Laboratory shall receive written notice from the Completion Guarantor that the Completion
Guarantor has exercised its right to take over the production of the Picture, then the Laboratory
will not permit the Company to have any further access to, or direct any further

[LABORATORY PLEDGEHOLDER AGREEMENT]

THE FILM DEPARTMENT LLC

[INSERT NAME OF FILM]

A4-III

 

actions to be taken with respect to, the Collateral in the Laboratory’s possession or under its
control or to obtain any prints thereof.

          1.2 The Company agrees to deliver (and the Completion Guarantor, if it has exercised its right to
take over the production of the Picture, agrees to deliver) the daily rushes and other exposed
original negative materials and sound materials for the Picture to the Laboratory as soon as
practicable.

          1.3 The Laboratory agrees that in its capacity as pledgeholder it is or will be holding possession
of the Picture and the Collateral and the physical properties thereof constructively for the First
Lien Collateral Agent, the Second Lien Collateral Agent and the Completion Guarantor. Until such
time as each of the First Lien Collateral Agent and the Second Lien Collateral Agent notifies the
Laboratory that all First Lien Obligations and Second Lien Obligations, as the case may be, have
been satisfied, the Laboratory will upon the written request of the First Lien Collateral Agent
(or, if the Laboratory has received written notice of the satisfaction of the First Lien
Obligations from the First Lien Collateral Agent, the Second Lien Collateral Agent), hold a sale or
sales of the Collateral or any part thereof in accordance with the direction and instruction of the
First Lien Collateral Agent or the Second Lien Collateral Agent, as the case may be, (at the
requesting party’s expense), or in the alternative will cause to be delivered or made available to
the First Lien Collateral Agent (or, if the Laboratory has received written notice of the
satisfaction of the First Lien Obligations from the First Lien Collateral Agent, the Second Lien
Collateral Agent), or its nominee the Collateral and all physical properties thereof in the
Laboratory’s possession or under its control for the purpose of enabling the First Lien Collateral
Agent or the Second Lien Collateral Agent, as the case may be, to deal with same in accordance with
its agreements with the Company and applicable law.

          1.4 The Company hereby waives any claim for damages or otherwise that the Company may have against
the Laboratory for any acts that the Laboratory may take as pledgeholder pursuant to the direction
of the First Lien Collateral Agent, the Second Lien Collateral Agent or the Completion Guarantor
pursuant hereto, except to the extent resulting from the gross negligence or willful misconduct of
the Laboratory.

          1.5 The Laboratory shall hold and/or process the Collateral under its standard terms of business,
except that any liens arising in favor of the Laboratory shall be limited to an aggregate amount of
[Fifty] Thousand Dollars [($50,000)] at any one time outstanding for processing and/or storing the
Collateral and/or materials delivered therefrom for the Company or its designee and/or the
Completion Guarantor. Except as provided in the prior sentence, the rights of the Laboratory shall
be subordinate to the rights and security interest granted to the First Lien Collateral Agent, the
Second Lien Collateral Agent or the Completion Guarantor in respect of the Collateral; and the
rights of the Laboratory against the Company and the Completion Guarantor shall in all events be
limited to the Laboratory’s charges for work, labor and services ordered by and rendered for the
Company and/or the Completion Guarantor, and the materials ordered by and furnished to the Company
and/or the Completion Guarantor solely in connection with the Collateral. All such services and
materials ordered by the Company and/or the Completion Guarantor shall be at the expense of the
person ordering the same, and the Laboratory agrees to look solely to such person for payment of
such charges as may be incurred. Neither the First Lien Collateral Agent nor the Second

[LABORATORY PLEDGEHOLDER AGREEMENT]

THE FILM DEPARTMENT LLC

[INSERT NAME OF FILM]

A4-IV

 

Lien Collateral Agent shall be responsible for any such charges, except for materials and services
ordered by the First Lien Collateral Agent or the Second Lien Collateral Agent, as the case may be.

               (a) The Laboratory will not look to either the First Lien Collateral Agent or the Second Lien
Collateral Agent nor assert any claim or lien against either the First Lien Collateral Agent, the
Second Lien Collateral Agent, the Picture or the Collateral by reason of any work, labor, material
or services that the Laboratory has in the past or may in the future perform for or furnish to the
Company, the Completion Guarantor or any other person.

               (b) The Laboratory will not refuse to honor any of the orders or instructions of the First Lien
Collateral Agent or the Second Lien Collateral Agent by reason of any unpaid charges incurred by
the Company, the Completion Guarantor and/or their designees or others.

          1.6 Each of the First Lien Collateral Agent and the Second Lien Collateral Agent agrees to give
prompt written notice to the Laboratory if, and when, the First Lien Obligations and the Second
Lien Obligations, as the case may be, have been paid and performed in full and the security
interests granted by the Company in favor of the First Lien Collateral Agent and the Second Lien
Collateral Agent in the Collateral have terminated. Upon receipt of such written notice from the
First Lien Collateral Agent and the Second Lien Collateral Agent, the Laboratory’s obligations
hereunder as pledgeholder for the First Lien Collateral Agent and Second Lien Collateral Agent
shall terminate and the Laboratory shall thereafter hold the Collateral constructively for the
Completion Guarantor and the Company and shall thereafter deal with the Collateral solely upon and
subject to the instructions of the Completion Guarantor and/or the Company. The Completion
Guarantor agrees to give prompt written notice to the Laboratory if, and when, the Guarantor
Obligations have been paid and performed in full and the security interests of Completion Guarantor
in the Collateral have terminated. Upon receipt of such written notice from Completion Guarantor
(or if the Completion Guarantor has not advanced funds pursuant to the Completion Guaranty), the
Laboratory’s obligations hereunder as pledgeholder for Completion Guarantor shall terminate and,
provided Laboratory’s obligations hereunder as pledgeholder for the First Lien Collateral Agent and
the Second Lien Collateral Agent have terminated, the Laboratory shall thereafter hold the
Collateral constructively for the Company and shall thereafter deal with the Collateral solely upon
and subject to the instructions of the Company.

     2. The rights of the Completion Guarantor hereunder shall (a) at all times be junior and
subordinate to the rights of the First Lien Collateral Agent and the Second Lien Collateral Agent
hereunder and (b) terminate if prior to the delivery of the Picture by the Company to its
distributors pursuant to its distribution agreements with such distributors, the Completion
Guarantor has notified the Laboratory in writing that it has not advanced or does not anticipate
that it will have to advance its own funds to complete the Picture. The rights of the First Lien
Collateral Agent and the Second Lien Collateral Agent shall remain unaffected by any termination of
the rights of the Completion Guarantor hereunder.

     3. If the Completion Guarantor takes over the production of the Picture and requests that the
Collateral be moved to a different laboratory, then the First Lien Collateral Agent and the Second
Lien Collateral Agent each agree to consent to such move so long as a laboratory pledgeholder
agreement (in the same form as this Agreement) is executed by all parties hereto (other

[LABORATORY PLEDGEHOLDER AGREEMENT]

THE FILM DEPARTMENT LLC

[INSERT NAME OF FILM]

A4-V

 

than Laboratory) and by the replacement laboratory and so long as the replacement laboratory is
acceptable to the First Lien Collateral Agent and the Second Lien Collateral Agent (such approval
not to be unreasonably withheld) and provided that all of the Laboratory’s charges have been paid
in full.

     4. Notices. Any notice shall be conclusively deemed to have been received by any party
hereto and be effective on the day on which it is received by hand delivery or facsimile by such
party at the mailing address or facsimile number set forth below (or at such other mailing address
or facsimile number as such party shall specify to the other parties in writing) or five (5)
Business Days after deposit in the mail, post paid and first-class, or ten (10) Business Days if
across national borders, addressed to such party at its mailing address set forth below:

	 	 	 	 	 

	 

	 	The Company:
	 	The Film Department LLC
	 

	 	 	 	8439 Sunset Boulevard, 2nd Floor
	 

	 	 	 	Hollywood, California 90069
	 

	 	 	 	Attention: Mr. Mark Gill and Mr. Neil Sacker
	 

	 	 	 	Telecopy: (866) 311-4894
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Loeb & Loeb LLP
	 

	 	 	 	10100 Santa Monica Boulevard, Suite 2200
	 

	 	 	 	Los Angeles, California 90067
	 

	 	 	 	Attention: Susan Z. Williams, Esq.
	 

	 	 	 	Telecopy: (310) 282-2200

	 	 	 	 	 	 	 	 	 

	 

	 	The Completion	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Guarantor:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Telecopy:
	 	(___) ___– ___	 	 

	 	 	 	 	 

	 

	 	The First Lien
	 	General Electric Capital Corporation
	 

	 	Collateral Agent:
	 	2325 Lakeview Parkway, Suite 700
	 

	 	 	 	Alpharetta, Georgia 30004
	 

	 	 	 	Attention: Greg Watts
	 

	 	 	 	Telecopy: (678) 624-7903
	 
	 	 	 	 
	 

	 	with a copy to:
	 	General Electric Capital Corporation
	 

	 	 	 	201 Merritt Seven, 4th Floor
	 

	 	 	 	Norwalk, Connecticut 06851
	 

	 	 	 	Attention: Steve Burke
	 

	 	 	 	Telecopy: (203) 956-4547
	 
	 	 	 	 
	 

	 	with a copy to:
	 	General Electric Capital Corporation
	 

	 	 	 	2325 Lakeview Parkway, Suite 700

[LABORATORY PLEDGEHOLDER AGREEMENT]

THE FILM DEPARTMENT LLC

[INSERT NAME OF FILM]

A4-VI

 

	 	 	 	 	 

	 

	 	 	 	Alpharetta, Georgia 30004
	 

	 	 	 	Attention: MCE Counsel
	 

	 	 	 	Telecopy: (678) 624-7902
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Gibson, Dunn & Crutcher LLP
	 

	 	 	 	2029 Century Park East
	 

	 	 	 	Los Angeles, California 90067-3026
	 

	 	 	 	Attention: Lawrence J. Ulman, Esq.
	 

	 	 	 	Telecopier: (310) 551-8741
	 
	 	 	 	 
	 

	 	The Second Lien
	 	General Electric Capital Corporation
	 

	 	Collateral Agent:
	 	2325 Lakeview Parkway, Suite 700
	 

	 	 	 	Alpharetta, Georgia 30004
	 

	 	 	 	Attention: Greg Watts
	 

	 	 	 	Telecopy: (678) 624-7903
	 
	 	 	 	 
	 

	 	With a copy to:
	 	General Electric Capital Corporation
	 

	 	 	 	201 Merritt Seven, 4th Floor
	 

	 	 	 	Norwalk, Connecticut 06851
	 

	 	 	 	Attention: Steve Burke
	 

	 	 	 	Telecopy: (203) 956-4547
	 
	 	 	 	 
	 

	 	with a copy to:
	 	General Electric Capital Corporation
	 

	 	 	 	2325 Lakeview Parkway, Suite 700
	 

	 	 	 	Alpharetta, Georgia 30004
	 

	 	 	 	Attention: MCE Counsel
	 

	 	 	 	Telecopy: (678) 624-7902
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Gibson, Dunn & Crutcher LLP
	 

	 	 	 	2029 Century Park East
	 

	 	 	 	Los Angeles, California 90067-3026
	 

	 	 	 	Attention: Lawrence J. Ulman, Esq.
	 

	 	 	 	Telecopier: (310) 551-8741

	 	 	 	 	 	 	 	 	 

	 

	 	The Laboratory:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Telecopy:
	 	(___) ___- ___	 	 

     5. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective
successors and assigns.

     6. This Agreement shall be construed in accordance with and governed by the laws of the State of
[New York] [California]. No amendment to this Agreement shall be effective unless in

[LABORATORY PLEDGEHOLDER AGREEMENT]

THE FILM DEPARTMENT LLC

[INSERT NAME OF FILM]

A4-VII

 

writing and signed by each party hereto. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile or other electronic transmission shall be effective as delivery of a
manually executed counterpart thereof.

SIGNATURES
ON NEXT PAGE

[LABORATORY PLEDGEHOLDER AGREEMENT]

THE FILM DEPARTMENT LLC

[INSERT NAME OF FILM]

A4-VIII

 

     IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and
year first above written.

	 	 	 	 	 	 	 

	“Company”	 	“Completion Guarantor”
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:	 	Name:
	Title:	 	Title:
	 
	 	 	 	 	 	 
	“First Lien Collateral Agent”	 	“Second Lien Collateral Agent”
	GENERAL ELECTRIC CAPITAL	 	GENERAL ELECTRIC CAPITAL
	CORPORATION	 	CORPORATION
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:	 	Name:
	Title:	 	Title:
	 
	 	 	 	 	 	 
	“Laboratory”	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name:	 	 	 	 
	Title:	 	 	 	 

[LABORATORY PLEDGEHOLDER AGREEMENT]

THE FILM DEPARTMENT LLC

[INSERT NAME OF FILM]

A4-IX

 

EXHIBIT F 

FORM OF INTERCREDITOR AGREEMENT 

 

 

INTERCREDITOR AGREEMENT

          INTERCREDITOR AGREEMENT (this “Agreement”) dated as of June 27, 2007, by and between the
First Lien Agent and the Second Lien Agent (each as defined below).

RECITALS:

          WHEREAS, The Film Department LLC, a Delaware limited liability company (together with its
successors and assigns, including any receiver, trustee or debtor-in-possession, the
“Borrower”), the Lenders (as defined therein) (together with their successors and assigns,
the “First Lien Lenders”), General Electric Capital Corporation (“GE Capital”), as
administrative agent and collateral agent, are parties to a Credit Agreement dated as of June 27,
2007 (as amended or otherwise modified from time to time in accordance with the terms of this
Agreement, the “Initial First Lien Credit Agreement”), pursuant to which the First Lien
Lenders have made and will from time to time make loans and provide other financial accommodations
to the Borrower;

          WHEREAS, the Borrower, the Purchasers (as defined therein) (together with their successors and
assigns and the Second Lien Agent, the “Second Lien Creditors”) and GE Capital, as
collateral agent are parties to a Securities Purchase Agreement dated as of June 27, 2007 (as
amended or otherwise modified from time to time in accordance with the terms of this Agreement, the
“Initial Second Lien Purchase Agreement”), pursuant to which the Second Lien Creditors have
purchased certain notes issued by the Borrower;

          WHEREAS, the Borrower and the other Obligors (as defined herein) have granted to the First Lien
Agent, for the benefit of the First Lien Creditors (as defined below), a Lien (as defined below) on
substantially all of their assets and properties, all as more particularly described in the First
Lien Documents (as defined below);

          WHEREAS, the Borrower and the other Obligors have granted to the Second Lien Agent, for the benefit
of the Second Lien Creditors, a Lien on substantially all of their assets and properties, all as
more particularly described in the Second Lien Documents (as defined below);

          WHEREAS, the Second Lien Agent, on behalf of the Second Lien Creditors, and the First Lien Agent,
on behalf of the First Lien Creditors, wish to set forth their agreement as to certain of their
respective rights and obligations with respect to the assets and properties of the Borrower and the
other Obligors and their understanding relative to their respective positions in certain assets and
properties of the Borrower and the other Obligors; and

          NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the
parties hereto agree as follows:

Section 1. Definitions.

     1.1 General Terms. As used in this Agreement, the following terms shall have the
respective meanings indicated below, such meanings to be applicable equally to both the
singular and the plural forms of the terms defined:

          “Agent” means the First Lien Agent or the Second Lien Agent, as applicable.

          “Agent’s Notice” shall have the meaning set forth in Section 5.1.

 

          “Agreement” shall have the meaning set forth in the preamble hereof.

          “Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
U.S.C. §§101 et seq.

          “Bankruptcy Law” means the Bankruptcy Code and any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law.

          “Blockage Period” shall have the meaning set forth in Section 2.13.

          “Borrower” shall have the meaning set forth in the recitals hereof.

          “Business Day” means any day of the year that is not a Saturday, a Sunday or a day on which banks
are required or authorized to close in New York City.

          “Collateral” means all assets and properties of any kind whatsoever, real or personal, tangible or
intangible and wherever located, of any Obligor, whether now owned or hereafter acquired, upon
which a Lien (including, without limitation, any Liens granted in any Insolvency Proceeding) is now
or hereafter granted or purported to be granted by such Person in favor of a Secured Creditor, as
security for all or any part of the Obligations.

          “Debt Action” means (a) the filing of a lawsuit by any Secured Creditor solely to collect the
Obligations owed to such Secured Creditor and not to exercise their secured creditor remedies in
respect of the collateral, (b) the demand by any Secured Creditor for accelerated payment of any
and all of the Obligations owed to such Secured Creditor, (c) the filing of any notice of claim and
the voting of any such claim in any Insolvency Proceeding involving an Obligor, (d) the filing of
any motion in any Insolvency Proceeding permitted under Section 5 or (e) the filing of any
defensive pleading in any Insolvency Proceeding consistent with the terms of this Agreement.

          “Designated Permitted Second Lien Disposition” shall have the meaning set forth in
Section 2.10(a).

          “DIP Financing” shall have the meaning set forth in Section 6.2.

          “DIP Liens” shall have the meaning set forth in Section 6.2.

          “Disposition” means any sale, lease, exchange, transfer or other disposition, and “Dispose” and
“Disposed of’ shall have correlative meanings.

          “Distribution” means, with respect to any indebtedness or obligation, (a) any payment or
distribution by any Person of cash, securities or other property, by setoff or otherwise, on
account of such indebtedness or obligation or (b) any redemption, purchase or other acquisition of
such indebtedness or obligation by any Person.

          “Documents” means the First Lien Documents and the Second Lien Documents, or any of them.

          “Enforcement Action” means (a) any action by any Secured Creditor to foreclose on the Lien of such
Person in any Collateral, (b) any action by any Secured Creditor to take possession of, or sell or
otherwise realize upon, or to exercise any other rights or remedies with respect to, any
Collateral, including any Disposition after the occurrence of an Event of Default of any Collateral
by an Obligor with

2

 

the consent of, or at the direction of, a Secured Creditor, (c) the taking of any other actions by
a Secured Creditor against any Collateral, including the taking of control or possession of, or the
exercise of any right of setoff with respect to, any Collateral and/or (d) the commencement by any
Secured Creditor of any legal proceedings or actions against or with respect to any Obligor or any
of such Obligor’ s property or assets or any Collateral to facilitate any of the actions described
in clauses (a), (b) and (c) above, including the commencement of any Insolvency Proceeding;
provided that this definition shall not include any Debt Action.

          “Event of Default” means each “Event of Default” or similar term, as such term is defined in any
First Lien Document or any Second Lien Document.

          “Final Order” means an order of the Bankruptcy Court or any other court of competent jurisdiction
as to which the time to appeal, petition for certiorari, or move for reargument or rehearing has
expired and as to which no appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending or as to which any right to appeal, petition for certiorari,
reargue, or rehear shall have been waived in writing in form and substance satisfactory to the
First Lien Agent, or, in the event that an appeal, writ of certiorari, or reargument or rehearing
thereof has been filed or sought, such order of the Bankruptcy Court or other court of competent
jurisdiction shall have been affirmed by the highest court to which such order was appealed, or
from which certiorari, reargument or rehearing was sought, and the time to take any further appeal,
petition for certiorari or move for reargument or rehearing shall have expired; provided that the
possibility that a motion under Rule 59 or Rule 60 of the Federal Rules of Civil Procedure or any
analogous rule under the Federal Rules of Bankruptcy Procedure or applicable state court rules of
civil procedure, may be filed with respect to such order shall not cause such order not to be a
Final Order.

          “First Lien Agent” means GE Capital, in its capacity as agent for the First Lien Creditors under
the First Lien Documents, and its successors and assigns in such capacity (including one or more
other agents or similar contractual representatives for one or more lenders that at any time
succeeds to or refinances, replaces or substitutes for any or all of the First Lien Obligations at
any time and from time to time).

          “First Lien Avoidance” shall have the meaning set forth in Section 6.4.

          “First Lien Credit Agreement” means (a) the Initial First Lien Credit Agreement and (b) each loan
or credit agreement evidencing any initial or subsequent replacement, substitution, renewal, or
Refinancing of the Obligations under the Initial First Lien Credit Agreement, in each case as the
same may from time to time be amended, amended and restated, supplemented, modified, replaced,
substituted, renewed or Refinanced in accordance with the terms of this Agreement.

          “First Lien Creditors” means the First Lien Agent, the First Lien Lenders and the other Persons
from time to time holding First Lien Obligations.

          “First Lien Deficiency” means any portion of the First Lien Obligations consisting of an allowed
unsecured claim under Section 506(a) of the Bankruptcy Code (or any similar provision under any
other Bankruptcy Law) as determined by a Final Order.

          “First Lien Documents” means the First Lien Credit Agreement, all Loan Documents (as such term, or
any like term, is defined in the First Lien Credit Agreement) and all other agreements, documents
and instruments at any time executed and/or delivered by any Obligor or any other Person with, to
or in favor of the First Lien Agent or any First Lien Creditor in connection therewith or related
thereto, including such documents evidencing successive Refinancings of the First Lien Obligations,
in

3

 

each case, as amended, amended and restated, supplemented, modified, replaced, substituted or
renewed from time to time in accordance with the terms of this Agreement.

          “First Lien Lenders” shall have the meaning set forth in the recitals hereto.

          “First Lien Letter of Credit Obligations” means all outstanding obligations incurred by or owing to
the First Lien Creditors, whether direct or indirect, contingent or otherwise, due or not due, in
connection with the issuance of letters of credit by a First Lien Creditor or another issuer
pursuant to the First Lien Documents or the purchase of a participation with respect to any letter
of credit, including any unpaid reimbursement obligations in respect thereof. The amount of such
First Lien Letter of Credit Obligations shall equal the maximum amount that may be payable at such
time or at any time thereafter by or to the First Lien Creditors thereupon or pursuant thereto.

          “First Lien Loans” means any loans or advances outstanding under the First Lien
Documents.

          “First Lien Obligations” means all obligations, liabilities and indebtedness of every kind, nature
and description owing by one or more of the Obligors to one or more of the First Lien Creditors
evidenced by or arising under (a) one or more of the First Lien Documents (including any First Lien
Loans, First Lien Letter of Credit Obligations and Hedging Obligations), whether direct or
indirect, absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, including principal, interest, charges, fees, costs, indemnities and
reasonable expenses, however evidenced, and whether as principal, surety, endorser, guarantor or
otherwise, whether now existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of the First Lien Credit Agreement and whether arising before, during
or after the commencement of any Insolvency Proceeding with respect to one or more of the Obligors
(and including the payment of any principal, interest, fees, cost, expenses and other amounts
(including default rate interest) which would accrue and become due but for the commencement of
such Insolvency Proceeding whether or not such amounts are allowed or allowable in whole or in part
in any such Insolvency Proceeding) and (b) a DIP Financing.

          “First Lien Secured Claims” means any portion of the First Lien Obligations not
constituting a First Lien Deficiency.

          “First Lien Termination Date” means the date on which all First Lien Obligations have been Paid in
Full.

          “GE Capital” shall have the meaning set forth in the recitals hereto.

          “Hedging Obligations” means all obligations of any Obligor under and in respect of any Secured
Hedging Agreement (or any similar or equivalent term) under and as defined in the First Lien Credit
Agreement.

          “Initial First Lien Credit Agreement” shall have the meaning set forth in the recitals hereto.

          “Initial Second Lien Purchase Agreement” shall have the meaning set forth in the recitals hereto.

          “Insolvency Proceeding” means, as to any Obligor, any of the following: (a) any case or proceeding
with respect to such Person under the Bankruptcy Code or any other federal or state bankruptcy,
insolvency, reorganization or other law affecting creditors’ rights or any other or similar

4

 

proceedings seeking any stay, reorganization, arrangement, composition or readjustment of the
obligations and indebtedness of such Obligor, (b) any proceeding seeking the appointment of any
trustee, receiver, liquidator, custodian or other insolvency official with similar powers with
respect to such Obligor or any of its assets, (c) any proceeding for liquidation, dissolution or
other winding up of the business of such Obligor or (d) any assignment for the benefit of creditors
or any marshalling of assets of such Obligor.

          “Junior Adequate Protection Liens” shall have the meaning set forth in Section 6.2(b).

          “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit
arrangement, encumbrance, easement, lien (statutory or otherwise), security interest or other
security arrangement and any other preference, priority or preferential arrangement of any kind or
nature whatsoever, including any conditional sale contract or other title retention arrangement,
the interest of a lessor under a capital lease and any synthetic or other financing lease having
substantially the same economic effect as any of the foregoing.

          “Limited Blockage Period” shall have the meaning set forth in Section 2.13.

          “Maximum First Lien Principal Amount” means, as of any date of determination, (a) $140,000,000
minus (b) the sum of all permanent reductions of revolving loan commitments under the First Lien
Documents after the date hereof plus (c) $107,500,000 plus (d) solely as a
component of a DIP Financing, the amount of any DIP Financing underSection 6.2(a)
plus(e) interest, fees, costs, expenses, indemnities and other amounts payable pursuant to
the terms of the First Lien Documents, whether or not the same are added to the principal amount of
the First Lien Obligations and including the same as would accrue and become due but for the
commencement of an Insolvency Proceeding, whether or not such amounts are allowed or allowable in
whole or in part in any such Insolvency Proceeding.

          “New First Lien Agent” shall have the meaning set forth in Section 4.5(a).

          “New First Lien Documents” shall have the meaning set forth in Section 4.5(a).

          “New First Lien Obligations” shall have the meaning set forth in Section 4.5(a).

          “New Second Lien Agent” shall have the meaning set forth in Section 4.5(b).

          “New Second Lien Documents” shall have the meaning set forth in Section 4.5(b).

          “New Second Lien Obligations” shall have the meaning set forth in Section 4.5(b).

          “Obligations” means the First Lien Obligations and the Second Lien Obligations, or any of them.

          “Obligor” means the Borrower and each other Person liable on or in respect of the Obligations or
that has granted a Lien on any property or assets as Collateral, together with such Person’s
successors and assigns, including a receiver, trustee or debtor-in-possession on behalf of such
Person.

          “Paid in Full” or “Payment in Full” means, with respect to any Obligations, that: (a) all of such
Obligations (other than contingent indemnification obligations for which no underlying claim has
been asserted) have been indefeasibly paid, performed or discharged in full (with all such
Obligations consisting of monetary or payment obligations having been paid in full in cash), (b) no
Person has any further right to obtain any loans, letters of credit, bankers’ acceptances, or other
extensions of credit under

5

 

the documents relating to such Obligations and (c) any and all letters of credit, bankers’
acceptances or similar instruments issued under such documents have been cancelled and returned (or
backed by standby guarantees or cash collateralized) in accordance with the terms of such
documents.

          “Permitted Collateral Sale” means any Disposition of Collateral so long as such Disposition is
permitted under the First Lien Credit Agreement. The term Permitted Collateral Sale shall not
include any Disposition occurring or effected under any circumstance or condition described in the
definition of “Release Event.”

          “Permitted Second Lien Disposition” shall mean a Disposition (excluding any collection of any
Collateral consisting of an obligation) of any Collateral in connection with an Enforcement Action
by any Second Lien Creditors after the expiration of the Standstill Period and subject to the terms
of Section 3.1 of this Agreement which Disposition is commercially reasonable in all respects and
undertaken on an arm’s length basis with parties which are not Affiliates of any of the Second Lien
Creditors.

          “Person” means an individual, partnership, corporation (including a business trust and a public
benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited
liability company, unincorporated association, joint venture, governmental authority or any other
entity or regulatory body.

          “Purchase Notice” shall have the meaning set forth in Section 5.1.

          “Refinance”, “Refinancings” and “Refinanced” means, in respect of any Obligations, to issue other
indebtedness in exchange or replacement for such Obligations, in whole or in part.

          “Release Documents” shall have the meaning set forth in Section 2.5.

          “Release Event” means the taking of any Enforcement Action by the First Lien Creditors against all
or any portion of the Collateral (including a Disposition conducted by any Obligor with the consent
of the First Lien Agent) or, after the occurrence and during the continuance of an Insolvency
Proceeding by or against any Obligor, the entry of an order of the Bankruptcy Court pursuant to
Section 363 of the Bankruptcy Code authorizing the sale of all or any portion of the Collateral.

          “Requisite Second Lien Creditors” means Second Lien Creditors holding more than 50% of the
outstanding principal balance of the Second Lien Loans.

          “Second Lien Agent” means GE Capital in its capacity as collateral agent for the Second Lien
Creditors under the Second Lien Documents, and its permitted successors and assigns in such
capacity (including one or more other collateral agents or similar contractual representatives for
one or more lenders or securities purchasers that at any time succeeds to or refinances, replaces
or substitutes for any or all of the Second Lien Obligations at any time and from time to time).

          “Second Lien Creditors” shall have the meaning set forth in the recitals hereto.

          “Second Lien Default” means any “Event of Default” under the Second Lien
Documents.

          “Second Lien Default Notice” means with respect to any Second Lien Default, a written notice from
the Second Lien Agent to the First Lien Agent, with a copy to the Obligors, indicating that such
Second Lien Default has occurred and describing such Second Lien Default in reasonable detail.

6

 

          “Second Lien Deficiency” means any portion of the Second Lien Obligations consisting of an allowed
unsecured claim under Section 506(a) of the Bankruptcy Code (or any similar provision under any
other Bankruptcy Law) as determined by a Final Order.

          “Second Lien Disposition Notice” shall have the meaning set forth in Section 2.10(a).

          “Second Lien Documents” means the Second Lien Purchase Agreement, any notes issued pursuant thereto
or exchanged therefor, all other Note Documents (as such term, or any like term, is defined in the
Second Lien Purchase Agreement) and all other agreements, documents and instruments (including any
notes issued and sold pursuant to any securities purchase agreement) at any time executed and/or
delivered by any Obligor or any other Person with, to or in favor of the Second Lien Agent or any
Second Lien Creditor in connection therewith or related thereto, including such documents
evidencing successive Refinancings of the Second Lien Obligations in each case, as amended, amended
and restated, supplemented, modified, replaced, substituted or renewed from time to time in
accordance with the terms of this Agreement.

          “Second Lien Loans” means the loans or advances outstanding under, or indebtedness evidenced by,
the Second Lien Documents.

          “Second Lien Obligations” means all obligations, liabilities and indebtedness of every kind, nature
and description owing by one or more Obligors to one or more of the Second Lien Creditors evidenced
by or arising under one or more of the Second Lien Documents (including the Second Lien Loans),
whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or
secondary, liquidated or unliquidated, including principal, interest, charges, fees, costs,
indemnities and reasonable expenses, however evidenced, whether as principal, surety, endorser,
guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during
or after the initial or any renewal term of the Second Lien Purchase Agreement and whether arising
before, during or after the commencement of any Insolvency Proceeding with respect to any Obligor
(and including the payment of interest which would accrue and become due but for the commencement
of such Insolvency Proceeding, whether or not such interest is allowed or allowable in whole or in
part in any such Insolvency Proceeding).

          “Second Lien Payment Default” means an “Event of Default” under the Second Lien
Documents as a result of the failure to pay when due, any principal interest or fees under the
Second Lien Documents.

          “Second Lien Purchase Agreement” means (a) the Initial Second Lien Purchase Agreement and (b) each
loan, credit or securities purchase agreement evidencing any replacement, substitution, renewal, or
Refinancing of the Obligations under the Second Lien Purchase Agreement, in each case as amended,
restated, supplemented, replaced, substituted or Refinanced in accordance with the terms of this
Agreement.

          “Second Lien Secured Claims” means any portion of the Second Lien Obligations not constituting a
Second Lien Deficiency.

          “Secured Claims” means the First Lien Secured Claims and/or the Second Lien Secured Claims as the
context may require.

          “Secured Creditors” means the First Lien Creditors and the Second Lien Creditors, or any of them.

7

 

          “Senior Adequate Protection Liens” shall have the meaning set forth in Section 6.2(a).

          “Senior Covenant Default” means an “Event of Default” arising under the First Lien
Documents that does not constitute a Senior Payment Default.

          “Senior Payment Default” means a default in the payment of the principal of, premium, if any, or
interest on, or fees or any other amount payable with respect to, the First Lien Obligations beyond
any applicable grace period.

          “Standstill Period” means the period commencing on the date of a Second Lien Default and ending
upon the date which is the earlier of (a) 180 days after the First Lien Agent has received a Second
Lien Default Notice with respect to such Second Lien Default and (b) the date on which the First
Lien Obligations have been Paid in Full; provided that in the event that as of any day during such
180 days, no Second Lien Default is continuing, then the Standstill Period shall be deemed not to
have commenced.

          “UCC” means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable
jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as in effect
in the State of New York.

          “UCC Notice” shall have the meaning set forth in Section 3.1.

     1.2 Certain Matters of Construction. The words “hereof’, “herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement and section references are to this Agreement unless
otherwise specified. For purposes of this Agreement, the following additional rules of
construction shall apply: (a) wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter, (b) the term “including” shall not be limiting or exclusive, unless
specifically indicated to the contrary, (c) all references to statutes and related regulations
shall include any amendments of same and any successor statutes and regulations and (d) unless
otherwise specified, all references to any instruments or agreements, including references to
any of this Agreement and the Documents, shall include any and all modifications or amendments
thereto and any and all extensions or renewals thereof, in each case, made in accordance with
the terms hereof.

Section 2. Security Interests; Priorities; Payment Blockage.

     2.1 Priorities. Each Secured Creditor hereby acknowledges that other Secured Creditors have
been granted Liens upon the Collateral to secure their respective Obligations. The Liens of the
First Lien Agent and the other First Lien Creditors on the Collateral are and shall be senior and
prior in right to the Liens of the Second Lien Agent and the other Second Lien Creditors on the
Collateral, and such Liens of the Second Lien Agent and the other Second Lien Creditors on the
Collateral are and shall be junior and subordinate
to the Liens of the First Lien Agent and the other First Lien Creditors. The priorities of the
Liens provided in this Section 2.1 shall not be altered or otherwise affected by any
amendment, modification, supplement, extension, renewal, restatement, replacement or Refinancing of
any of the Obligations, nor by any action or inaction which any of the Secured Creditors may take
or fail to take in respect of the Collateral.

     2.2 No Alteration of Priority. The priorities set forth in this Agreement are applicable
irrespective of the order or time of attachment, or the order, time or manner of perfection or lack
of

8

 

perfection, or the order or time of filing or recordation of any document or instrument, or other
method of perfecting a Lien in favor of each Secured Creditor in any Collateral, and
notwithstanding any conflicting terms or conditions which may be contained in any of the Documents.

     2.3 Perfection; Contesting Liens. Each Secured Creditor shall be solely responsible for
perfecting and maintaining the perfection of its Lien in the Collateral in which such Secured
Creditor has been granted a Lien. The foregoing provisions of this Agreement are intended solely to
govern the respective Lien priorities as among the Secured Creditors and shall not impose on any
Secured Creditor any obligations in respect of the Disposition of proceeds of any Collateral that
would conflict with prior perfected claims therein in favor of any other Person or any order or
decree of any court or governmental authority or any applicable law. Each Secured Creditor agrees
that it will not institute or join in any contest of the validity, perfection, priority or
enforceability of the Liens of the other Secured Creditor in the Collateral or the enforceability
of the First Lien Obligations or the Second Lien Obligations; provided that nothing in this
Agreement shall be construed to prevent or impair the rights of the First Lien Agent or the Second
Lien Agent to enforce this Agreement, including the provisions hereof relating to Lien priority.

     2.4 Proceeds of Collateral. Any Collateral or proceeds thereof received by any Second Lien
Creditor including, without limitation, any such Collateral constituting proceeds, or any payment
or Distribution, that may be received by any Second Lien Creditor (a) in connection with the
exercise of any right or remedy (including any right of setoff) with respect to the Collateral, (b)
in connection with any insurance policy claim or any condemnation award (or deed in lieu of
condemnation), (c) from the collection or other Disposition of, or realization on, the Collateral,
whether or not pursuant to an Insolvency Proceeding or (d) in violation of this Agreement
(including any amount not permitted to be paid or received pursuant to Section 2.13 hereof), shall
be segregated and held in trust and promptly paid over to the First Lien Agent, for the benefit of
the First Lien Creditors, in the same form as received, with any necessary endorsements, and each
Second Lien Creditor hereby authorizes the First Lien Agent to make any such endorsements as agent
for the Second Lien Agent (which authorization, being coupled with an interest, is irrevocable).
All Collateral and proceeds thereof received by any First Lien Creditor prior to the First Lien
Termination Date shall be applied as provided in the First Lien Documents, and Collateral and all
proceeds thereof received after the First Lien Termination Date shall be forthwith paid over, in
the kind or funds and currency received, to the Second Lien Creditors for application to the Second
Lien Obligations (unless otherwise required by law or court order). Without limiting the generality
of the foregoing, the First Lien Agent shall have the right to hold any proceeds of Collateral and
any other sums it may receive from time to time on account of the First Lien Obligations, to pay
the costs of completing any motion picture to which the Borrower has committed or with respect to
which the Borrower is obligated to pay a portion of the costs (regardless of whether the Borrower
is so obligated at the time such proceeds are received) and any such funds so held shall not be
deemed applied in reduction of the First Lien Obligations.

     2.5 Release of Collateral Upon Permitted Collateral Sale. The Second Lien Agent, on behalf
of the Second Lien Creditors, shall at any time in connection with any Permitted Collateral Sale:
(a) upon the request of the First Lien Agent with respect to the Collateral subject to such
Permitted Collateral Sale, release or otherwise terminate its Liens on such Collateral (and/or, in
the case of a Permitted Collateral Sale consisting of the sale or disposition of all or
substantially all of the equity interests or assets of any Guarantor, release such Guarantor from
its obligations under the relevant Documents); (b) promptly deliver such terminations of financing
statements, partial lien releases, mortgage satisfactions and discharges, endorsements, assignments
or other instruments of transfer, termination or release (collectively, “Release Documents”) and
take such further actions as the First Lien Agent shall reasonably require in order to release
and/or terminate such Second Lien Agent’s Liens on the Collateral (or release such Guarantor)
subject to such Permitted Collateral Sale; provided that if the closing of the Disposition

9

 

of the Collateral is not consummated within 60 days from the proposed closing date or any agreement
governing such Permitted Collateral Sale is terminated by any of the parties thereto, the First
Lien Agent shall, upon the Second Lien Agent’s request, promptly return all Release Documents to
the Second Lien Agent; and (c) be deemed to have consented under the Second Lien Documents to such
Permitted Collateral Sale free and clear of the Second Lien Agent’s security interest (it being
understood that the Second Lien Agent shall still, subject to the terms of this Agreement, have a
security interest with respect to the proceeds of such Collateral) and to have waived the
provisions of the Second Lien Documents to the extent necessary to permit such transaction.

     2.6 Release of Collateral Upon Release Event. The Second Lien Agent, on behalf of the
Second Lien Creditors, shall, at any time in connection with a Release Event with respect to any
Collateral: (a) upon the request of the First Lien Agent with respect to the Collateral subject to
such Release Event (which request will specify the principal proposed terms of the sale and the
type and amount of consideration expected to be received in connection therewith), release or
otherwise terminate its Liens on such Collateral (and/or, in the case of a Disposition consisting
of the sale or disposition of all or substantially all of the equity interests or assets of any
Guarantor, release such Guarantor from its obligations under the relevant Documents), to the extent
the Disposition of such Collateral is either by (i) the First Lien Agent or its agents or
representatives or (ii) any Obligor with the consent of the First Lien Creditors, (b) be deemed to
have consented under the Second Lien Documents to such Disposition free and clear of the Second
Lien Agent’s Liens (it being understood that the Second Lien Agent shall still, subject to the
terms of this Agreement, have a security interest with respect to the proceeds of such Collateral)
and to have waived the provisions of the Second Lien Documents to the extent necessary to permit
such transaction and (c) deliver such Release Documents and take such further actions as First Lien
Agent may reasonably require in connection therewith; provided that, (i) such release by
the Second Lien Creditors shall not extend to or otherwise affect any of the rights of the Second
Lien Creditors to the proceeds from any such Disposition of Collateral, (ii) the First Lien
Creditors shall promptly apply such proceeds to permanently pay the First Lien Obligations until
the same have been Paid in Full, (iii) after such application, any excess proceeds from such
Disposition shall be applied in accordance with the provisions of Section 2.4 hereof and (iv) no
such release and/or authorization documents shall be delivered (A) to any Obligor or (B) more than
2 Business Days prior to the date of the closing of the Disposition of such Collateral;
provided further that if the closing of the Disposition of the Collateral subject
to such Release Event is not consummated within 60 days of the proposed date of closing or any
agreement governing such Disposition is terminated, the First Lien Agent shall promptly, upon
Second Lien Agent’s request, return all Release Documents to the Second Lien Agent.

     2.7 Power of Attorney. The Second Lien Agent, on behalf of each Second Lien Creditor,
hereby irrevocably constitutes and appoints the First Lien Agent and any officer of the First Lien
Agent, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Second Lien Agent and in the name of
the Second Lien Agent or in the First Lien Agent’s own name, from
time to time in the First Lien Agent’s discretion, for the purpose of carrying out the terms of
Sections 2.5 and 2.6 hereof, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to accomplish the
purposes of such Sections, including any Release Documents, and, in addition, to take any and all
other appropriate and commercially reasonable action for the purpose of carrying out the terms of
such Sections, such power of attorney being coupled with an interest and irrevocable until the
First Lien Termination Date. The Second Lien Agent hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in this Section
2.7. No Person to whom this power of attorney is presented, as authority for the First Lien
Agent to take any action or actions contemplated hereby, shall be required to inquire into or seek
confirmation from any Second Lien Creditor as to the authority of the First Lien Agent to take any
action described herein, or as to the existence of or fulfillment of any condition to this power of
attorney, which is intended to grant to the

10

 

First Lien Agent the authority to take and perform the actions contemplated herein. The Second
Lien Agent irrevocably waives any right to commence any suit or action, in law or equity, against
any Person which acts in reliance upon or acknowledges the authority granted under this power of
attorney.

     2.8 Waiver. Each of the First Lien Agent, on behalf of each of the First Lien Creditors, and the
Second Lien Agent, on behalf of each of the Second Lien Creditors, (a) waives any and all notice of
the creation, renewal, extension or accrual of any of the Obligations under the Documents and
notice of or proof of reliance by the Secured Creditors upon this Agreement and protest, demand for
payment or notice except to the extent otherwise specified herein and (b) acknowledges and agrees
that the other Secured Creditors have relied upon the Lien priority and other provisions hereof in
entering into the Documents and in making funds available to the Borrower thereunder.

     2.9 Notice of Interest In Collateral. This Agreement is intended, in part, to constitute an
authenticated notification of a claim by each Secured Creditor to the other Secured Creditors of an
interest in the Collateral in accordance with the provisions of Sections 9-611 and 9-621 of the
UCC.

     2.10 Permitted Second Lien Dispositions. (a) If, after the expiration of the Standstill Period and
subject to Section 3.1 of this Agreement, the Second Lien Agent seeks to consummate any Permitted
Second Lien Disposition in connection with any Enforcement Action that is permitted hereunder, the
Second Lien Agent shall provide notice to the First Lien Agent of its election to consummate such a
Permitted Second Lien Disposition, which will specify the principal proposed terms of the sale,
identity of the expected purchasers (if known) and the type and amount of consideration expected to
be received in connection therewith (a “Second Lien Disposition Notice”). Within 10 Business Days
of its receipt of a Second Lien Disposition Notice, the First Lien Agent shall provide written
notice to the Second Lien Agent whether the First Lien Agent (i) will release its Liens on the
Collateral that is the subject of such Permitted Second Lien Disposition or (ii) intends to
commence an Enforcement Action with respect to all or any portion of the Collateral. If the First
Lien Agent notifies the Second Lien Agent that it has elected not to release its Liens on the
Collateral that is the subject of such Permitted Second Lien Disposition and that it does not
intend to commence an Enforcement Action (a “Designated Permitted Second Lien Disposition”) then,
the provisions of any other section of this Agreement to the contrary notwithstanding, the proceeds
of such Designated Permitted Second Lien Disposition shall be applied to the Second Lien Loan
Obligations, until paid in full; provided that the First Lien Creditors shall be deemed to have
waived the provisions of the First Lien Documents to the extent necessary to permit such Designated
Permitted Second Lien Disposition.

     (b) In the case of any Permitted Second Lien Disposition (other than a Designated Permitted Second
Lien Disposition) as to which the First Lien Agent has not notified the Second Lien Agent that the
First Lien Agent intends to commence an Enforcement Action with respect to all or any part of the
Collateral (and as to which the First Lien Agent does not thereafter commence any such Enforcement
Action), the First Lien Agent
and the First Lien Lenders shall (i) upon the request of the Second Lien Agent with respect to the
Collateral subject to any Permitted Second Lien Disposition, and concurrent with such Permitted
Second Lien Disposition, release or otherwise terminate its Liens on such Collateral, (ii) be
deemed to have consented under the First Lien Documents to such Disposition free and clear of the
First Lien Creditors’ Liens (it being understood that the First Lien Creditors shall still, but
subject to this Agreement, have a security interest with respect to the proceeds of such
Collateral) and to have waived the provisions of the First Lien Documents to the extent necessary
to permit such transaction) and (iii) deliver such Release Documents and take such further actions
as the Second Lien Agent may reasonably require in connection therewith; provided, however, that
subject to and in accordance with Section 2.4 hereof, the Second Lien Agent shall cause to be paid
and/or delivered directly to the First Lien Agent all proceeds of any Permitted Second Lien
Disposition (other than a Designated Permitted Second Lien

11

 

Disposition, which shall be applied as provided in clause (a) above) for application in accordance
with Section 2.4.

     (c) Notwithstanding anything to the contrary contained herein, no such Release Documents shall be
required to be delivered (i) to any Obligor or (ii) more than 2 Business Days prior to the date of
the closing of the Permitted Second Lien Disposition; and provided, further, that if the closing of
the Disposition of the Collateral subject to such Permitted Second Lien Disposition is not
consummated within 5 Business Days of the proposed closing date or the Second Lien Creditors or
relevant purchasers cease to diligently pursue consummation of the Permitted Second Lien
Disposition, the Second Lien Agent shall promptly return all such Release Documents to the First
Lien Agent.

     2.11 New Liens. So long as the First Lien Obligations have not been Paid in Full, the parties
hereto agree that no additional Liens shall be granted or permitted on any asset of the Borrower or
any other Obligor to secure any Second Lien Obligation unless, subject to the terms of this
Agreement, immediately after giving effect to such grant or concurrently therewith, a senior and
prior Lien shall be granted on such asset to secure the First Lien Obligations. To the extent that
the foregoing provisions are not complied with for any reason, without limiting any other rights
and remedies available to the First Lien Agent and/or the First Lien Creditors, the Second Lien
Agent, on behalf of the Second Lien Creditors, agrees that any amounts received by or distributed
to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.11
shall be subject to the terms of this Agreement.

     2.12 Similar Liens and Agreements. The parties hereto acknowledge and agree that (subject to the
preceding Section 2.11) it is their intention that the Collateral securing the First Lien
Obligations and the Collateral securing the Second Lien Obligations as of the date hereof be
identical in all material respects. In furtherance of the foregoing, and subject to the preceding
Section 2.11, the parties hereto agree:

          (a) to cooperate in good faith in order to determine, upon any request by the First Lien Agent or
the Second Lien Agent, the specific assets included in the Collateral securing
their respective Obligations, the steps taken to perfect the Liens thereon and the identity of the
respective parties obligated under any Document;

          (b) that the documents, agreements and instruments creating or evidencing the Liens of such parties
in the Collateral, as of the date hereof, are in all material respects substantively similar, other
than with respect to the relative priority of the Liens created or evidenced thereunder; and

          (c) any Lien obtained by any Secured Creditor in respect of any judgment obtained in respect of any
Obligations shall be subject in all respects to the terms of this Agreement.

     2.13 Payment Blockages. (a) Anything contained in the Second Lien Documents to the contrary
notwithstanding, the Borrower may not make and the Second Lien Creditors may not receive any
payment on account of the principal of, premium, if any, or interest on, or fees or any other
amount payable in respect of the Second Lien Obligations if, at the time of, or after giving effect
to, such payment:

          (i) a Senior Payment Default exists, the Second Lien Agent and the Borrower shall have received
written notice of such default and such Senior Payment Default shall not have been cured or waived
in accordance with the terms of the First Lien Documents (the period during which such conditions
exists being referred to as a “Blockage Period”); or

12

 

          (ii) the Borrower and the Second Lien Agent shall have received a written notice from the First
Lien Agent stating that a Senior Covenant Default then exists and is continuing, each such Senior
Covenant Default shall not have been cured or waived in accordance with the terms of the First Lien
Documents and 180 days shall not have elapsed since the date such notice was received (the period
during which such conditions exists being referred to as a “Limited Blockage Period”).

          (b) The Borrower may resume making payments on account of the principal of,
premium, if any, or interest on, or fees or any other amount payable in respect of the Second Lien
Obligations (and make any such payments missed due to the existence of a Blockage Period or a
Limited
Blockage Period) in respect of the Second Lien Obligations upon the expiration of the Blockage
Period or
Limited Blockage Period, whether by cure or waiver of the applicable Senior Payment Default or
Senior
Covenant Default or expiration of the 180 day period with respect to the Limited Blockage Period.

          (c) Any provision of this Section 2.13 to the contrary notwithstanding:

          (i) The Borrower shall not be prohibited from making, and the Second Lien Creditors shall not be
prohibited from receiving, payments during a Limited Blockage Period for more than an aggregate of
180 days within any period of 360 consecutive days; and

          (ii) The failure of the Borrower to make any payment with respect to the Second Lien Obligations by
reason of the operation of this Section 2.13 shall be construed as preventing the Second Lien
Creditors from declaring an “Event of Default” under the applicable Second Lien Documents in
connection with such payment.

Nothing in this Section 2.13 shall prevent the Borrower from paying, or the Second Lien Creditors
from receiving, capitalized non-cash interest in accordance with the promissory notes evidencing
the Borrower’s obligation to repay the principal amount of the Second Lien Obligations.

          (d) Except as expressly permitted in Section 2.13(a) above, the Borrower will not (and it will not
allow any other Obligor to) make any payment of any of the Second Lien Obligations, or take any
other action, in contravention of the provisions of this Agreement.

Section 3. Enforcement of Security.

     3.1 Management of Collateral. Subject to the other terms and conditions of this Agreement, the
First Lien Creditors shall have the exclusive right to manage, perform and enforce the terms of the
First Lien Documents with respect to the Collateral, to exercise and enforce all privileges and
rights thereunder according to their sole discretion and the exercise of their sole business
judgment, including the exclusive right to take or retake control or possession of the Collateral
and to hold, prepare for sale, process, Dispose of, or liquidate the Collateral and to incur
expenses in connection with such Disposition and to exercise all the rights and remedies of a
secured lender under the UCC of any applicable jurisdiction. In conducting any public or private
sale under the UCC, the First Lien Agent shall give the Second Lien Agent such notice (a “UCC
Notice”) of such sale as may be required by the applicable UCC; provided, however, that 10 days’
notice shall be deemed to be commercially reasonable notice. Except as specifically provided in
this Section 3.1 or 3.3 below, notwithstanding any rights or remedies available to a Second Lien
Creditor under any of the Second Lien Documents, applicable law or otherwise, no Second Lien
Creditor shall, directly or indirectly, take any Enforcement Action; provided, that, subject at all times
to the provisions of Section 2, upon the expiration of the applicable Standstill Period, the Second
Lien Creditors may take any Enforcement Action (provided that they give the First Lien Agent at
least 10 Business Days written notice prior to taking such Enforcement Action); provided, however,
that

13

 

notwithstanding the expiration of the Standstill Period or anything herein to the contrary, in no
event shall any Second Lien Creditor exercise or continue to exercise any such rights or remedies,
or commence or petition for any such action or proceeding (including any foreclosure action or
proceeding or any Insolvency Proceeding) if the First Lien Agent or any other First Lien Creditor
shall have commenced the enforcement or exercise of any rights or remedies with respect to any of
the Collateral or any such action or proceeding (including, without limitation, any of the
following (if undertaken and pursued to consummate a Disposition of such Collateral within a
commercially
reasonable time): the solicitation of bids from third parties to conduct the liquidation of all or
any material portion of the Collateral, the engagement or retention of sales brokers, marketing
agents, investment bankers, accountants, auctioneers or other third parties for the purpose of
valuing, marketing, promoting or selling all or any material portion of the Collateral, the
notification of account debtors to make payments to the First Lien Agent or its agents, the
initiation of any action to take possession of all or any material portion of the Collateral or the
commencement of any legal proceedings or actions against or with respect to the foreclosure and
sale of all or any material portion of the Collateral), or diligently attempting in good faith to
vacate any stay prohibiting an Enforcement Action with respect to all or any material portion of
the Collateral or diligently attempting in good faith to vacate any stay prohibiting an Enforcement
Action.

     3.2 Notices of Default. Each Agent shall give to the other Agent concurrently with the giving
thereof to any Obligor (a) a copy of any written notice by any Secured Creditor of an Event of
Default under any of its Documents or a written notice of demand for payment from any Obligor and
(b) a copy of any written notice sent by such Secured Creditor to any Obligor stating such Secured
Creditor’s intention to exercise any material enforcement rights or remedies against such Obligor,
including written notice pertaining to any foreclosure on all or any material part of the
Collateral or other judicial or non- judicial remedy in respect thereof, and any legal process
served or filed in connection therewith; provided that the failure of any Agent to give such
required notice shall not result in any liability to such Agent or affect the enforceability of any
provision of this Agreement, including the relative priorities of the Liens of the Secured
Creditors as provided herein, and shall not affect the validity or effectiveness of any such notice
as against any Obligor; provided, further, that the foregoing shall not in any way impair any
claims that any Secured Creditor may have against any other Secured Creditor as a result of any
failure of any Agent to provide a UCC Notice in accordance with the provisions of this Agreement
and applicable law (including without limitation any liability that any Secured Creditor may have
to any other Secured Creditor as a result of any such failure). Each Agent will provide such
information as it may have to the other Agent as the other may from time to time reasonably request
concerning the status of the exercise of any Enforcement Action and each Agent shall be available
on a reasonable basis during normal business hours to review with the other Agent alternatives
available in exercising such rights, including, but not limited to, advising each other of any
offers which may be made from time to time by prospective purchasers of the Collateral; provided
that (i) the failure of any party to do any of the foregoing shall not affect the relative
priorities of the Agent’s respective Liens as provided herein or the validity or effectiveness of
any notices or demands as against any Borrower or any Obligor and (ii) in no event will the First
Lien Agent or any First Lien Creditor have any obligation to obtain the consent of any Second Lien
Creditor with respect to any actions taken or contemplated to be taken (or not taken) with respect
to any Enforcement Action. Each Obligor, by its acknowledgment hereto, hereby consents and agrees
to each Secured Creditor providing any such information to the other Secured Creditors and to such
actions by the Secured Creditors and waives any rights or claims against any Secured Creditors
arising as a result of such information or actions.

     3.3 Permitted Actions. Section 3.1 shall not be construed to limit or impair in any way the right
of: (a) any Secured Creditor to bid for or purchase Collateral at any private or judicial
foreclosure upon such Collateral initiated by any Secured Creditor, (b) any Secured Creditor to
join (but not control) any foreclosure or other judicial lien enforcement proceeding with respect
to the Collateral initiated by another Secured Creditor for the sole purpose of protecting such
Secured Creditor’s Lien on the

14

 

Collateral, so long as it does not delay or interfere with the exercise by such other Secured
Creditor of its rights under this Agreement, the Documents and under applicable law and (c) the
Second Lien Creditors to receive any remaining proceedings of Collateral after the First Lien
Obligations have been Paid in Full. Any proceeds of Collateral received in connection with any such
Enforcement Action shall be applied in accordance with
Section 2.4 of this Agreement.

     3.4 Collateral In Possession.

          (a) In the event that the First Lien Agent takes possession of or has “control” (as such term is
used in the UCC as in effect in each applicable jurisdiction) over any Collateral for purposes of
perfecting its Lien therein, the First Lien Agent shall be deemed to be holding such Collateral as
representative for the Secured Creditors, including the Second Lien Creditors, solely for purposes
of perfection of its Lien under the UCC; provided that the First Lien Agent shall not have any duty
or liability to protect or preserve any rights pertaining to any of the Collateral for the Second
Lien Creditors. Promptly following the First Lien Termination Date, the First Lien Agent shall,
upon the request of the Second Lien Agent, deliver the remainder of the Collateral, if any, in its
possession to the designee of the Second Lien Agent (except as may otherwise be required by
applicable law or court order).

          (b) In the event that any Second Lien Creditor takes possession of or has “control” (as such term
is used in the UCC as in effect in each applicable jurisdiction) over any Collateral for purposes
of perfecting its Lien therein, such Second Lien Creditor shall be deemed to be holding such
Collateral as representative for the Secured Creditors, including the First Lien Creditors, solely
for purposes of perfection of its Lien under the UCC; provided that such Second Lien Creditor shall
not have any duty or liability to protect or preserve any rights pertaining to any of the
Collateral for the First Lien Creditors.

          (c) It is understood and agreed that this Section 3.4 is intended solely to assure continuous
perfection of the Liens granted under the applicable Documents, and nothing in this Section 3.4
shall be deemed or construed as altering the priorities or obligations set forth elsewhere in this
Agreement. The duties of each party under this Section 3.4 shall be mechanical and administrative
in nature, and no party shall have, or be deemed to have, by reason of this Agreement or otherwise
a fiduciary relationship in respect of the other party.

     3.5 Waiver of Marshalling and Similar Rights. Each Secured Creditor, to the fullest extent
permitted by applicable law, waives as to each other Secured Creditor any requirement regarding,
and agrees not to demand, request, plead or otherwise claim the benefit of, any marshalling,
appraisement, valuation or other similar right that may otherwise be available under applicable
law.

     3.6 Insurance and Condemnation Awards. So long as the First Lien Termination Date has not
occurred, the First Lien Agent shall have the exclusive right, subject to the rights of
the Obligors under the First Lien Documents, to settle and adjust claims in respect of Collateral
under policies of insurance and to approve any award granted in any condemnation or similar
proceeding, or any deed in lieu of condemnation, in respect of the Collateral. After the occurrence
of the First Lien Termination Date, the Second Lien Agent shall have the exclusive right, subject
to the rights of the Obligors under the Second Lien Documents, to settle and adjust claims in
respect of Collateral under policies of insurance and to approve any award granted in condemnation
or similar proceeding, or any deed in lieu of condemnation, in respect of the Collateral.

Section 4. Covenants

     4.1 Amendment of First Lien Documents: Additional First Lien Documents. (a) The First Lien
Creditors may at any time and from time to time and without consent of or notice to any Second

15

 

Lien Creditor, without incurring any liability to any Second Lien Creditor and without impairing or
releasing any rights or obligations hereunder or otherwise, amend, restate, supplement, modify,
substitute, renew or replace any or all of the First Lien Documents; provided, however, that
without the consent of the Requisite Second Lien Creditors, the First Lien Creditors shall not
amend, restate, supplement, modify substitute, renew or replace any or all of the First Lien
Documents to (i) directly increase the interest rates on the First Lien Obligations to an amount
greater than 3.0% per annum above rates as are in effect on the date hereof (excluding, without
limitation, fluctuations in underlying rate indices and imposition of a default rate of 2% per
annum), (ii) change the final maturity date of the First Lien Obligations to a date later than
December 27, 2013 or (iii) increase the principal amount of the First Lien Obligations in excess of
the Maximum First Lien Principal Amount, other than as a result of the capitalization of accrued
interest and expenses.

          (b) The Second Lien Agent (for itself and on behalf of each Second Lien Creditor) acknowledges and
agrees that the Obligors may from time to time enter into certain financing or distribution
arrangements relating to a motion picture (each, a “Film Document”), subject to the prior written
approval of the First Lien Agent. To the extent that (i) the First Lien Agent deems it appropriate
to enter into any agreement with any party to any Film Document and (ii) as a result thereof, each
of the First Lien Agent and the Second Lien Agent and/or the Second Lien Creditors will be required
to enter into an intercreditor agreement, interparty agreement or similar agreement thereunder, the
Second Lien Agent (for itself and on behalf of each Second Lien Creditor) hereby agrees to enter
into any such agreement so approved by the First Lien Agent. To the extent that the First Lien
Agent grants any consent or waiver, takes any action or exercises any other rights (any of the
foregoing, a “First Lien Action”) under any such agreement or under any First Lien Document to
which the Second Lien Agent is also a party, the Second Lien Agent shall take such actions as may
be necessary to give effect to such First Lien Action and shall not exercise any such right or fail
to take any such action in a manner contrary to or preventing such First Lien Action.

     4.2 Amendments to Second Lien Documents. Until the First Lien Termination Date has
occurred, and notwithstanding anything to the contrary contained in the Second Lien Documents, the
Second Lien Creditors shall not, without the prior written consent of the First Lien Agent, agree
to any amendment, restatement, modification, supplement, substitution, renewal or replacement of or
to any or all of the Second Lien Documents that (a) would directly or indirectly result in an
increase in the interest rates in respect of the Second Lien Obligations (excluding the imposition
of a default rate of 4.0% per annum) by more than 3.0% per annum, (b) shorten the maturity or
weighted average life to maturity of the Second Lien Obligations or require that any payment on the
Second Lien Obligations be made earlier than the date originally scheduled for such payment or that
any commitment expire any earlier than the date originally scheduled therefor, (c) add or modify in
a manner adverse to any Obligor or any First Lien Creditor any covenant, agreement or event of
default under the Second Lien Documents or (d) increase the amount of the Second Lien Obligations,
other than as a result of the capitalization of accrued interest and expenses.

     4.3 Enforcement Actions by Second Lien Creditors; Prepayments.

          (a) The Second Lien Creditors shall give the First Lien Agent at least 10 Business Days’ written
notice prior to taking any Enforcement Action, which notice may be given during the pendency of any
Standstill Period.

          (b) Without the prior written consent of the First Lien Agent, no Second Lien Creditor will take,
demand or receive from any Obligor any prepayment of principal (whether optional, voluntary,
mandatory or otherwise or by redemption, defeasance or other payment or distribution) with respect
to any Second Lien Obligations.

16

 

     4.4 Cure Rights. The First Lien Agent shall have the right, but not the obligation, to cure
a Second Lien Payment Default at any time during the 180-day period provided for in clause (a) of
the definition of Standstill Period in Section 1 or thereafter with the prior written consent of the
Second Lien Agent. In the event that such Second Lien Payment Default shall be so cured, the rights
of the Second Lien Creditors in respect of such Second Lien Payment Default shall cease until the
occurrence of any other Second Lien Payment Default. In no event shall the First Lien Creditors, by
virtue of the payment of any such amounts, or performance of any obligation required to be paid or
performed by any Obligor, be deemed to have assumed any obligation of any Obligor to the Second
Lien Creditors or any other Person.

     4.5 Effect of Refinancing.

          (a) If the Payment in Full of the First Lien Obligations is being effected through a Refinancing;
provided that (i) the First Lien Agent gives a notice of such Refinancing to the Second Lien Agent
at least 5 Business Days prior to such Refinancing and (ii) the credit agreement and the other
documents evidencing such new First Lien Obligations (the “New First Lien Documents”) do not effect
an amendment, supplement or other modification of the terms of the First Lien Obligations in a
manner that is prohibited by
Section 4.1, then (A) such Payment in Full of First Lien Obligations shall be deemed not to
have occurred for all purposes of this Agreement, (B) the indebtedness under such Refinancing and
all other obligations under the credit documents evidencing such indebtedness (the “New First Lien
Obligations”) shall be treated as First Lien Obligations for all purposes of this Agreement, (C)
the New First Lien Documents shall be treated as the First Lien Documents and (D) the agent under
the New First Lien Documents (the “New First Lien Agent”) shall be deemed to be the First Lien
Agent for all purposes of this Agreement. Upon receipt of a notice of Refinancing under the
preceding sentence, which notice shall include the identity of the New First Lien Agent, the Second
Lien Agent shall promptly enter into such documents and agreements (including amendments or
supplements to this Agreement) as the New First Lien Agent may reasonably request in order to
provide to the New First Lien Agent the rights and powers set forth herein.

          (b) If the Payment in Full of the Second Lien Obligations is being effected through a Refinancing;
provided that (i) the Second Lien Agent gives a notice of such Refinancing to the First Lien Agent
at least 5 Business Days prior to such Refinancing and (ii) the credit agreement (or securities
purchase agreement) and the other documents evidencing such New Second Lien Obligations (the “New
Second Lien Documents”) do not effect an amendment, supplement or other modification of the terms
of the Second Lien Obligations in a manner that is prohibited by Section 4.2, then (A) such Payment
in Full of Second Lien Obligations shall be deemed not to have occurred for all purposes of this
Agreement, (B) the indebtedness under such Refinancing and all other obligations under the New
Second Lien Documents (the “New Second Lien Obligations”) shall be treated as Second Lien
Obligations for all purposes of this Agreement, (C) the New Second Lien Documents shall be treated
as the Second Lien Documents and (D) the collateral agent under the New Second Lien Documents (the
“New Second Lien Agent”) shall be deemed to be the Second Lien Agent for all purposes of this
Agreement. Upon receipt of a notice of Refinancing under the preceding sentence, which notice shall
include the identity of the New Second Lien Agent, the First Lien Agent shall promptly enter into
such documents and agreements (including amendments or supplements to this Agreement) as the New
Second Lien Agent may reasonably request in order to provide to the New Second Lien Agent the
rights and powers set forth herein.

          (c) By their acknowledgement hereto, Obligors agree to cause the agreement, document or instrument
pursuant to which any New First Lien Agent or any New Second Lien Agent is appointed to provide
that the New First Lien Agent or New Second Lien Agent, as applicable, agrees to be bound by the
terms of this Agreement.

17

 

Section 5. Second Lien Creditors Purchase Option.

     5.1 Purchase Notice. Upon the Second Lien Agent’s receipt of a notice from the First Lien
Agent (the “Agent’s Notice”) that the First Lien Agent has accelerated the First Lien Obligations,
the Second Lien Creditors shall have the option, but not the obligation, to purchase all, but not
less than all, of the First Lien Obligations owing to the First Lien Creditors from the First Lien
Creditors, and assume all, but not less than all, of the then existing funding commitments under
the First Lien Documents by giving a written notice
(the “Purchase Notice”) to the First Lien Agent no later than the 5th Business Day after receipt by
the Second Lien Agent of the Agent’s Notice. A Purchase Notice once delivered shall be irrevocable.

     5.2 Purchase Option Closing. On the date specified by the Second Lien Agent in the Purchase
Notice (which shall not be less than 3 Business Days nor more than 5 Business Days, after the
receipt by the First Lien Agent of the Purchase Notice; the closing date referred to in the
Purchase Notice is referred to herein as the “Purchase Option Closing Date”), the First Lien
Creditors shall sell to the Second Lien Creditors, and the Second Lien Creditors shall purchase
from the First Lien Creditors, all, but not less than all, of the First Lien Obligations, and the
First Lien Lenders shall assign to the purchasing Second Lien Lenders, and the purchasing Second
Lien Lenders shall assume from the First Lien Lenders all, but not less than all, of the then
existing funding commitments under the First Lien Documents.

     5.3 Purchase Price. Such purchase and sale shall be made by execution and delivery by the
applicable Secured Creditors of an Assignment Agreement in the form attached to the First Lien
Credit Agreement. Upon the date of such purchase and sale, the Second Lien Creditors shall (a) pay
to the First Lien Agent for the benefit of the First Lien Creditors as the purchase price therefor
the sum of the full amount of all the First Lien Obligations then outstanding and unpaid (including
principal, interest, fees, indemnities and expenses, including reasonable attorneys’ fees and legal
expenses), (b) furnish cash collateral to the First Lien Agent with respect to the outstanding
First Lien Letter of Credit Obligations in such amounts as are required under the First Lien Credit
Agreement and (c) agree to reimburse the First Lien Creditors for any loss, cost, damage or expense
(including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees,
costs or expenses related to any issued and outstanding First Lien Letter of Credit Obligations as
described above and any checks or other payments provisionally credited to the First Lien
Obligations, and/or as to which the First Lien Creditors have not yet received final payment. Such
purchase price and cash collateral shall be remitted by wire transfer of immediately available
funds to such bank account of the First Lien Agent in New York, New York, as the First Lien Agent
may designate in writing to the Second Lien Creditors for such purpose. Interest shall be
calculated to but excluding the Business Day on which such purchase and sale shall occur if the
amounts so paid by the Second Lien Creditors to the bank account designated by the First Lien Agent
are received in such bank account prior to 1:00 p.m., New York City time and interest shall be
calculated to and including such Business Day if the amounts so paid by the Second Lien Creditors
to the bank account designated by the First Lien Agent are received in such bank account later than
1:00 p.m., New York City time.

     5.4 Nature of Sale. Such purchase and sale shall be expressly made without representation
or warranty of any kind by the First Lien Creditors as to the First Lien Obligations or otherwise
and without recourse to the First Lien Creditors, except for representations and warranties as to
the following: (a) the amount of the First Lien Obligations being purchased (including as to the
principal of and accrued and unpaid interest on such First Lien Obligations, fees and expenses
thereof), (b) that the First Lien
Creditors own the First Lien Obligations free and clear of any Liens and (c) each First Lien
Creditor has the full right and power to assign its First Lien Obligations and such assignment has
been duly authorized by all necessary corporate action by such First Lien Creditor.

18

 

     5.5 Notice of Election to Purchase. As soon as practicable after receipt of the Agent’s
Notice, but in no event more than 5 Business Days after the Second Lien Agent’s receipt of the
Agent’s Notice, the Second Lien Creditors (if they elect to do so) shall send to the First Lien
Agent the Purchase Notice. The First Lien Creditors shall not complete any Enforcement Action
(other than the exercise of control over any Obligor’ s deposit or securities accounts) during the
period following the First Lien Agent’s receipt of the Purchase Notice and on or prior to the
Purchase Option Closing Date referred to therein.

Section 6. Bankruptcy Matters.

     6.1 Bankruptcy. This Agreement shall be applicable both before and after the filing of any
petition by or against any Obligor under the Bankruptcy Code or any other Insolvency Proceeding and
all converted or succeeding cases in respect thereof, and all references herein to any Obligor
shall be deemed to apply to the trustee for such Obligor and such Obligor as a
debtor-in-possession. The relative rights of the First Lien Creditors and the Second Lien Creditors
in respect of any Collateral or proceeds thereof shall continue after the filing of such petition
on the same basis as prior to the date of such filing, subject to any court order approving the
financing of, or use of cash collateral by, any Obligor. This Agreement shall constitute a
“subordination agreement” for the purposes of Section 510(a) of the Bankruptcy Code and shall be
enforceable in any Insolvency Proceeding in accordance with its terms.

     6.2 Post Petition Financing: Adequate Protection.

          (a) If any Obligor or Obligors shall become subject to Insolvency Proceedings and such Obligor or
Obligors as debtor(s)-in-possession (or a trustee appointed on behalf of such Obligor or Obligors)
shall move for either approval of financing (“DIP Financing”) to be provided by one or more of the
First Lien Creditors (or to be provided by any other person or group of persons with the consent of
the First Lien Agent) under Section 364 of the Bankruptcy Code or the use of cash collateral with
the consent of the First Lien Creditors under Section 363 of the Bankruptcy Code, then subject to
Section 6.2(b), the Second Lien Creditors agree as follows: (i) adequate notice to Second Lien
Creditors for such DIP Financing or use of cash collateral shall be deemed to have been given to
the Second Lien Creditors if the Second Lien Agent receives notice in advance of the hearing to
approve such DIP Financing or use of cash collateral on an interim basis and at least 5 Business
Days in advance of the hearing to approve such DIP Financing or use of cash collateral on a final
basis, (ii) such DIP Financing (and any First Lien Obligations which arose prior to the Insolvency
Proceeding) may be secured by Liens on all or a part of the assets of the Obligors which shall be
superior in priority to the Liens on the assets of the Obligors held by any other Person, (iii) the
Second Lien Creditors will not request or accept adequate protection or any other relief in
connection with the use of such cash
collateral or such DIP Financing except as set forth in
Section 6.2(b) below, (iv) the Second Lien
Creditors will subordinate (and will be deemed hereunder to have subordinated) the Second Priority
Liens (A) to the Liens securing such DIP Financing (the “DIP Liens”) on the same terms (but on a basis
junior to the Liens of the First Lien Creditors) as the Liens of the First Lien Creditors are
subordinated thereto (and such subordination will not alter in any manner the terms of this
Agreement), (B) to any “replacement Liens” granted to the First Lien Creditors as adequate
protection of their interests in the Collateral (the “Senior Adequate Protection Liens”) and (C) to
any “carve-out” agreed to by the First Lien Agent or the other First Lien Creditors and (v) subject
to Section 6.2(b) below, the Second Lien Creditors shall not contest or oppose in any manner any
adequate protection provided to the First Lien Creditors as adequate protection of their interests
in the Collateral, any DIP Financing or any cash collateral use and shall be deemed to have waived
any objections to such adequate protection, DIP Financing or cash collateral use, including,
without limitation, any objection alleging Obligors’ failure to provide “adequate protection” of
the interests of the Second Lien Creditors in the Collateral.

19

 

          (b) Adequate Protection. Notwithstanding the foregoing provisions in this Section 6.2, in
any Insolvency Proceeding, if the First Lien Creditors (or any subset thereof) are granted adequate
protection in the form of Senior Adequate Protection Liens, the Second Lien Creditors may seek (and
the First Lien Creditors may not oppose) adequate protection of their interests in the Collateral
in the form of (i) a replacement Lien on the additional collateral subject to the Senior Adequate
Protection Liens (the “Junior Adequate Protection Liens”), which Junior Adequate Protection Liens,
if granted, will be subordinate to all Liens securing the First Lien Obligations (including,
without limitation, the Senior Adequate Protection Liens and any “carve-out” agreed to by the First
Lien Agent or the other First Lien Creditors) and any Liens securing debtor-in-possession financing
(whether or not constituting DIP Financing) on the same basis as the other Liens securing the
Second Lien Obligations are so subordinated under this Agreement (provided that any failure of the
Second Lien Creditors to obtain such Junior Adequate Protection Liens shall not impair or otherwise
affect the agreements, undertakings and consents of the Second Lien Creditors pursuant to Section
6.2(a)) and (ii) super priority claims under Section 507(b) of the Bankruptcy Code junior in all
respects to the superpriority claims granted under Section
507(b) of the Bankruptcy Code to the First Lien Creditors on account of any of the First Lien
Obligations or granted under Section 364(c)(1) of the Bankruptcy Code with respect to any
debtor-in-possession financing (whether or not constituting DIP Financing) or use of cash
collateral; provided that the inability of the Second Lien Creditors to receive a Lien on actions
under Chapter 5 of the Bankruptcy Code or proceeds thereof shall not affect the agreements and
waivers set forth in this Section 6.2 and provided, further, that the Second Lien Agent shall have
irrevocably agreed, pursuant to Section 11 29(a)(9) of the Bankruptcy Code, on behalf of itself and
the Second Lien Creditors, in any stipulation and/or order granting such adequate protection, that
any such junior superpriority claims may be paid under any plan of reorganization in any
combination of cash, debt, equity or other property having a value on the effective date of such
plan equal to the allowed amount of such junior superpriority claims. Except as expressly set
forth above, the Second Lien Creditors may not seek post-petition interest and/or adequate
protection payments in any Insolvency Proceeding, and the First Lien Creditors may oppose any
payments proposed to be made by any Obligor to the Second Lien Creditors. Furthermore, in the event
that any Second Lien Creditor actually receives any post-petition interest and/or adequate
protection payments in any Insolvency Proceeding, the same shall be segregated and held in trust
and promptly paid over to the First Lien Agent, for the benefit of the First Lien Creditors, in the
same form as received, with any necessary endorsements, and each Second Lien Creditor hereby
authorizes the First Lien Agent to make any such endorsements as agent for the Second Lien Agent
(which authorization, being coupled with an interest, is irrevocable) to be held and/or applied by
First Lien Agent in accordance with the terms of the First Lien Documents until all First Lien
Obligations are Paid In Full before any of the same shall be made to one or more of the Second Lien
Creditors, and each Second Lien Creditor irrevocably authorizes, empowers and directs any debtor,
debtor in possession, receiver, trustee, liquidator, custodian, conservator or other Person having
authority, to pay or otherwise deliver all such payments to the First Lien
 Agent.

     6.3 Sale of Collateral; Waivers. The Second Lien Creditors hereby consent to a Disposition
of any Collateral securing the First Lien Obligations (or any portion thereof) free and clear of
Liens or other claims under Section 363 of the Bankruptcy Code or any other provision of the
Bankruptcy Code, if the First Lien Creditors have consented to the Disposition of such assets, as
long as all proceeds of such Disposition received by the First Lien Creditors on account of the
First Lien Obligations will be applied to the First Lien Obligations to permanently reduce the
Maximum First Lien Principal Amount; provided that the Second Lien Agent, on behalf of itself and
the other Second Lien Creditors, may raise any objections to any such Disposition of such
Collateral that could be raised by any creditor of the Obligors whose claims were not secured by
any Liens on such Collateral, provided such objections are not inconsistent with any other term or
provision of this Agreement and are not based on the status of the Second Lien Agent or the Second
Lien Creditors as secured creditors (without limiting the foregoing, neither the Second Lien Agent
nor the Second Lien Creditors may raise any objections based on rights

20

 

afforded by Sections 363(e) and (f) of the Bankruptcy Code to secured creditors (or by any
comparable provision of any Bankruptcy Law)) with respect to the Liens granted to the Second Lien
Agent. The Second Lien Agent and the Second Lien Creditors waive any claim they may now or
hereafter have arising out of the First Lien Creditors’ election in any proceeding instituted under
Chapter 11 of the Bankruptcy Code of the application of Section 1111 (b)(2) of the Bankruptcy Code.
The Second Lien Agent and the Second Lien Creditors agree not to initiate or prosecute or join with
any other Person to initiate or prosecute any claim, action or other proceeding (i) challenging the
enforceability of the First Lien Creditors’ claims as fully secured claims with respect to all or
part of the First Lien Obligations or for allowance of any First Lien Obligations (including those
consisting of post-petition interest, fees or expenses) or opposing any action by the First Lien
Agent or the First Lien Creditors to enforce their rights or remedies arising under the First Lien
Documents in a manner which is not prohibited by the terms of this
Agreement, (ii) challenging the enforceability, validity, priority or perfected status of any Liens
on assets securing the First Lien Obligations under the First Lien Documents, (iii) asserting any
claims which the Obligors may hold with respect to the First Lien Creditors, (iv) seeking to lift
the automatic stay to the extent that such action is opposed by the First Lien Agent or (v)
opposing a motion by the First Lien Agent to lift the automatic stay. The First Lien Creditors
agree not to initiate or prosecute or join with any person to initiate or prosecute any claim,
action or other proceeding challenging the enforceability, validity, priority or perfected status
of any Liens on assets securing the Second Lien Obligations under the Second Lien Documents.

     6.4 Invalidated Payments. To the extent that the First Lien Creditors receive payments on
the First Lien Obligations or proceeds of Collateral for application to the First Lien Obligations
which are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any Bankruptcy Law, common
law, equitable cause or otherwise (and whether as a result of any demand, settlement, litigation or
otherwise) (each a “First Lien Avoidance”), then to the extent of such payment or proceeds
received, such Obligations, or part thereof, intended to be satisfied by such payment or proceeds
shall be revived and continue in full force and effect as if such payments or proceeds had not been
received by the First Lien Creditors, and this Agreement, if theretofore terminated, shall be
reinstated in full force and effect as of the date of such First Lien Avoidance, and such prior
termination shall not diminish, release, discharge, impair or otherwise affect the Lien priorities
and the relative rights and obligations of the First Lien Creditors and the Second Lien Creditors
provided for herein with respect to any event occurring on or after the date of such First Lien
Avoidance. The Second Lien Creditors agree that none of them shall be entitled to benefit from any
First Lien Avoidance, whether by preference or otherwise, it being understood and agreed that the
benefit of such First Lien Avoidance otherwise allocable to them shall instead be allocated and
turned over for application in accordance with the priorities set forth in this Agreement.

     6.5 Payments. In the event of any Insolvency Proceeding involving one or more Obligors, all
proceeds of Collateral (including, without limitation, any Distribution which would otherwise, but
for the terms hereof, be payable or deliverable in respect of the Second Lien Secured Claim), or
any other payment or Distribution shall be paid or delivered directly to First Lien Agent (to be
held and/or applied by First Lien Agent in accordance with the terms of the First Lien Documents)
until all First Lien Obligations are Paid In Full before any of the same shall be made to one or
more of the Second Lien Creditors on account of any Second Lien Secured Claim, and each Second Lien
Creditor irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver,
trustee, liquidator, custodian, conservator or other Person having authority, to pay or otherwise
deliver all such Distributions in respect of any Second Lien Secured Claim to the First Lien Agent;
provided that the foregoing provision shall not apply to Distributions made in respect of the
Second Lien Secured Claim pursuant to a plan of reorganization under the Bankruptcy Code with
respect to such Obligors which has received the affirmative vote of all classes composed of the
First Lien Creditors’ claims and which has been
confirmed pursuant to a Final Order. Each Second Lien Creditor also irrevocably authorizes and
empowers the First

21

 

Lien Agent, in the name of each Second Lien Creditor, to demand, sue for, collect and receive any
and all such Distributions in respect of any Second Lien Secured Claim to which the First Lien
Creditors are entitled hereunder. In the event of any Distribution received by the Second Lien
Creditors in respect of any Second Lien Deficiency, the Second Lien Creditors shall be entitled to
retain such Distribution to the extent the same have been paid pursuant to a plan of reorganization
which is confirmed pursuant to a Final Order regardless of whether such plan of reorganization has
received the affirmative vote of all classes composed of the First Lien Creditors’ claims.

     6.6 Separate Grants of Security and Separate Classification. Each Second Lien Creditor
acknowledges and agrees that (a) the grants of Liens pursuant to the First Lien Documents and the
Second Lien Documents constitute two separate and distinct grants of Liens and (b) because of their
differing rights in the Collateral, the Second Lien Secured Claims are fundamentally different from
the First Lien Secured Claims and must be separately classified in any plan of reorganization
proposed or adopted in an Insolvency Proceeding. The Second Lien Creditors shall not seek in any
Insolvency Proceeding to be treated as part of the same class of creditors as the First Lien
Creditors and shall not oppose any pleading or motion by the First Lien Creditors for the First
Lien Creditors and the Second Lien Creditors to be treated as separate classes of creditors.
Notwithstanding the foregoing, if it is held that the Secured Claims of the First Lien Creditors
and the Second Lien Creditors in respect of the Collateral constitute only one secured claim
(rather than separate classes of senior and junior secured claims), then the Second Lien Creditors
hereby acknowledge and agree that all distributions shall be made as if there were separate classes
of senior and junior secured claims against the Obligors in respect of the Collateral, with the
effect being that, to the extent that the aggregate value of the Collateral exceeds the amount of
the First Lien Obligations, the First Lien Creditors shall be entitled to receive, in addition to
amounts distributed to them in respect of principal, pre-petition interest and other claims, all
amounts owing in respect of post- petition interest, and fees, costs and charges incurred
subsequent to the commencement of the applicable Insolvency Proceeding before any distribution is
made in respect of any of the claims held by the Second Lien Creditors. The Second Lien Creditors
hereby acknowledge and agree to turn over to the First Lien Creditors amounts otherwise received or
receivable by them to the extent necessary to effectuate the intent of the preceding sentence, even
if such turnover has the effect of reducing the claim or recovery of the Second Lien Creditors.

     6.7 Rights as Unsecured Lenders. In any Insolvency Proceeding, to the extent not prohibited
by this Agreement, the Second Lien Creditors may take any action, file any pleading, appear in any
proceeding and exercise rights and remedies whether as unsecured lenders or otherwise. In any
Insolvency Proceeding, to the extent not prohibited by this Agreement, the First Lien Creditors may
take any action, file any pleading, appear in any proceeding and exercise rights and remedies
whether as unsecured lenders or otherwise.

Section 7.
Miscellaneous.

     7.1
Termination. Subject to Section 5.5, this Agreement shall terminate and be of no
further force and effect upon the first to occur of the Payment in Full of (a) the First Lien
Obligations or (b) the Second Lien Obligations. If the First Lien Obligations have been Paid in
Full or are being Paid in Full in a manner not constituting a Refinancing, the First Lien Agent
agrees to designate the Second Lien Agent as the ‘collection agent’ under any then currently
effective ‘notices of assignment’ or similar instruments that were executed and delivered pursuant
to the terms of the First Lien Documents.

     7.2
Successors and Assigns;  No Third Party Beneficiaries.

          (a) This Agreement shall be binding upon each Secured Creditor and its respective
successors and assigns and shall inure to the benefit of each Secured Creditor and its respective

22

 

successors, participants and assigns. No other Person shall have or be entitled to assert rights or
benefits hereunder.

          (b) Each Secured Creditor reserves the right to grant participations in, or otherwise sell, assign,
transfer or negotiate all or any part of, or any interest in, their respective Obligations;
provided that no Secured Creditor shall be obligated to give any notices to or otherwise in any
manner deal directly with any participant in the Obligations and no participant shall be entitled
to any rights or benefits under this Agreement, except through the Secured Creditor with which it
is a participant.

          (c) In connection with any participation or other transfer or assignment, a Secured Creditor (i)
may, subject to its respective Documents, disclose to such assignee, participant or other
transferee or assignee all documents and information which such Secured Creditor now or hereafter
may have relating to any Obligor or the Collateral and (ii) shall disclose to such participant or
other transferee or assignee the existence and terms and conditions of this Agreement.

     7.3 Notices. All notices and other communications provided for hereunder shall be in
writing and shall be mailed, sent by overnight courier, telecopied or delivered, as follows:

          (a) if to First Lien Agent, to it at the following address:

General Electric Capital Corporation, as First Lien Agent

2325 Lakeview Parkway, Suite 700

Alpharetta, Georgia 30004

Attention: Greg Watts

Telephone: (678) 624-7981

Telecopy: (678) 624-7903

          with copies to:

General Electric Capital Corporation, as First Lien Agent

2325 Lakeview Parkway, Suite 700

Alpharetta, Georgia 30004

Attention: MCE Counsel

Telephone: (678) 624-7947

Telecopy: (678) 624-7902

Gibson, Dunn & Crutcher LLP

2029 Century Park East

Los Angeles, California 90067-3026

Attention: Lawrence J. Ulman, Esq.

Telephone: (310) 552-8500

Telecopier: (310) 551-8741

          (b) if to Second Lien Agent, to it at the following address:

23

 

General Electric Capital Corporation, as First Lien Agent

2325 Lakeview Parkway, Suite 700

Alpharetta, Georgia 30004

Attention: Greg Watts

Telephone: (678) 624-7981

Telecopy: (678) 624-7903

          with copies to:

General Electric Capital Corporation, as First Lien Agent

2325 Lakeview Parkway, Suite 700

Aipharetta, Georgia 30004

Attention: MCE Counsel

Telephone: (678) 624-7947

Telecopy: (678) 624-7902

Gibson, Dunn & Crutcher LLP

2029 Century Park East

Los Angeles, California 90067-3026

Attention: Lawrence J. Ulman, Esq.

Telephone: (310) 552-8500

Telecopier: (310) 5518741

or, as to each party, at such other address as shall be designated by such party in a written
notice to the other parties complying as to delivery with the terms of this Section 7.3. All such
notices and other communications shall be effective (i) if sent by registered mail, return receipt
requested, when received or 3 Business Days after mailing, whichever first occurs, (ii) if
telecopied, when transmitted and a confirmation is received, provided the same is on a Business Day
and, if not, on the next Business Day or (iii) if delivered by messenger or overnight courier, upon
delivery, provided the same is on a Business Day and, if not, on the next Business Day.

     7.4 Counterparts. This Agreement may be executed by the parties hereto in several
counterparts, and each such counterpart shall be deemed to be an original and all of which shall
constitute together but one and the same agreement. 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.

     7.5 GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE. THIS
AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED iN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH OF THE PARTIES HERETO
HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK SHALL
HAVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES AMONG THE PARTIES HERETO PERTAINING TO THIS AGREEMENT OR TO ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT; PROVIDED THAT THE PARTIES HERETO ACKNOWLEDGE
THAT ANY

24

 

APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK.
EACH OF THE PARTIES HERETO EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH OF THE PARTIES HERETO HEREBY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS.

     7.6
MUTUAL WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE PARTIES ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT OR THE TRANSACTIONS RELATED THERETO.

     7.7 Amendments. No amendment or waiver of any provision of this Agreement, and no consent
to any departure by any Person from the terms hereof, shall in any event be effective unless it is
in writing and signed by the Second Lien Agent, with the consent of the Requisite Second Lien
Creditors and the First Lien Agent, with the consent of the “Required Lenders” (as defined in the
First Lien Credit Agreement). In no event shall the consent of any Obligor be required in
connection with any amendment or other modification of this Agreement.

     7.8 No Waiver. No failure or delay on the part of any Secured Creditor in exercising any
power or right under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further exercise thereof or the
exercise of any other power or right.

     7.9 Severability. Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of this Agreement or affecting
the validity or enforceability of such provisions in any other jurisdiction.

     7.10 Further Assurances. Each party hereto agrees to cooperate fully with each other party
hereto to effectuate the intent and provisions of this Agreement and, from time to time, to execute
and deliver any and all other agreements, documents or instruments, and to take such other actions,
as may be reasonably necessary or desirable to effectuate the intent and provisions of this
Agreement.

     7.11 Headings. The section headings contained in this Agreement are and shall be without
meaning or content whatsoever and are not part of this Agreement.

     7.12 Lien Priority Provisions. This Agreement and the rights and benefits hereunder shall
inure solely to the benefit of the First Lien Agent, the First Lien Creditors, the Second Lien
Agent, and the Second Lien Creditors and their respective successors and permitted assigns and no
other Person (including the Obligors or any trustee, receiver, debtor in possession or bankruptcy
estate in a bankruptcy or like proceeding) shall have or be entitled to assert rights or benefits
hereunder. Nothing contained in this Agreement is intended to or shall impair the obligation of any
Obligor to pay the Obligations as and when the same shall become due and payable in accordance with
their respective terms, or to affect the relative rights of the lenders of any Obligor, other than
the First Lien Agent, the First Lien Creditors, the Second Lien Agent, and the Second Lien
Creditors as between themselves.

     7.13 Credit Analysis. The Secured Creditors shall each be responsible for keeping
themselves informed of (a) the financial condition of the Obligors and all other all endorsers,
obligors and/or

25

 

guarantors of the Obligations and (b) all other circumstances bearing upon the risk of nonpayment
of the Obligations. No Secured Creditor shall have any duty to advise any
other Secured Creditor of information known to it regarding such condition or any such other
circumstances. No Secured Creditor assumes any liability to any other Secured Creditor or to any
other Person with respect to: (i) the financial or other condition of Obligors under any
instruments of guarantee with respect to the Obligations, (ii) the enforceability, validity, value
or collectibility of the Obligations, any Collateral therefor or any guarantee or security which
may have been granted in connection with any of the Obligations or (iii) any Obligor’s title or
right to transfer any Collateral or security.

     7.14 Waiver of Claims. To the maximum extent permitted by law, each party hereto waives any
claim it might have against any Secured Creditor with respect to, or arising out of, any action or
failure to act or any error of judgment or negligence, mistake or oversight whatsoever on the part
of any other party hereto or their respective directors, officers, employees or agents with respect
to any exercise of rights or remedies under the Documents or any transaction relating to the
Collateral in accordance with this Agreement. None of the Secured Creditors, nor any of their
respective directors, officers, employees or agents shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or, except as specifically
provided herein, shall be under any obligation to Dispose of any Collateral upon the request of any
Obligor or any Secured Creditor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof.

     7.15 Conflicts. In the event of any conflict between the provisions of this Agreement and
the provisions of the Documents, the provisions of this Agreement shall govern.

     7.16
Specific Performance. Each of First Lien Agent and Second Lien Agent may demand specific
performance of this Agreement and, on behalf of itself and the respective other Secured Creditors,
hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other
defense that might be asserted to bar the remedy of specific performance in any action which may be
brought by the respective Secured Creditors.

     7.17
Provisions Solely to Define Relative Rights. The provisions of this Agreement are and are
intended solely for the purpose of defining the relative rights of the Secured Creditors. None of
the Obligors or any other creditor thereof shall have any rights hereunder, and none of the
Obligors may rely on the terms hereof. Nothing in this Agreement is intended to or shall impair the
obligations of Obligors, which are absolute and unconditional, to pay the First Lien Obligations
and the Second Lien Obligations as and when the same shall become due and payable in accordance
with their terms

     7.18 Subrogation. The Second Lien Agent and the other Second Lien Creditors hereby agree
that until the First Lien Termination Date has occurred they will not assert any rights of
subrogation it or they may acquire as a result of any payment
hereunder; provided that as between
the Obligors, on the one hand, and the Second Lien Creditors, on the other hand, any such payment
that is paid over to the First Lien Agent pursuant to this Agreement shall be deemed not to reduce
any of the Second Lien Obligation.

     7.19 Entire Agreement. This Agreement and the Documents embody the entire agreement of the
Obligors, the First Lien Agent, the First Lien Creditors, the Second Lien Agent and the Second Lien
Creditors with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings relating to the subject matter hereof and thereof and any draft agreements,
negotiations and/or discussions involving any Obligor and any of the First Lien Agent, the First
Lien Creditors, the Second Lien Agent and the Second Lien Creditors relating to the subject matter
hereof.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

26

 

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

	 	 	 	 	 
	 	FIRST LIEN AGENT:

GENERAL ELECTRIC CAPITAL CORPORATION, as

First Lien Agent

 	 
	 	By:  	 	 
	 	 	Name:  	Greg Watts 	 
	 	 	Its: Duly Authorized Signatory 	 
	 
	 	SECOND LIEN AGENT:

GENERAL ELECTRIC CAPITAL CORPORATION, as

Second Lien Agent

 	 
	 	By:  	 	 
	 	 	Name:  	Greg Watts 	 
	 	 	Its: Duly Authorized Signatory 	 

 

 

	 	 	 	 	 

          The undersigned hereby acknowledges and agrees to the foregoing terms and provisions.

	 	 	 	 	 
	 	BORROWER:

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 Officer 	 
	 
	 	OBLIGOR:

THE FILM DEPARTMENT HOLDINGS LLC

 	 
	 	By:  	 	 
	 	 	Mark Gill, Chief Executive Officer 	 
	 	 	 
	 	By:  	 	 
	 	 	Neil Sacker, President & Chief Operating Officer 	 
	 	 	 	 

 

 

	 	 	 	 	 

EXHIBIT G

FORM
OF NOTICE OF ASSIGNMENT AND DISTRIBUTOR’S ACCEPTANCE

 

 

NOTICE OF ASSIGNMENT AND DISTRIBUTOR’S ACCEPTANCE

[FOR INTERNATIONAL DISTRIBUTION AGREEMENTS]

     This Notice of Assignment and Distributor’s Acceptance (this “Agreement”) is made as
of
                    ,
20 ___, among The Film Department LLC, a Delaware limited liability company
(“Licensor”);                      (“Distributor”);
                    
(“Completion Guarantor”); and General Electric Capital
Corporation, the initial designee for certain of the below referenced Creditors (and, together with
any other person designated as such in accordance with the terms hereof, the “Collection Agent”).

     Reference is made to the following:

     A. The Licensor and the Distributor have previously entered into that certain agreement
(“Distribution Agreement”) dated as of
                    ,
20___, with respect to the feature-length motion
picture presently entitled“                                        ”(as such motion picture is now or may hereafter become known, the
“Picture”).

     B. The Licensor has entered into certain secured financing arrangements dated as of June 27,
2007 (collectively, and as the same may be amended, restated, supplemented or otherwise modified
from time to time, the “Financing Agreements”), with various providers of financial
accommodations (collectively, “Creditors”) pursuant to which, among other things, such
Creditors have agreed to provide loans and other financial accommodations (collectively,
“Loans”) to fund certain production costs of the Picture, and Completion Guarantor has
entered into a completion guarantee agreement for the benefit of the Creditors. In order to secure
its obligations to the Creditors under the Financing Agreements and to the Completion Guarantor,
the Licensor has assigned (I) to or for the benefit of the Collection Agent and the Creditors and
(II) to the Completion Guarantor, subject to the rights of the Creditors, all amounts
(“Assigned Payments”) payable by the Distributor pursuant to the Distribution Agreement,
including, without limitation, the Minimum Guarantee (“Minimum Guarantee”) payable pursuant
thereto equal to                     U.S. Dollars ($ ), as more fully described on Schedule “1”
attached hereto and upon satisfaction only of the conditions precedent set forth on Schedule “1”
with respect to each installment thereof (“Conditions Precedent”).

     C. All references to the Distribution Agreement shall be deemed to mean the Distribution
Agreement, as amended hereby.

     Accordingly, it is agreed as follows:

     1. Distribution Agreement. The Licensor and the Distributor represent, each for
itself, that as of the date of execution hereof, no default exists under the Distribution Agreement
and the Distribution Agreement is in full force and effect.

     2. Notice of Assignment. The Licensor hereby notifies the Distributor:

     a. Of the assignment by the Licensor of the Assigned Payments to or for the benefit of
the Collection Agent and the Creditors;

     b. That neither the Licensor nor the Distributor has any authority whatsoever, without
the prior written consent of the Collection Agent and the Completion Guarantor, (i) to
waive any

1

 

provisions of or rights under the Distribution Agreement or to modify, amend or supplement
the Distribution Agreement in any manner affecting the amount or dates of payment of or
otherwise affecting the Assigned Payments, (ii) to terminate the Distribution Agreement,
(iii) to amend, modify or supplement the Distribution Agreement in any manner affecting the
method of delivery or (iv) to enter into the more formal long-form agreement if one is
contemplated by the Distribution Agreement;

     c. That, notwithstanding anything to the contrary set forth in the Distribution
Agreement, payment of the Assigned Payments (to the extent not secured by a letter of
credit in form and substance acceptable to the Collection Agent and issued to the
Collection Agent as beneficiary) is to be made directly to the Collection Agent in United
States Dollars by wire transfer to:

	 	 	 	 	 

	Account Name:

	 	The Film Department LLC	 	 
	Account No.:
	 	 	 	 
	Bank:
	 	 	 	 
	ABA No.:
	 	 	 	 
	Swift Code:
	 	 	 	 
	 

	 	 

	 	 

(or to such other account at such other address as the Collection Agent may designate in
writing to the Distributor) until such time as the Distributor receives written notice from
the Collection Agent (the “Agent Notice”) that all sums owing under the Financing
Agreements have been indefeasibly paid in full and the obligations of the Creditors to make
loans thereunder have been terminated, and thereafter to pay the Assigned Payments to the
Completion Guarantor in accordance with the Completion Guarantor’s instructions if the
Distributor receives a notice from the Completion Guarantor (the “Completion Guarantor
Notice”) stating that completion sums are owing to the Completion Guarantor;

     d. That the Distributor afford each of the Collection Agent and the Completion
Guarantor and their respective representatives (in lieu of the Licensor) all rights if any
thereof so elects to exercise and/or enforce all of the Licensor’ s rights under the
Distribution Agreement or examination and audit of your books and records pertaining to the
Picture granted to the Licensor under the Distribution Agreement;

     e. That, notwithstanding anything to the contrary in the Distribution Agreement, the
Licensor authorizes, directs and instructs the Distributor to transfer and deposit any
frozen or unremittable foreign receipts of the Picture to or for the Collection Agent’s (or
Completion Guarantor’s, as applicable) account in accordance with the Collection Agent’s
(or Completion Guarantor’s, as applicable) written instructions to the Distributor to the
extent permitted under applicable law;

     f. That the Licensor instructs the Distributor to furnish to the Collection Agent and
the Completion Guarantor duplicates of all default notices from the Distributor to the
Licensor under the Distribution Agreement as and when given under the Distribution
Agreement; and

     g. That the appointment, authority, instruction and direction herein contained are
coupled with an interest and are in all respects irrevocable and
without right of rescission or modification without the prior written consent of the
Collection Agent (or the Completion Guarantor, as applicable).

     3. Distributor’s Acceptance. Notwithstanding anything to the contrary set forth in the
Distribution Agreement, for the benefit of the Collection Agent and the Completion Guarantor only,
and

2

 

without waiving any rights or remedies the Distributor may have against the Licensor until
such time as the Distributor receives the Agent Notice, and, if the Distributor has received the
Completion Guarantor Notice, until the Distributor receives written notice from the Completion
Guarantor that no further sums are owed to the Completion Guarantor
(the “Completion Guarantor
Termination Notice”), the Distributor hereby acknowledges and agrees as follows:

     a. To honor and fully perform in accordance with the authority and directions
contained in paragraph 2 hereof and the terms of Schedule “1” hereto;

     b. That payment of the Minimum Guarantee to the Collection Agent in full in accordance
with the terms of Schedule “1” hereto is a condition precedent to the grant of rights to
the Distributor under the Distribution Agreement, and that any rights in the Picture
granted to the Distributor under the Distribution Agreement shall only vest upon the full
payment to the Collection Agent of the Minimum Guarantee in accordance with the terms of
Schedule “1” hereto. [Prior to the payment of the Minimum Guarantee, the Distributor shall
be entitled to engage in all customary prerelease activities in connection with the Picture
so long as (i) such activities do not breach the Distribution Agreement and/or this
Agreement and (ii) the Distributor is not in breach of this Agreement.] The Distributor
further agrees that any of its rights, liens or entitlements, if any, under the
Distribution Agreement (collectively, “Distributor Rights”) shall be subject and
subordinate to the liens, mortgages, charges and security interests of(A) the Collection
Agent and the Creditors under the Financing Agreements and (B) the Completion Guarantor
therein, which shall be senior to and have priority over any such Distributor Rights;
provided, that, solely as among the Collection Agent, the Completion Guarantor and
the Distributor, and not for the benefit of the Licensor or any third party, the Collection
Agent and the Completion Guarantor will not exercise their respective security interests or
other rights in the Distributor Rights in any manner that would materially and adversely
prejudice, disturb, infringe upon, interfere with, prevent or impede the full, complete,
free and unencumbered purchase, enjoyment, exploitation and exercise by the Distributor of
the Distributor Rights provided that the Distributor has paid to the Collection Agent (or,
if after the Distributor’s receipt of the Agent Notice, the Distributor receives the
Completion Guarantor Notice, to the Completion Guarantor) the Minimum Guarantee in full as
and when due under this Agreement, including, without limitation, as set forth in paragraph
4 hereof[, and the Distributor is not otherwise in breach of its
other obligations under] the
Distribution Agreement]. [In addition, after Distributor has paid the Minimum Guarantee to
the Collection Agent, the security interests granted by Licensor to or for the benefit of
the Collection Agent and the Creditors in the Distributor Rights shall be deemed
automatically terminated; provided, however, that notwithstanding such
automatic termination of such security interests in the Distributor Rights as set forth
above, until all sums owing under the Financing Agreements have been indefeasibly paid in
full and the obligations of the Creditors to make loans thereunder have been terminated,
the security interests granted by Licensor to or for the benefit of the Collection Agent
and the Creditors shall continue in the Assigned Payments and in all of the Licensor’s
rights under the Distribution Agreement, including,
without limitation, any reversion rights that the Licensor may have under the
Distribution Agreement, to the extent securing any such obligations, and enjoy priority
over any interest therein in favor of the Distributor.]

     c. That all conditions precedent to the effectiveness of, and the Distributor’s
obligations under, the Distribution Agreement and this Agreement have been satisfied or
waived and the Distributor may not refuse or fail to pay the Minimum Guarantee except in
the event that the Conditions Precedent have not been satisfied, and that no individual(s),
elements or dates including, without limitation, cast members or crew members (including
the director), or the title of the Picture, or the conformity of the Picture to any version
of the screenplay of the Picture, or any other Picture

3

 

element, or the receipt of credit by any person or entity, or the rating of the Picture, or
a theatrical release or P&A expenditure, or release date, or delivery date, or
chain-of-title, or other picture specification is essential for purposes of effectuating
delivery of the Picture, and that the Distributor may not refuse to accept delivery of the
Picture should any of the foregoing be replaced, revised, amended or not met for any reason
whatsoever, and that the Distributor hereby waives any approval right that the Distributor
may have, including, without limitation, any approval rights with respect to lead actors,
the director, the title, the chain of title, the budget and/or the script for the Picture
[MODIFY IF ANY ESSENTIAL ELEMENTS];

     d. That the Distributor may discharge its obligation to pay the Assigned Payments only
by making payment thereof directly to the Collection Agent or the Completion Guarantor, as
applicable, in accordance with the terms hereof and that the Distributor may not discharge
that obligation by paying such Assigned Payments to the Licensor or any other person and
once any Assigned Payments have been paid to the Collection Agent or the Completion
Guarantor, as applicable, the same shall not be subject to refund or return to the
Distributor by the Collection Agent or the Completion Guarantor, as applicable, for any
reason whatsoever. If the Distributor pays any of the Assigned Payments to anyone other
than the Collection Agent or the Completion Guarantor, as applicable, despite the terms of
this Agreement, then the Distributor will be liable to the Collection Agent or the
Completion Guarantor, as applicable, for payment of those amounts even if it means that the
Distributor may be liable for double payment of such sums;

     e. That the Distributor hereby waives all rights of offset, cross-collateralization
and counterclaim, all rights to set up reserves, all rights to make deductions from the
Minimum Guarantee and, provided that Notification of Delivery (as such term is defined in
Schedule 1 hereto) is delivered to the Distributor in accordance with the terms of Schedule
“1” hereto, all defenses that it may now or hereafter have to the timely payment of the
Minimum Guarantee (including, without limitation, any defenses arising out of the
censorship of the Picture);

     f. That the Collection Agent and the Creditors and the Completion Guarantor have taken
an assignment only of the Assigned Payments, and that none of the Collection Agent, the
Creditors or the Completion Guarantor have assumed any obligations or liabilities of the
Licensor under the Distribution Agreement and the Distributor shall look solely to the
Licensor for the performance and discharge of such obligations and liabilities and that
there are no other agreements, other than the Distribution Agreement, between the
Distributor and the Licensor concerning or mentioning the Distributor’s right to distribute
or otherwise exploit the Picture, including, without limitation, all so- called “side
agreements” and the Distributor has not relied on any promises, statements, representations
or other information of any party as an inducement to enter into the Distribution Agreement
or this Agreement other than any of the representations, statements and information
contained in the Distribution Agreement or this Agreement;

     g. (i) None of the Collection Agent, the Creditors or the Completion Guarantor have
made or make any representations or warranties, express or implied, with respect to the
Picture, including the budget and actual costs of the Picture or any other matter, (ii)
none of the Collection Agent, the Creditors or the Completion Guarantor have any duty to
disclose any information to the Distributor concerning the Picture and (iii) the
Distributor shall hold the Collection Agent, each Creditor and the Completion Guarantor
harmless from and against any liability or damage that may be incurred or sustained by the
Distributor as a result of any fact or matter concerning the Picture, being other than as
represented by any other person;

4

 

     h. That in the event that the Distributor fails to make payment of the Minimum
Guarantee in accordance with the terms hereof, such failure shall constitute a default
under the Distribution Agreement and this Agreement if such default is not cured within
five (5) business days [MAY NEGOTIATE UP TO 20 BUSINESS DAYS] after written notice of such
default and all rights of the Distributor under the Distribution Agreement and this
Agreement shall automatically terminate and revert to the Licensor (but the Distributor
shall still be obligated to pay to the Collection Agent the Minimum Guarantee);

     i. That notwithstanding anything to the contrary contained herein, if the Distributor
or any of its sub-distributors releases (or authorizes the release of) the Picture in any
medium, then the Conditions Precedent, including without limitation, Notification of
Delivery shall be conclusively deemed to have been effected and the Distributor shall make
immediate payment of the Minimum Guarantee in accordance with the instructions and
directions set forth herein;

     j. That, notwithstanding anything to the contrary set forth in the Distribution
Agreement, until the Creditors have been repaid the Loans in full, and in the event that
the Distributor receives a Completion Guarantor Notice, until the Distributor receives a
Completion Guarantor Termination Notice, the Distributor shall not assign, transfer or
sublicense any of the rights granted under the Distribution Agreement or hereunder;

     k. That the Distributor’s obligation to pay the Assigned Payments as set forth herein
is absolute and conditioned only upon satisfaction of the Conditions Precedent; and

     1. That: (i) it has no knowledge of any assertion of any prior claims to the Assigned
Payments and agrees to notify the Collection Agent and the Completion Guarantor of (x) any
conflicting notice received by it, and (y) any claim by any other party that such claimant
is entitled to receive any portion of the Assigned Payments, and agrees to pay the Assigned
Payments directly to the Collection Agent or the Completion Guarantor, as applicable,
notwithstanding any such conflicting notice; (ii) it has all necessary power and has taken
all action necessary to enter into this Agreement and, upon its execution by the
Distributor, this Agreement constitutes a valid, binding and enforceable obligation of the
Distributor; (iii) no consent, waiver or approval of any third party is necessary for the
Distributor to enter into and perform this Agreement or the consummation of the
transactions contemplated hereby; and (iv) no Assigned Payments have been previously paid
to the Licensor or any other person [MODIFY IF SECURITY DEPOSIT HAS BEEN PAID].

     4. Dispute
Resolution.

     a. Notwithstanding anything to the contrary provided in the Distribution Agreement,
each of the parties hereto agrees that any dispute amongst the parties hereto regarding the
Picture or any dispute arising out of or in connection with the Distribution Agreement or
this Agreement or any related agreements, including, without limitation, any disputes
relating to delivery of the Picture, or the Distributor’s obligation to make payment to the
Collection Agent of the Assigned Payments or a disagreement about the meaning,
interpretation, application, performance, breach, termination, enforceability or validity
of this Agreement,
and whether based on statute, tort, contract, common law or otherwise, shall be
subject to and resolved by mandatory binding arbitration under the Rules of the
International Film and Television Alliance (“IFTA”) in effect as of the date the request
for arbitration is filed (the “Rules”) (or, in the
event IFTA is not in the future
in the business of conducting such arbitrations, the arbitration rules of any successor
international film marketing association based in Los

5

 

Angeles that provides arbitration procedures, or, if none, or, if IFTA refuses to hear such
dispute, the rules of the American Arbitration Association then in effect).

     b. Each of the parties hereto agrees that any party may initiate such an arbitration pursuant to
the Rules provided, however, if the issue of whether a Notification of Delivery has
been given is the subject of dispute, then prior to the commencement of an arbitration as set forth
in subparagraph c. below, the Completion Guarantor shall first have a 30 day period (commencing on
the date on which the Completion Guarantor is first notified in writing of that dispute) within
which to cure any alleged defect relating to Notification of Delivery. If the Distributor has not,
within five (5) business days after the expiration of such thirty (30) day period, notified the
other parties hereto in writing that the alleged Notification of Delivery defect remains uncured,
then Notification of Delivery shall be deemed to have been effected for all purposes hereof. The
arbitration will be held in Beverly Hills or Los Angeles, unless an alternate forum is chosen
pursuant to the Rules (such situs being herein referred to as the
“Forum”). The arbitration
proceeding shall be conducted in the English language. The Licensor, the Distributor, the
Completion Guarantor and the Collection Agent agree that each will abide by any decision rendered
in such arbitration, and that any court having jurisdiction may enforce such a decision.

     c. If the issue of whether Notification of Delivery has been effected is the subject of any
arbitration proceeding hereunder, then that issue (and only that issue) shall be determined in a
separate arbitration proceeding before any other claim is heard. The Distributor may not assert in
any such proceeding any counter-claim or other offset, or any defect other than the defect of a
failure to effect Notification of Delivery to the Distributor. The arbitration must result in a
finding that either (1) Notification of Delivery has been effected to the Distributor and, if so,
the date of such Notification of Delivery, or (2) Notification of Delivery has not been effected to
the Distributor. If there is a finding that Notification of Delivery was effected, then the
arbitrator shall immediately issue an award ordering the Distributor to immediately pay that
portion of the Minimum Guarantee which remains unpaid to the Collection Agent without asserting any
defenses. If, on the other hand, there is a finding that Notification of Delivery was not effected,
then the arbitrator shall promptly notify the Distributor, the Licensor, the Completion Guarantor
and the Collection Agent of such finding and shall issue a final arbitration award against the
Completion Guarantor requiring the Completion Guarantor to pay to the Collection Agent (for the
benefit of the Creditors) an amount equal to the Completion Guarantor’s liability to the Collection
Agent under the Completion Guaranty, together with all interest costs and expenses provided for in
this subparagraph c. below, subject to the terms, conditions and exclusions under the Completion
Guaranty (“Completion Guarantor’s Liability”), and (i) the Distribution Agreement and all
of the Distributor Rights shall automatically terminate, (ii) provided the Collection Agent has
theretofore been repaid an amount equal to the Completion Guarantor’s Liability in full, Completion
Guarantor may thereafter deal with the Distributor Rights without further regard to the Distributor
(without waiver of the Licensor’ s rights against the Distributor or the Distributor’s rights
against the Licensor), and (iii) the Distributor agrees that it shall execute and deliver to the
Completion Guarantor (or, as applicable, the Collection Agent), within ten (10) business days after
the Completion Guarantor’s (or, as applicable, the Collection Agent’s) request there for, such
documents and other instruments as shall be requested by the Completion Guarantor (or, as
applicable, the Collection Agent) to evidence such termination. Each of the parties hereto may also
initiate an arbitration as herein provided if Notification of Delivery is effected (or is deemed to
have been effected) and the Distributor fails to pay the Minimum Guarantee in accordance with the
terms hereof, in which case the arbitrator shall determine whether Notification of Delivery was
effected (or deemed to have been effected), and, if the arbitrator so finds, the arbitrator shall
issue an award against the Distributor that shall provide that the remaining balance of the Minimum
Guarantee, together with all interest amounts, costs and fees payable by the Distributor pursuant
to this subparagraph c. below, shall be

6

 

immediately paid by the Distributor to the Collection Agent. The Collection Agent or the Completion
Guarantor may also initiate an arbitration as herein provided in the event that the Completion
Guarantor acknowledges in writing that Notification of Delivery has not been effected and/or the
Completion Guarantor fails to timely pay to the Collection Agent all sums owed to the Collection
Agent under the Completion Guaranty or hereunder (including the interest amounts payable under this
subparagraph c. below). The arbitration award shall provide for payment by the losing party (i.e.,
the party or parties against whom an arbitration award is issued) of the fees and costs incurred in
connection with said arbitration, as well as the reasonable outside attorneys’ fee incurred by the
prevailing parties (i.e., all parties to the arbitration other than the losing party) in the
arbitration, and shall further provide for the payment by the losing party of interest on said
award at the same rate as interest is payable by the Licensor to the Creditors under the Financing
Agreements (in the event that the Completion Guarantor is the losing party, subject to the terms
and conditions of the Completion Guaranty) commencing on the date that Notification of Delivery was
effected. The arbitrator shall immediately upon conclusion of the arbitration proceedings render
and issue a written decision to all parties.

     d. Each of the parties hereto submits to the non-exclusive personal jurisdiction of the federal and
state courts of the Forum as an appropriate place for compelling arbitration or giving legal
confirmation of any arbitration award and irrevocably waives any objection that it may now or
hereafter have to the venue of any such enforcement proceeding brought in any of said courts and
any claim of inconvenient forum. Each of the parties agrees to accept service of process for all
arbitral proceedings in accordance with the Rules and to accept service of process for any judicial
or other proceedings by any means permitted by law, and to the extent permitted by law, by
registered mail. The Distributor waives application of the procedures for service of process
pursuant to the Hague Convention for Service Abroad of Judicial and Extrajudicial Documents in
Civil or Commercial Matters.

     5. Notices. All notices, statements, and copies thereof, required to be given must be given in
writing at the addresses for the parties set forth below, and delivered by hand, or by fax (with a
copy by registered or certified mail, return receipt requested), and shall be deemed to have been
given when personally delivered or, in the event of notice by fax, upon confirmation of transmittal
or two (2) days after dispatch by the sending party. The addresses of the parties hereto (until
notice of a change thereof is served as provided in this paragraph or pursuant to paragraph 7
below) shall be as follows:

	 	 	 	 
	 	 
	 	To the Collection Agent:

	 	General Electric Capital Corporation
	 	 

	 	2325 Lakeview Parkway, Suite 700
	 	 

	 	Alpharetta, Georgia 30004
	 	 

	 	Attention: Greg Watts
	 	 

	 	Telecopy: (678) 624-7903
	 	 
	 	 
	 	With a copy to:

	 	General Electric Capital Corporation
	 	 

	 	201 Merritt Seven, 4th Floor
	 	 

	 	Norwalk, Connecticut 06851
	 	 

	 	Attention: Steve Burke
	 	 

	 	Telecopy: (203) 956-4547
	 	 
	 	 
	 	With a copy to:

	 	General Electric Capital Corporation
	 	 

	 	2325 Lakeview Parkway, Suite 700
	 	 

	 	Alpharetta, Georgia 30004
	 	 

	 	Attention: MCE Counsel
	 	 

	 	Telecopy: (678) 624-7902

7

 

	 	 	 	 
	 	 
	 	 
	 	 
	 	With a copy to:

	 	Gibson, Dunn & Crutcher LLP
	 	 

	 	2029 Century Park East
	 	 

	 	Los Angeles, California 90067-3026
	 	 

	 	Attention: Lawrence J. Ulman, Esq.
	 	 

	 	Telecopier: (310) 551-8741

	 	 	 	 	 	 
	 
	 	To the Distributor:

	 	 	 	 
	 	 

	 	 
	 	 

	 	 	 	 
	 	 

	 	 
	 	 

	 	 	 	 
	 	 

	 	 
	 	 

	 	 	 	 
	 	 

	 	 
	 	 

	 	Attn:
	 	 
	 	 

	 	 	 	 
	 	 

	 	Fax No.:
	 	 
	 	 

	 	 	 	 

	 	 	 	 
	 
	 	To the Licensor:

	 	The Film Department LLC
	 	 

	 	8439 Sunset Boulevard, 2nd Floor
	 	 

	 	Hollywood, California 90069
	 	 

	 	Attn: Messrs. Mark Gill and Neil Sacker
	 	 

	 	Fax No: (866) 311-4894
	 	 
	 	 
	 	With a copy to:

	 	Loeb & Loeb LLP
	 	 

	 	10100 Santa Monica Boulevard, Suite 2200
	 	 

	 	Los Angeles, California 90067
	 	 

	 	Attn: Susan Williams
	 	 

	 	Fax No: (310) 282-2200

	 	 	 	 	 	 
	 
	 	To Completion Guarantor:

	 	 	 	 
	 	 

	 	 
	 	 

	 	 	 	 
	 	 

	 	 
	 	 

	 	 	 	 
	 	 

	 	 
	 	 

	 	 	 	 
	 	 

	 	 
	 	 

	 	Attn.:
	 	 
	 	 

	 	 	 	 
	 	 

	 	Fax No.:
	 	 
	 	 

	 	 	 	 

     6. Inconsistency. In the event of any inconsistency between this Agreement and the
Distribution Agreement, the provisions of this Agreement shall control, including, without
limitation, the provisions herein regarding the terms and conditions for paying any of the Assigned
Payments.

     7. Miscellaneous; Designation of New Collection Agent. This Agreement shall be governed by
the laws of the State of California. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns. Without limiting the
foregoing, the Distributor acknowledges that the Collection Agent party hereto on the date hereof
may, in accordance with terms of the Financing Agreements, resign or be replaced at anytime. In
such event, the Collection Agent party hereto on the date hereof (or any successor Collection
Agent) shall give written notice to the Distributor that the then current Collection Agent has
resigned or been replaced (which notice shall designate the new Collection Agent for the Creditors
and the notice information required by paragraph 5 hereof). Upon receipt by the Distributor of such
notice of replacement, the new Collection Agent designated thereby shall be deemed a party hereto
as if such party were an original signatory hereto with all the rights incident thereto. The
parties hereto

8

 

acknowledge and agree that this Agreement may be executed in counterparts, each of which shall be
an original, and that facsimile or electronic copies hereof shall be treated as originals, fully
binding and with full legal force and effect, and hereby waive any rights they may have to object
to said treatment.

Signatures
on next page

9

 

	 	 	 	 	 
	 	THE FILM DEPARTMENT LLC 
(“Licensor”)

 	 
	 	By:  	 	 
	 	Its: 	 	 
	 	 	 	 
	 
	 	 	 
	 	 	 
	 	(“Distributor”) 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	Its: 	 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	AGREED:

GENERAL ELECTRIC CAPITAL CORPORATION

(“Collection Agent”)

 	 
	By:  	 	 
	Its: 	 	 
	 	 	 
	 
	 	 	 
	 	 
	(“Completion Guarantor”) 	 
	 	 	 
	 
	 	 
	By:  	 	 
	Its: 	 	 
	 	 	 

10

 

	 	 	 	 	 

SCHEDULE “1”

MINIMUM GUARANTEE

     U.S. $                     (                                         U.S. Dollars) (which amount shall be a net
amount and shall not be subject to reduction of any kind, excluding the applicable territorial
withholding tax) payable as follows:

     U.S. $                     (                                         U.S. Dollars) payable within fifteen (15) calendars days from execution of the
Distribution Agreement;

     U.S. $                     (                                         U.S. Dollars) payable within fifteen (15) calendar days from notification by the Licensor,
Completion Guarantor or Agent stating that [the materials for the Picture from which commercially
acceptable release prints can be manufactured (at the Distributor’s own cost) are available]
[Distributor has been provided with laboratory access to the film and sound materials identified on
Schedule “2” attached hereto] (“Notification of Delivery”).

11

 

EXHIBIT H

FORM
OF ACCREDITED INVESTOR LETTER

 

in connection with

the offering referred to below

Ladies and Gentlemen:

     We are delivering this letter in connection with the issuance and sale of $30,000,000 principal
amount of Secured Second Lien Notes due 2014 (the “Notes”) issued by The Film Department
LLC, a Delaware limited liability company (the “Company”), and Warrants to purchase Class C
Units of The Film Department Holdings LLC, a Delaware limited liability company
(“Holdings”), as described in 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”; terms defined in the Securities Purchase Agreement and not otherwise
defined herein are used herein as therein defined), among the Company, Holdings, the Purchasers
named therein and General Electric Capital Corporation, as Collateral Agent. We hereby confirm
that:

          (1) We are an institutional “Accredited Investor” within the meaning of Rule 501(a)(l), (3) or (7)
under the Securities Act of 1933, as amended (the “Securities
Act”) 

          (2) Any purchase of Notes or Warrants by us will be for our own account or the account of one or
more other Accredited Investors as to which we exercise sole investment discretion;

          (3) We are not acquiring the Notes or Warrants for or on behalf of, and will not transfer the Notes
or Warrants to, any pension or welfare plan (as defined in Section 3 of the Employee Retirement
Income Security Act of 1974, as amended) except in accordance with applicable law;

          (4) We have such knowledge and experience in financial and business matters that we are capable of
evaluating the merits and risks of purchasing the Notes and Warrants, and we and any accounts for
which we are acting are able to bear the economic risks of an entire loss of our or their
investment in the Notes and Warrants;

          (5) We are not acquiring Notes or Warrants with a view to any distribution thereof in a transaction
that would violate the Securities Act or the securities laws of any state of the United States or
any other applicable jurisdiction; provided that the disposition of our property and the
property of any accounts for which we are acting as fiduciary shall remain at all times within our
and their control;

          (6) We have received a copy of the Securities Purchase Agreement and the Disclosure Documents
referred to therein and acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions of representatives of the
Company and Holdings and receive answers thereto, as we deem necessary

 

 

to verify the information contained in the Securities Purchase Agreement and the Disclosure
Documents; and

          (7) We acknowledge that neither the Notes nor Warrants have been registered under the Securities
Act and that neither the Notes nor Warrants may be offered or sold within the United States or to,
or for the benefit of, U.S. persons except as set forth below.

          We agree, on our own behalf and on behalf of each account for which we acquire any Notes or
Warrants, that, the purchased Notes and/or Warrants 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 Securities Act, if applicable) under the Securities Act, as in effect on the date
of the transfer of such Notes or Warrants, only (1) to the Company or Holdings, (2) to a person
whom we reasonably believe is a QIB purchasing for its own account or for the account of a QIB in a
transaction meeting the requirements of Rule 144A under the Securities Act, (3) in a transaction
meeting the requirements of Rule 144 under the Securities Act, (4) to an Accredited Investor that,
prior to such transfer, furnishes the Company a signed letter containing certain representations
and agreements relating to the registration of transfer of such Note or Warrant, as the case may be
(the form of which is substantially the same as 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 Securities Act, (6) in accordance with another exemption from the registration requirements of
the Securities 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.

          We understand that the Company and Holdings will not be required to accept for registration of
transfer any Notes or Warrants acquired by us, except upon presentation of evidence reasonably
satisfactory to the Company and Holdings that the foregoing restrictions on transfer have been
complied with. We further understand that the Notes and Warrants purchased by us will bear a legend
reflecting the substance of this paragraph. We further agree to provide to any person acquiring any
of the Notes or Warrants from us a notice advising such person that resales of the Notes and
Warrants are restricted as stated herein and that certificates representing the Notes and Warrants
will bear a legend to that effect.

          We acknowledge that you, the Company, Holdings and others will rely upon our acknowledgements,
representations and agreements set forth herein, and we agree to notify you promptly in writing if
any of our acknowledgements, representations or agreements herein cease to be accurate and
complete.

          We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf or on behalf of any investor
account for which we are acting as a fiduciary or agent.

          As used herein, the terms “offshore transaction,” “United States” and “U.S. person” have the
respective meanings given to them in Regulation S under the Securities Act.

          THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

 

 

	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	Address:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]