Document:

Credit, Security, Guaranty and Pledge Agreement

 Exhibit 10.1 
  
 EXECUTION VERSION 
  
 

 
  
 CREDIT, SECURITY, GUARANTY AND
PLEDGE AGREEMENT 
  
 Dated as of April 22, 2005 
  
 among 
  
 ANCHOR BAY ENTERTAINMENT, INC. 
 as Borrower, 
  
 THE GUARANTORS
REFERRED TO HEREIN, 
  
 IDT ENTERTAINMENT, INC.

 as Parent, 
  
 THE LENDERS REFERRED TO HEREIN 
  
 and 
  
 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION 
 as Administrative Agent and as Issuing
Bank 
  
 J.P. MORGAN SECURITIES INC. 
 as Sole Bookrunner and Sole Lead Arranger 
  
 NATIONAL CITY BANK 
 as Syndication Agent

  

 1 

							
	PARTIES	  	1
		
	INTRODUCTORY STATEMENT	  	1
			
	1.	  	DEFINITIONS	  	2
			
	2.	  	THE LOANS	  	22
				
	 	  	SECTION 2.1.	 	Loans.	  	22
	 	  	SECTION 2.2.	 	Making of Loans.	  	23
	 	  	SECTION 2.3.	 	Notes	  	24
	 	  	SECTION 2.4.	 	Interest on Notes.	  	25
	 	  	SECTION 2.5.	 	Commitment Fees and Other Fees.	  	25
	 	  	SECTION 2.6.	 	Optional Termination or Reduction of Commitments.	  	26
	 	  	SECTION 2.7.	 	Default Interest; Alternate Rate of Interest.	  	26
	 	  	SECTION 2.8.	 	Continuation and Conversion of Loans	  	27
	 	  	SECTION 2.9.	 	Voluntary and Mandatory Prepayment of Loans; Reimbursement of Lenders	  	28
	 	  	SECTION 2.10.	 	Increased Costs	  	30
	 	  	SECTION 2.11.	 	Change in Legality.	  	32
	 	  	SECTION 2.12.	 	Manner of Payments	  	32
	 	  	SECTION 2.13.	 	Taxes	  	33
	 	  	SECTION 2.14.	 	Interest Adjustments	  	34
	 	  	SECTION 2.15.	 	Letters of Credit	  	35
			
	3.	  	REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES	  	38
				
	 	  	SECTION 3.1.	 	Existence and Power.	  	38
	 	  	SECTION 3.2.	 	Authority and No Violation.	  	39
	 	  	SECTION 3.3.	 	Governmental Approval	  	40
	 	  	SECTION 3.4.	 	Binding Agreements	  	40
	 	  	SECTION 3.5.	 	Financial Statements	  	40
	 	  	SECTION 3.6.	 	No Material Adverse Change	  	40
	 	  	SECTION 3.7.	 	Ownership of Pledged Securities, Subsidiaries, etc.	  	40
	 	  	SECTION 3.8.	 	Copyrights, Trademarks and Other Rights	  	41
	 	  	SECTION 3.9.	 	Fictitious Names	  	42
	 	  	SECTION 3.10.	 	Title to Properties	  	42
	 	  	SECTION 3.11.	 	Places of Business	  	42

  

 3 

							
	 	  	SECTION 3.12.	 	Litigation	  	42
	 	  	SECTION 3.13.	 	Federal Reserve Regulations	  	42
	 	  	SECTION 3.14.	 	Investment Company Act	  	43
	 	  	SECTION 3.15.	 	Taxes	  	43
	 	  	SECTION 3.16.	 	Compliance with ERISA	  	43
	 	  	SECTION 3.17.	 	Agreements	  	44
	 	  	SECTION 3.18.	 	Security Interest	  	44
	 	  	SECTION 3.19.	 	Environmental Liabilities	  	44
	 	  	SECTION 3.20.	 	Pledged Securities	  	45
	 	  	SECTION 3.21.	 	Compliance with Laws	  	46
	 	  	SECTION 3.22.	 	Subsidiaries	  	46
	 	  	SECTION 3.23.	 	Solvency	  	46
	 	  	SECTION 3.24.	 	True and Complete Disclosure	  	46
			
	4.	  	CONDITIONS OF LENDING	  	47
				
	 	  	SECTION 4.1.	 	Conditions Precedent to Initial Loan	  	47
	 	  	SECTION 4.2.	 	Conditions Precedent to Each Loan and Letter of Credit	  	51
			
	5.	  	AFFIRMATIVE COVENANTS	  	52
				
	 	  	SECTION 5.1.	 	Financial Statements and Reports	  	52
	 	  	SECTION 5.2.	 	Corporate Existence; Compliance with Laws	  	55
	 	  	SECTION 5.3.	 	Maintenance of Properties	  	55
	 	  	SECTION 5.4.	 	Notice of Material Events	  	55
	 	  	SECTION 5.5.	 	Insurance	  	56
	 	  	SECTION 5.6.	 	Music	  	57
	 	  	SECTION 5.7.	 	Copyrights and Trademarks	  	58
	 	  	SECTION 5.8.	 	Books and Records, Examination	  	58
	 	  	SECTION 5.9.	 	Third Party Audit Rights	  	59
	 	  	SECTION 5.10.	 	Observance of Agreements	  	59
	 	  	SECTION 5.11.	 	Laboratories; No Removal	  	59
	 	  	SECTION 5.12.	 	Taxes and Charges; Indebtedness in Ordinary Course of Business	  	60
	 	  	SECTION 5.13.	 	Liens	  	60
	 	  	SECTION 5.14.	 	Further Assurances; Security Interests	  	60
	 	  	SECTION 5.15.	 	ERISA Compliance and Reports	  	61

  

 4 

							
	 	  	SECTION 5.16.	 	Environmental Laws	  	61
	 	  	SECTION 5.17.	 	Use of Proceeds	  	62
	 	  	SECTION 5.18.	 	Distribution Agreements, Letters of Credit, Etc.	  	62
	 	  	SECTION 5.19.	 	Location of Production Accounts	  	63
	 	  	SECTION 5.20.	 	Performance of Obligations	  	63
	 	  	SECTION 5.21.	 	Indebtedness	  	63
	 	  	SECTION 5.22.	 	Subsidiaries	  	63
			
	6.	  	NEGATIVE COVENANTS	  	64
				
	 	  	SECTION 6.1.	 	Limitations on Indebtedness	  	64
	 	  	SECTION 6.2.	 	Limitations on Liens	  	65
	 	  	SECTION 6.3.	 	Limitation on Guaranties	  	67
	 	  	SECTION 6.4.	 	Limitations on Investments	  	67
	 	  	SECTION 6.5.	 	Restricted Payments	  	68
	 	  	SECTION 6.6.	 	Consolidation, Merger or Sale of Assets, etc	  	68
	 	  	SECTION 6.7.	 	Receivables	  	69
	 	  	SECTION 6.8.	 	Sale and Leaseback	  	69
	 	  	SECTION 6.9.	 	Places of Business; Change of Name, Jurisdiction	  	69
	 	  	SECTION 6.10.	 	Limitations on Capital Expenditures	  	69
	 	  	SECTION 6.11.	 	Transactions with Affiliates	  	69
	 	  	SECTION 6.12.	 	Business Activities	  	69
	 	  	SECTION 6.13.	 	Fiscal Year End	  	69
	 	  	SECTION 6.14.	 	Overhead Expense	  	69
	 	  	SECTION 6.15.	 	Minimum Consolidated Tangible Net Worth	  	70
	 	  	SECTION 6.16.	 	Cash Investment in Licenses, Masters or Film	  	70
	 	  	SECTION 6.17.	 	Minimum Combined Operating Cash Flow	  	70
	 	  	SECTION 6.18.	 	Maximum Allowable Outstanding Amount	  	70
	 	  	SECTION 6.19.	 	Bank Accounts	  	71
	 	  	SECTION 6.20.	 	ERISA Compliance	  	71
	 	  	SECTION 6.21.	 	Hazardous Materials	  	71
	 	  	SECTION 6.22.	 	Use of Proceeds of Loans	  	71
	 	  	SECTION 6.23.	 	Swap Agreements	  	71
	 	  	SECTION 6.24.	 	Subsidiaries	  	71
	 	  	SECTION 6.25.	 	Modification of Material Agreements	  	72
	 	  	SECTION 6.26.	 	No Negative Pledge	  	72

  

 5 

							
	7.	  	EVENTS OF DEFAULT	  	72
			
	8.	  	GRANT OF SECURITY INTEREST; REMEDIES	  	75
				
	 	  	SECTION 8.1.	 	Security Interests	  	75
	 	  	SECTION 8.2.	 	Use of Collateral	  	75
	 	  	SECTION 8.3.	 	Collection Accounts	  	76
	 	  	SECTION 8.4.	 	Credit Parties to Hold in Trust	  	76
	 	  	SECTION 8.5.	 	Collections, etc	  	76
	 	  	SECTION 8.6.	 	Possession, Sale of Collateral, etc	  	77
	 	  	SECTION 8.7.	 	Application of Proceeds after Event of Default	  	78
	 	  	SECTION 8.8.	 	Power of Attorney	  	78
	 	  	SECTION 8.9.	 	Financing Statements, Direct Payments	  	79
	 	  	SECTION 8.10.	 	Further Assurances	  	79
	 	  	SECTION 8.11.	 	Termination and Release	  	80
	 	  	SECTION 8.12.	 	Remedies Not Exclusive	  	80
	 	  	SECTION 8.13.	 	Quiet Enjoyment	  	80
	 	  	SECTION 8.14.	 	Continuation and Reinstatement	  	80
			
	9.	  	GUARANTY OF GUARANTORS	  	81
				
	 	  	SECTION 9.1.	 	Guaranty.	  	81
	 	  	SECTION 9.2.	 	No Impairment of Guaranty, etc	  	82
	 	  	SECTION 9.3.	 	Continuation and Reinstatement, etc	  	82
	 	  	SECTION 9.4.	 	Limitation on Guaranteed Amount, etc	  	83
			
	10.	  	GUARANTY of parent	  	83
				
	 	  	SECTION 10.1.	 	Guaranty	  	83
	 	  	SECTION 10.2.	 	No Impairment of Guaranty, etc	  	85
	 	  	SECTION 10.3.	 	Continuation and Reinstatement, etc.	  	85
	 	  	SECTION 10.4.	 	Representations and Warranties of the Parent	  	86
	 	  	SECTION 10.5.	 	Affirmative Covenants of the Parent	  	88
			
	11.	  	PLEDGE	  	90
				
	 	  	SECTION 11.1.	 	Pledge	  	90
	 	  	SECTION 11.2.	 	Covenant	  	90
	 	  	SECTION 11.3.	 	Registration in Nominee Name; Denominations	  	91
	 	  	SECTION 11.4.	 	Voting Rights; Dividends; etc	  	91

  

 6 

							
	 	  	SECTION 11.5.	 	Remedies Upon Default	  	91
	 	  	SECTION 11.6.	 	Application of Proceeds of Sale and Cash	  	93
	 	  	SECTION 11.7.	 	Securities Act, etc	  	93
	 	  	SECTION 11.8.	 	Continuation and Reinstatement	  	94
	 	  	SECTION 11.9.	 	Termination	  	94
			
	12.	  	CASH COLLATERAL	  	94
				
	 	  	SECTION 12.1.	 	Cash Collateral Accounts	  	94
	 	  	SECTION 12.2.	 	Investment of Funds	  	95
	 	  	SECTION 12.3.	 	Grant of Security Interest	  	95
	 	  	SECTION 12.4.	 	Remedies	  	95
			
	13.	  	THE ADMINISTRATIVE AGENT AND THE ISSUING BANK	  	96
				
	 	  	SECTION 13.1.	 	Administration by the Administrative Agent.	  	96
	 	  	SECTION 13.2.	 	Payments	  	97
	 	  	SECTION 13.3.	 	Sharing of Setoffs and Cash Collateral	  	98
	 	  	SECTION 13.4.	 	Notice to the Lenders	  	98
	 	  	SECTION 13.5.	 	Liability of the Administrative Agent and Issuing Bank	  	98
	 	  	SECTION 13.6.	 	Reimbursement and Indemnification	  	99
	 	  	SECTION 13.7.	 	Rights of Administrative Agent	  	100
	 	  	SECTION 13.8.	 	Independent Investigation by Lenders	  	100
	 	  	SECTION 13.9.	 	Agreement of Required Lenders	  	100
	 	  	SECTION 13.10.	 	Notice of Transfer	  	100
	 	  	SECTION 13.11.	 	Successor Administrative Agent	  	100
	 	  	SECTION 13.12.	 	Successor Issuing Bank	  	101
			
	14.	  	MISCELLANEOUS	  	102
				
	 	  	SECTION 14.1.	 	Notices	  	102
	 	  	SECTION 14.2.	 	Survival of Agreement, Representations and Warranties, etc	  	102
	 	  	SECTION 14.3.	 	Successors and Assigns; Syndications; Loan Sales; Participations	  	103
	 	  	SECTION 14.4.	 	Expenses; Documentary Taxes	  	106
	 	  	SECTION 14.5.	 	Indemnity	  	107
	 	  	SECTION 14.6.	 	CHOICE OF LAW	  	108
	 	  	SECTION 14.7.	 	WAIVER OF JURY TRIAL	  	108

  

 7 

							
	 	 	SECTION 14.8.	 	WAIVER WITH RESPECT TO DAMAGES	  	108
	 	 	SECTION 14.9.	 	No Waiver	  	109
	 	 	SECTION 14.10.	 	Amendments, etc.	  	109
	 	 	SECTION 14.11.	 	Severability	  	110
	 	 	SECTION 14.12.	 	SERVICE OF PROCESS	  	110
	 	 	SECTION 14.13.	 	Headings	  	111
	 	 	SECTION 14.14.	 	Execution in Counterparts	  	111
	 	 	SECTION 14.15.	 	Subordination of Intercompany Indebtedness, Receivables and Advances.	  	112
	 	 	SECTION 14.16.	 	USA Patriot Act	  	112
	 	 	SECTION 14.17.	 	Entire Agreement	  	112
	 	 	SECTION 14.18.	 	Confidentiality	  	112

  

 8 

 Schedules 
  

			
	1	  	Schedule of Commitments
	2	  	Guarantors
	3.1	  	List of Jurisdictions
	3.2(b)	  	Restrictions on Transfer of Pledged Securities
	3.7(a)	  	Ownership of the Capital Stock of the Credit Group
	3.7(b)	  	Ownership of Pledged Securities other than Credit Parties
	3.8(a)	  	Items of Product
	3.8(b)	  	Trademarks
	3.8(c)	  	Applications and Registrations Not in Full Force and Effect
	3.9	  	Fictitious Names
	3.11	  	Chief Executive Office, Location of Collateral and Records
	3.12	  	Litigation
	3.16	  	ERISA Plans
	3.17	  	Agreements
	3.18	  	Filing Offices for UCC-1 Financing Statements
	3.19	  	Environmental Liabilities
	5.1(i)	  	Cash Flow Projections
	6.1	  	Existing Indebtedness
	6.2	  	Existing Liens
	6.3	  	Existing Guaranties
	6.4	  	Existing Investments
	6.11	  	Transactions with Affiliates
	6.19	  	Bank Accounts
	6.21	  	Hazardous Materials

  

 9 

 Exhibits 
  

			
	A	 	Form of Note
	B-1	 	Form of Opinion of O’Melveny & Myers LLP, counsel to the Credit Parties
	B-2	 	Form of Opinion of Williams Williams Ruby & Plunkett, P.C., Michigan counsel to the Borrower
	C-1	 	Form of Copyright Security Agreement
	C-2	 	Form of Copyright Security Agreement Supplement
	D	 	Form of Laboratory Access Letter
	E-1	 	Form of Pledgeholder Agreement (Uncompleted Items of Product)
	E-2	 	Form of Pledgeholder Agreement (Completed Items of Product)
	F	 	Form of Trademark Security Agreement
	G	 	Form of Contribution Agreement
	H	 	Form of Borrowing Certificate
	I	 	Form of Assignment and Assumption
	J	 	Form of Instrument of Assumption and Joinder
	K	 	Form of Notice of Assignment and Irrevocable Instructions
	L	 	Form of Account Control Agreement
	M	 	Form of Debenture
	N	 	Form of Pledge Agreement

  

 10 

 CREDIT, SECURITY, GUARANTY AND PLEDGE AGREEMENT dated as of April 22, 2005 (as amended,
supplemented or otherwise modified, renewed or replaced from time to time, the “Credit Agreement”) among (i) ANCHOR BAY ENTERTAINMENT, INC., a Michigan corporation, as Borrower, (ii) the GUARANTORS referred to herein,
(iii) IDT ENTERTAINMENT, INC., a Delaware corporation, as Parent, (iv) the LENDERS referred to herein and (v) JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association, as agent for the Lenders and as Issuing
Bank. 
  
 INTRODUCTORY STATEMENT 
  
 Terms not otherwise defined above or in this Introductory Statement are as
defined in Article 1 hereof or as defined elsewhere herein. 
  
 The Borrower has requested that the Lenders make available a $50,000,000 five-year secured revolving credit facility (of which up to $15,000,000 may be used for the issuance of Letters of Credit) (the “Facility”) which may
be increased to up to $75,000,000 in certain circumstances described herein. The Facility will be used (i) to fund secured loans to be made by the Borrower to two of its Affiliates, Manga Entertainment, Inc. (“Manga”) and New Arc
Entertainment, Inc. (“New Arc”), (ii) to pay a dividend to IDT Entertainment, Inc., a Delaware corporation (“Parent”) on the Closing Date of up to $25,000,000, (iii) to pay certain other dividends from time to time
to the extent permitted hereunder and (iv) for general working capital purposes. 
  
 To provide assurance for the repayment of the Loans and the other Obligations of the Borrower hereunder, the Borrower will, among other things, provide or cause to be provided to the Administrative Agent, for the
benefit of itself, the Issuing Bank and the Lenders, the following (each as more fully described herein): 
  

	 	(i)	a security interest in the Collateral from each of the Credit Parties pursuant to Article 8 hereof 

  

	 	(ii)	a guaranty of the Obligations by each of the Guarantors pursuant to Article 9 hereof; and 

  

	 	(iii)	a pledge by each of the Pledgors and TLL of the Pledged Securities owned by it pursuant to Article 10 hereof and pursuant to the Pledge Agreement. 

  
 Subject to the terms and conditions set forth herein, the Administrative
Agent is willing to act as agent for the Lenders, the Issuing Bank is willing to issue Letters of Credit and each Lender is willing to make Loans to the Borrower and participate in the Letters of Credit, each as provided herein, in an aggregate
amount at any one time outstanding not in excess of its Commitment hereunder. 

 Accordingly, the parties hereto hereby agree as follows: 
  
 1. DEFINITIONS 
  
 For the purposes hereof unless the context otherwise requires, all Section references herein shall be deemed to correspond
with Sections herein, the following terms shall have the meanings indicated, all accounting terms not otherwise defined herein shall have the respective meanings accorded to them under GAAP and all terms defined in the UCC and not otherwise defined
herein shall have the respective meanings accorded to them therein. Unless the context otherwise requires, any of the following terms may be used in the singular or the plural, depending on the reference: 
  
 “ABE R2Communications” shall mean ABE R2Communications,
Inc., a California corporation. 
  
 “ABE R2Video”
shall mean ABE R2Video, L.P., a California limited partnership. 
  
 “Account Control Agreement” shall mean an account control agreement substantially in the form of Exhibit L hereto or such other account control agreement in form and substance satisfactory to the Administrative
Agent. 
  
 “Administrative Agent” shall mean
JPMorgan Chase Bank, N.A., in its capacity as agent for the Lenders hereunder, or such successor Administrative Agent as may be appointed pursuant to Section 13.11 hereof. 
  
 “Affiliate” shall mean any Person, which, directly or indirectly, is in control of, is controlled by, or is
under common control with, another Person. For purposes of this definition, a Person shall be deemed to be “controlled by” another Person if such latter Person possesses, directly or indirectly, power either to direct or cause the
direction of the management and policies of such controlled Person whether by contract or otherwise. 
  
 “Alternate Base Rate” shall mean, for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect for such day plus 1⁄2 of 1%. For purposes hereof, “Prime Rate” shall mean the
rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate in effect at its principal office in New York City. “Base CD Rate” shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment Rate. “Three-Month Secondary CD Rate” shall mean, for any day, the secondary market rate for three-month certificates of deposit reported as being in effect on
such day (or, if such day is not a Business Day, the next preceding Business Day) by the Board through the public information telephone line of the Federal Reserve Bank of New York (which rate will, under current practices of the Board, be published
in Federal Reserve Statistical Release H.15(519) during the week following such day), or, if such rate shall not be so reported on such day or such next preceding Business Day, the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City received at approximately 10:00 a.m., New York City time, on such day (or, if such day shall not be a Business Day, on the next preceding Business Day) by the Administrative Agent
from three 
  

 2 

 New York City negotiable certificate of deposit dealers of recognized standing selected by it. “Statutory
Reserves” shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking authority to which the Administrative Agent is subject for new negotiable non-personal time deposits in Dollars of over $100,000 with
maturities approximately equal to three months. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. “Federal Funds Effective Rate” shall mean, for any day, the
weighted average (rounded upwards, if necessary to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average (rounded upwards, if necessary to the next 1/100 of 1%) of the quotations for the day of such transactions received by
the Administrative Agent from three Federal funds brokers of recognized standing selected by it. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms hereof, the Alternate Base Rate shall be determined without regard
to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. 
  
 “Alternate Base Rate Loan” shall mean a Loan based on the Alternate Base Rate in accordance with the provisions of Article 2 hereof.

  
 “Applicable Law” shall mean all provisions of
statutes, rules, regulations and orders of the United States of America, any state thereof or municipality therein or of any foreign governmental body or of any regulatory agency applicable to the Person in question, and all orders and decrees of
all courts and arbitrators in proceedings or actions in which the Person in question is a party. 
  
 “Applicable Margin” shall mean (i) in the case of Alternate Base Rate Loans, 1.25% per annum and (ii) in the case of LIBOR Loans, 2.25%
per annum. 
  
 “Arranger” shall mean J.P. Morgan
Securities Inc., in its capacity as sole lead arranger and sole bookrunner in connection with the Facility. 
  
 “Assessment Rate” shall mean, for any day, the annual assessment rate in effect on such day that is payable by a member of the Bank
Insurance Fund classified as “well-capitalized” and within supervisory subgroup “B” (or a comparable successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any successor provision) to the Federal Deposit
Insurance Corporation for insurance by such Corporation of time deposits made in dollars at the offices of such member in the United States; provided that if, as a result of any change in any law, rule or regulation, it is no longer possible
to determine the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall be determined by the Administrative Agent to be representative of the cost of such insurance to the Lenders. 
  

 3 

 “Assignment and Assumption” shall mean an agreement substantially in the form of
Exhibit I hereto, executed by the assignor, assignee and other parties as contemplated thereby. 
  
 “Authorized Officer” shall mean with respect to any Person, its Chairman, Chief Executive Officer, President, Chief Financial Officer or
Chief Operating Officer. 
  
 “Bankruptcy Code”
shall mean the Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, as codified at 11 U.S.C. § 101 et seq. 
  
 “Board” shall mean the Board of Governors of the Federal Reserve System of the United States of America. 
  
 “Borrower” shall mean Anchor Bay Entertainment, Inc., a
Michigan corporation. 
  
 “Borrowing” shall mean
a group of Loans of a single Type and as to which a single Interest Period is in effect on a single day. 
  
 “Borrowing Certificate” shall mean a borrowing certificate, substantially in the form of Exhibit H hereto, to be delivered by the
Borrower to the Administrative Agent in connection with each Borrowing. 
  
 “Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks are required or permitted to close in either the State of New York or the State of California; provided, however,
that when used in connection with a LIBOR Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits on the London Interbank Market. 
  
 “Business Plan” shall mean a business plan for the Credit
Group in form and substance reasonably acceptable to the Administrative Agent. 
  
 “Capital Expenditures” shall mean, with respect to any Person for any period, the aggregate of all expenditures (whether paid in cash or accrued as a liability) by such Person during that period
which, in accordance with GAAP, are or should be included in “additions to property, plant or equipment” or similar items included in cash flows (including Capital Leases). For purposes of this definition, the purchase price of equipment
that is purchased simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such
equipment for the equipment being traded in at such time, or the amount of such proceeds, as the case may be. 
  
 “Capital Lease”, as applied to any Person, shall mean any lease of any property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person. 
  

 4 

 “Cash Collateral Account” shall have the meaning given to such term in Section 12.1
hereof. 
  
 “Cash Equivalents” means: (a) direct
obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the date of acquisition thereof; (b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s; (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000 or that it is a Lender; (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria
described in clause (c) above; (e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P or Aaa by Moody’s, and
(iii) have portfolio assets of at least $5,000,000,000; (f) money market instruments that price at par in short-term auction (so called “auction market securities”), are offered by Merrill Lynch and are rated AAA by S&P or Aaa by
Moody’s; and (g) direct obligations of any State of the United States of America (or by any subdivision thereof to the extent such obligations are backed by the full faith and credit of such State), in each case, (i) maturing within one year
from the date of acquisition thereof, and (ii) rated AAA by S&P or Aaa by Moody’s. 
  
 “Change in Control” shall mean (a) IDT shall (i) cease to own at least 51% of the voting Equity Interests of the Parent or (ii) cease to have voting control of the board of directors of the Parent, or
(b) the Parent shall cease to own at least 75% of the Equity Interests of each of the Borrower, Manga UK and New Arc or cease to have voting control of the board of directors of any of them, or (c) Manga UK shall cease to own 100% of the Equity
Interests of Manga or cease to have voting control of the board of directors of Manga, or (d) TLL shall cease to own 100% of the Equity Interests of any of the Top-Tier Foreign Anchor Bay Companies or cease to have voting control of the board of
directors of any of them, or (e) any Top-Tier Foreign Anchor Bay Company shall cease to own 100% of the Equity Interests of the Second-Tier Foreign Anchor Bay Company owned by it on the date hereof, or cease to have voting control of the board of
directors of such Second-Tier Foreign Anchor Bay Company. 
  
 “Change in Law” shall mean (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.10(b) by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any)
with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. 
  

 5 

 “Change in Management” shall mean that either (i) any two of Stephen Brown, Morris
Berger, Sam Abraham, and John Hyde, shall cease for any reason to actively manage the Borrower and the Guarantors unless the Borrower or the Guarantors, as applicable, retains a replacement therefor acceptable to the Administrative Agent on terms
acceptable to the Administrative Agent, within 120 days of the date of such event, or (ii) neither Sam Abraham nor John Hyde continues to actively manage the Borrower and the Guarantors. 
  
 “Closing Date” shall mean the date on which the conditions precedent set forth in Section 4.1 hereof have
been satisfied or waived. 
  
 “Code” shall mean
the Internal Revenue Code of 1986 and the rules and regulations issued thereunder, as now and hereafter in effect, as codified at 26 U.S.C. § 1 et seq. or any successor provision thereto. 
  
 “Collateral” shall mean with respect to each Credit Party,
all of such Credit Party’s right, title and interest in and to all personal property, tangible and intangible, wherever located or situated and whether now owned, presently existing or hereafter acquired or created, including, but not limited
to, all goods, accounts, instruments, intercompany obligations, contract rights, partnership and joint venture interests, documents, chattel paper, general intangibles, goodwill, equipment, machinery, inventory, investment property, copyrights,
trademarks, trade names, insurance proceeds, cash, deposit accounts, letter of credit rights and the Pledged Securities, and any proceeds thereof, products thereof or income therefrom, further including but not limited to, all of such Credit
Party’s right, title and interest in and to each and every item and type of Item of Product, the scenario, screenplay or script upon which an Item of Product is based, all of the properties thereof, tangible and intangible, and all domestic and
foreign copyrights and all other rights therein and thereto, of every kind and character, whether now in existence or hereafter to be made or produced, and whether or not in possession of such Credit Party, including with respect to each and every
Item of Product and without limiting the foregoing language, each and all of the following particular rights and properties (in each case to the extent they are now owned or hereafter created or acquired by such Credit Party): 
  

	 	(i)	all scenarios, screenplays and/or scripts at every stage thereof; 

  

	 	(ii)	all common law and/or statutory copyright and other rights in all literary and other properties (hereinafter called “said literary properties”) which form the basis
of such Item of Product and/or which are or will be incorporated into such Item of Product, all component parts of such Item of Product consisting of said literary properties, all motion picture rights in and to the story, all treatments of said
story and said literary properties, together with all preliminary and final screenplays used and to be used in connection with such Item of Product, and all other literary material upon which such Item of Product is based or from which it is
adapted; 

  

	 	(iii)	all rights for all media in and to all music and musical compositions used and to be used in such Item of Product, if any, including, each without limitation, all rights to record,
re-record, produce, reproduce or synchronize all of said music and musical compositions, including, without limitation, reuse fees, royalties and all other amounts payable with respect to said music and musical compositions;

  

 6 

	 	(iv)	all tangible personal property relating to such Item of Product, including, without limitation, all exposed film, developed film, positives, negatives, prints, positive prints,
answer prints, special effects, preparing materials (including interpositives, duplicate negatives, internegatives, color reversals, intermediates, lavenders, fine grain master prints and matrices, and all other forms of pre-print elements), sound
tracks, cutouts, trims and any and all other physical properties of every kind and nature relating to such Item of Product whether in completed form or in some state of completion, and all masters, duplicates, drafts, versions, variations and copies
of each thereof, in all formats whether on film, videotape, disk or otherwise and all music sheets and promotional materials relating to such Item of Product (collectively, the “Physical Materials”); 

  

	 	(v)	all collateral, allied, subsidiary and merchandising rights appurtenant or related to such Item of Product including, without limitation, the following rights: all rights to produce
remakes, sequels or prequels to such Item of Product based upon such Item of Product, said literary properties or the theme of such Item of Product and/or the text or any part of said literary properties; all rights throughout the world to
broadcast, transmit and/or reproduce by means of television (including commercially sponsored, sustaining and subscription or “pay” television) or by any process analogous thereto, now known or hereafter devised, such Item of Product or
any remake, sequel or prequel to the Item of Product; all rights to produce primarily for television or similar use, a motion picture or series of motion pictures, by use of film or any other recording device or medium now known or hereafter
devised, based upon such Item of Product, said literary properties or any part thereof, including, without limitation, based upon any script, scenario or the like used in such Item of Product; all merchandising rights including, without limitation,
all rights to use, exploit and license others to use and exploit any and all commercial tie-ups of any kind arising out of or connected with said literary properties, such Item of Product, the title or titles of such Item of Product, the characters
of such Item of Product and/or said literary properties 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 such Item of Product, any
remake, sequel or prequel thereof and/or said literary properties; 

  

	 	(vi)	all statutory copyrights, domestic and foreign, obtained or to be obtained on such Item of Product, together with any and all copyrights obtained or to be obtained in connection
with such Item of Product or any underlying or component elements of such Item of Product, including, in each case without limitation, all copyrights on the property described in subparagraphs (i) through (v) inclusive, of this definition, together
with 

  

 7 

 the right to copyright (and all rights to renew or extend such copyrights, if applicable) and the right
to sue in the name of any of the Credit Parties for past, present and future infringements of copyright; 
  

	 	(vii)	all insurance policies and completion bonds connected with such Item of Product and all proceeds which may be derived therefrom; 

  

	 	(viii)	all rights to distribute, sell, rent, license the exhibition of and otherwise exploit and turn to account such Item of Product, the Physical Materials, the motion picture rights in
and to the story and/or other literary material upon which such Item of Product is based or from which it is adapted, and the music and musical compositions used or to be used in such Item of Product; 

  

	 	(ix)	any and all sums, proceeds, money, products, profits or increases, including money profits or increases (as those terms are used in the UCC or otherwise) or other property obtained
or to be obtained from the distribution, exhibition, sale or other uses or dispositions of such Item of Product or any part of such Item of Product, including, without limitation, all sums, proceeds, profits, products and increases, whether in money
or otherwise, from the sale, rental or licensing of such Item of Product and/or any of the elements of such Item of Product including, without limitation, from collateral, allied, subsidiary and merchandising rights, and further including, without
limitation, all monies held in any Collection Account; 

  

	 	(x)	the dramatic, nondramatic, stage, television, radio and publishing rights, title and interest in and to such Item of Product, and the right to obtain copyrights and renewals of
copyrights therein, if applicable; 

  

	 	(xi)	the name or title of such Item of Product and all rights of such Credit Party to the use thereof, including, without limitation, rights protected pursuant to trademark, service
mark, unfair competition and/or any other applicable statutes, common law, or other rule or principle of law; 

  

	 	(xii)	any and all contract rights and/or chattel paper which may arise in connection with such Item of Product; 

  

	 	(xiii)	all accounts and/or other rights to payment which such Credit Party presently owns or which may arise in favor of such Credit Party in the future, including, without limitation, any
refund or rebate in connection with a completion bond or otherwise, all accounts and/or rights to payment due from Persons in connection with the distribution of such Item of Product, or from the exploitation of any and all of the collateral,
allied, subsidiary, merchandising and other rights in connection with such Item of Product; 

  

	 	(xiv)	any and all “general intangibles” (as that term is defined in the UCC) not elsewhere included in this definition, including, without limitation, any

  

 8 

 and all general intangibles consisting of any right to payment which may arise in connection with the
distribution or exploitation of any of the rights set out herein, and any and all general intangible rights in favor of such Credit Party for services or other performances by any third parties, including actors, writers, directors, individual
producers and/or any and all other performing or nonperforming artists in any way connected with such Item of Product, any and all general intangible rights in favor of such Credit Party relating to licenses of sound or other equipment, or licenses
for any photograph or photographic or other processes, and any and all general intangibles related to the distribution or exploitation of such Item of Product including general intangibles related to or which grow out of the exhibition of such Item
of Product and the exploitation of any and all other rights in such Item of Product set out in this definition; 
  

	 	(xv)	any and all goods including, without limitation, inventory (as that term is defined in the UCC) which may arise in connection with the creation, production or delivery of such Item
of Product and which goods pursuant to any production or distribution agreement or otherwise are owned by such Credit Party; 

  

	 	(xvi)	all and each of the rights, regardless of denomination, which arise in connection with the acquisition, creation, production, completion of production, delivery, distribution, or
other exploitation of such Item of Product, including, without limitation, any and all rights in favor of such Credit Party, the ownership or control of which are or may become necessary or desirable, in the reasonable opinion of the Administrative
Agent, in order to complete production of such Item of Product in the event that the Administrative Agent exercises any rights it may have to take over and complete production of such Item of Product; 

  

	 	(xvii)	any and all documents issued by any pledgeholder or bailee with respect to such Item of Product or any Physical Materials (whether or not in completed form) with respect thereto;

  

	 	(xviii)	any and all Production Accounts or other bank accounts established by such Credit Party with respect to such Item of Product; 

  

	 	(xix)	any and all rights of such Credit Party under any Distribution Agreements relating to such Item of Product; and 

  

	 	(xx)	any and all rights of such Credit Party under contracts relating to the production or acquisition of such Item of Product or otherwise, including, but not limited to, all such
contracts which have been delivered to the Administrative Agent pursuant to this Credit Agreement. 

  
 “Collection Account” shall have the meaning given to such term in Section 8.3(a) hereof. 
  

 9 

 “Combined Operating Cash Flow” shall mean the sum of the Operating Cash Flow of the
Credit Group. 
  
 “Commitment” shall mean the
commitment of each Lender to make Loans to the Borrower and participate in Letters of Credit up to an aggregate amount not in excess of the amount set forth (i) opposite its name under the column entitled “Commitment” in the Schedule of
Commitments, or (ii) in any applicable Assignment and Assumption(s) to which it may be a party, as the case may be, as such amount may be reduced from time to time in accordance with the terms of this Credit Agreement. 
  
 “Commitment Fees” shall have the meaning given to such term
in Section 2.5(a) hereof. 
  
 “Commitment Termination
Date” shall mean (i) April 21, 2010, or (ii) such earlier date on which the Commitments shall terminate in accordance with Section 2.6 or Article 7 hereof. 
  
 “Completed” and “Completion” shall mean with respect to any Item of Product, that either
(A) sufficient elements have been delivered by a Credit Party to, and accepted, deemed or determined to be accepted and/or exploited by, a Person (other than the Borrower or an Affiliate thereof) to permit such Person to exhibit the Item of Product
in the theatrical or other medium (including any internet or interactive exploitation) for which the item of Product is intended for initial exploitation; (B) (i) the Borrower has delivered to the Administrative Agent a laboratory access letter or
pledgeholder agreement which states that an independent laboratory has in its possession a complete final 35mm or 70mm (or other size which has become standard in the industry) composite positive print, video master or other equivalent master copy
of the Item of Product as finally cut, main and end titled, edited, scored and assembled with sound track printed thereon in perfect synchronization with the photographic action and fit and ready for exhibition and distribution in the medium for
which the Item of Product is intended for initial exploitation; or (ii) in the case of any internet or interactive Item of Product which is only delivered to the Borrower or any Affiliate thereof, the Borrower or Affiliate has notified the
Administrative Agent that sufficient elements have been delivered to it to permit the exploitation of such internet or interactive Item of Product and has provided the Administrative Agent with details of such elements; provided, that the
Administrative Agent shall be entitled in its reasonable discretion to determine that such internet or interactive Item of Product has not been Completed; or (C) if such Item of Product was acquired from a third party, the entire fixed acquisition
price or minimum advance shall have been paid to the extent then due and there is no condition or event (other than the payment of money not yet due) the occurrence of which would reasonably be expected to result in such Credit Party losing any of
its rights in such Item of Product. 
  
 “Consolidated Net
Income” shall mean, for any period for which such amount is being determined, the consolidated net income of such Person after taxes for such period in accordance with GAAP. 
  

 10 

 “Consolidated Subsidiaries” shall mean all Subsidiaries of a Person which are required
or permitted to be consolidated with such Person for financial reporting purposes in accordance with GAAP. 
  
 “Consolidated Tangible Net Worth” shall mean, as at any date of determination, the consolidated capital, surplus and retained earnings of
the Credit Group, less the sum of all intangible assets (other than rights in Items of Product (or items which are intended to become part of Items of Product) and copyrights), all as determined in accordance with GAAP. 
  
 “Contribution Agreement” shall mean the contribution
agreement substantially in the form of Exhibit G hereto, as the same may be amended, supplemented or otherwise modified, renewed or replaced from time to time. 
  
 “Controlled Foreign Subsidiary” shall mean a Subsidiary that is a “controlled foreign
corporation” as defined in Section 957(a) of the Code or any successor provision thereto. 
  
 “Copyright Security Agreement” shall mean a Copyright Security Agreement, substantially in the form of Exhibit C-1 hereto, as the same may be amended, supplemented or otherwise modified,
renewed or replaced from time to time by delivery of a Copyright Security Agreement Supplement or otherwise. 
  
 “Copyright Security Agreement Supplement” shall mean a Copyright Security Agreement Supplement substantially in the form of Exhibit
C-2 hereto. 
  
 “Credit Group” shall mean the
Borrower, each Guarantor, the Foreign Anchor Bay Companies, and each of their respective Consolidated Subsidiaries. 
  
 “Credit Parties” shall mean the Borrower and each of the Guarantors. 
  
 “Debenture” shall mean a Deed of Debenture executed by Manga UK and the Administrative Agent, substantially
in the form of Exhibit M hereto, as the same may be amended, supplemented or otherwise modified, renewed or replaced from time to time. 
  
 “Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

  
 “Disposition” means any transaction, or
series of related transactions, pursuant to which any Credit Party or any of its Subsidiaries sells, assigns, transfers or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any Person (other than a Credit
Party or any Affiliate of any Credit Party), in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person, excluding any sales or licenses in the ordinary course of
business on ordinary business terms. 
  
 “Distribution
Agreements” shall mean (i) any and all agreements entered into by a Credit Party, pursuant to which such Credit Party has sold, leased, licensed or assigned distribution rights or other exploitation rights to any Item of Product to an
un-Affiliated Person, and (ii) any and all agreements hereafter entered into by a Credit Party pursuant to which such Credit Party sells, leases, licenses or assigns distribution rights or other exploitation rights to an Item of Product to an
un-Affiliated Person. 
  

 11 

 “Dollars” and “$” shall mean lawful money of the United States of
America. 
  
 “Eligible Assignee” shall mean (i) a
commercial bank organized under the laws of the United States of America, or any State thereof, and having total assets in excess of $1,000,000,000, (ii) a savings and loan association or savings bank organized under the laws of the United States of
America, or any State thereof, and having a net worth of at least $100,000,000, calculated in accordance with GAAP, (iii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation
and Development (“OECD”), or a political subdivision of any such country, and having total assets in excess of $1,000,000,000; provided, that such bank is acting through a branch, subsidiary or agency located in the country
in which it is organized or another country which is also a member of the OECD, (iv) the central bank of any country which is a member of the OECD, (v) a financial institution, insurance company or fund which regularly engages in making, purchasing
or otherwise investing in commercial loans and having total assets in excess of $1,000,000,000, or (vi) any other Person agreed to by the Borrower and the Administrative Agent. 
  
 “Environmental Laws” shall mean any and all federal, state, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decrees or requirements of any Governmental Authority regulating, relating to, or imposing liability or standards of conduct concerning, any Hazardous Material or environmental protection or health and
safety, as now or at any time hereafter in effect, including without limitation, the Clean Water Act also known as the Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C. § 1251 et seq., the Clean Air Act
(“CAA”), 42 U.S.C. §§ 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”), 7 U.S.C. §§ 136 et seq., the Surface Mining Control and Reclamation Act
(“SMCRA”), 30 U.S.C. §§ 1201 et seq., the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq., the Superfund Amendments and
Reauthorization Act of 1986 (“SARA”), Public Law 99-499, 100 Stat. 1613, the Emergency Planning and Community Right to Know Act (“ECPCRKA”), 42 U.S.C. § 11001 et seq., the Resource Conservation and Recovery Act
(“RCRA”), 42 U.S.C. § 6901 et seq., the Occupational Safety and Health Act as amended (“OSHA”), 29 U.S.C. § 655 and § 657, together, in each case, with any amendment thereto, and the regulations
adopted and the publications promulgated thereunder and all substitutions thereof. 
  
 “Equity Interests” shall mean shares of the capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any
Person or any warrants, options or other rights to acquire such interests. 
  
 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as heretofore and hereafter amended, as codified at 29 U.S.C. § 1001 et seq. and the regulations promulgated thereunder.

  
 “ERISA Affiliate” shall mean each Person (as
defined in Section 3(9) of ERISA) which is treated as a single employer with any Credit Party under Section 414(b), (c), (m) or (o) of the Code. 
  

 12 

 “Event of Default” shall have the meaning given to such term in Article 7 hereof.

  
 “Excluded Taxes” shall mean, with respect to
the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) any withholding tax (in the case of a Foreign Lender) or backup withholding tax (in the case of any other
Lender) that is imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Lender’s failure to comply with Section 2.13(e) or Section
2.13(f), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant
to Section 2.13(a). 
  
 “Facility” shall have the
meaning given to such term in the Preamble hereto. 
  
 “Fee Letter” shall mean that certain letter agreement dated as of March 21, 2005 between the Borrower on the one hand, and the Administrative Agent and the Arranger on the other hand, relating to the payment of certain fees
by the Borrower. 
  
 “Foreign Anchor Bay
Companies” shall mean, collectively, the Top-Tier Foreign Anchor Bay Companies and the Second-Tier Foreign Anchor Bay Companies. 
  
 “Foreign Lender” shall mean any Lender that is not a United States person, within the meaning of Section 7701(a)(30) of the Code.

  
 “Fox” shall mean Twentieth Century Fox Home
Entertainment, Inc. 
  
 “Fox Agreement” shall
mean that certain Manufacturing and Physical Distribution Services Agreement, dated as of May 1, 2004 between Fox and the Borrower. 
  
 “Fundamental Documents” shall mean, this Credit Agreement, the Notes, the Pledgeholder Agreements, the Laboratory Access Letters, the
Copyright Security Agreement, the Copyright Security Agreement Supplements, the Trademark Security Agreement, the Debenture, the Pledge Agreement, the Notices of Assignment and Irrevocable Instruction, the Contribution Agreement, the Instruments of
Assumption and Joinder, UCC financing statements and any other ancillary documentation which is required to be or is otherwise executed by any Credit Party and delivered to the Administrative Agent in connection with this Credit Agreement or any of
the documents listed above. 
  
 “GAAP” shall mean
generally accepted accounting principles in the United States of America in effect from time to time consistently applied (except for accounting changes in response to FASB releases, or other authoritative pronouncements). 
  

 13 

 “Governmental Authority” shall mean any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, or any court, in each case whether of the United States of America or any foreign jurisdiction. 
  
 “Group 1 Pledged Securities” shall mean (i) all of the issued and outstanding capital stock, partnership
interests, membership interests, beneficial interests or other Equity Interests of or in each of the Borrower, Manga UK, Manga, New Arc and each of their respective Subsidiaries that is not a Controlled Foreign Subsidiary, and (ii) shares
representing 66% (or such lesser amount as is actually owned by such Credit Party) of the issued and outstanding capital stock of each Subsidiary of each of the Borrower, Manga UK, Manga, New Arc and each of their respective Subsidiaries that is a
Controlled Foreign Subsidiary (in each case, whether now formed or formed hereafter). 
  
 “Group 2 Pledged Securities” shall mean 100% of the issued and outstanding Equity Interests of or in the Top-Tier Foreign Anchor Bay Companies. 
  
 “Guarantors” shall mean all the entities listed on
Schedule 2 hereto and all other direct and indirect Subsidiaries of the Borrower, Manga UK and New Arc formed under the laws of a jurisdiction located in the United States of America, whether now existing or hereafter acquired or
created. 
  
 “Guaranty” shall mean, as to
any Person, any direct or indirect obligation of such Person guaranteeing or intended to guarantee any Indebtedness, Capital Lease, dividend or other monetary obligation (“primary obligation”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation, or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, or (c) to purchase property, securities or services, in each case, primarily for the purpose of assuring the performance by the primary obligor of any such primary obligation; provided, however, that
the term Guaranty shall not include endorsements for collection or collections for deposit, in either case in the ordinary course of business. The amount of any Guaranty shall be deemed to be an amount equal to (x) the stated or determinable amount
of the primary obligation in respect of which such Guaranty is made (or, if the amount of such primary obligation is not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to
perform thereunder)), or (y) the stated maximum liability under such Guaranty, whichever is less. 
  
 “Hazardous Materials” shall mean any flammable materials, explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances or similar materials defined in any Environmental Law. 
  
 “IDT” shall mean IDT Corporation, a Delaware corporation. 
  
 “Indebtedness” shall mean (without double counting), at any time and with respect to any Person, (i) indebtedness of such Person for
borrowed money (whether by loan or 
  

 14 

 the issuance and sale of debt securities) or for the deferred purchase price of property or services purchased (other
than amounts constituting trade payables (payable within 120 days or such longer terms as may be customary in the industry) arising in the ordinary course of business); (ii) obligations of such Person in respect of letters of credit, acceptance
facilities, or drafts or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (iii) obligations of such Person under Capital Leases and any financing lease involving substantially the same
economic effect; (iv) deferred payment obligations of such Person resulting from the adjudication or settlement of any litigation to the extent not already reflected as a current liability on the balance sheet of such Person; and (v) indebtedness of
others of the type described in clauses (i), (ii), (iii) and (iv) hereof which such Person has (a) directly or indirectly assumed or guaranteed in connection with a Guaranty, or (b) secured by a Lien on the assets of such Person, whether or not such
Person has assumed such indebtedness; provided, that Indebtedness shall not include any non-refundable advance made to a Credit Party by a third party distributor in connection with the production, distribution or sale of any Item of Product.

  
 “Indemnified Taxes” shall mean Taxes other
than Excluded Taxes. 
  
 “Initial Date” shall
mean (i) in the case of the Administrative Agent, the date hereof, (ii) in the case of each Lender which is an original party to this Credit Agreement, the date hereof and (iii) in the case of any other Lender, the effective date of the Assignment
and Assumption pursuant to which it became a Lender. 
  
 “Initial Projections” shall mean the projections captioned “Anchor Bay, Manga, New Arc Projected Statement of Profit & Loss and Projected Statement of Cash Flow” and dated March 15, 2005. 
  
 “Instrument of Assumption and Joinder” shall mean an
Instrument of Assumption and Joinder substantially in the form of Exhibit J hereto. 
  
 “Interest Deficit” shall have the meaning given to such term in Section 2.14 hereof. 
  
 “Interest Payment Date” shall mean (i) as to any LIBOR Loan having an Interest Period of one, two or three months, the last day of such
Interest Period, (ii) as to any LIBOR Loan having an Interest Period of more than three months, the last day of such Interest Period and, in addition, each date during such Interest Period that would be the last day of an Interest Period commencing
on the same day as the first day of such Interest Period but having a duration of three months or an integral multiple thereof, and (iii) with respect to Alternate Base Rate Loans, the last day of each March, June, September and December (commencing
the last Business Day of June 30, 2005). 
  
 “Interest
Period” shall mean as to any LIBOR Loan, the period commencing on the date of such Loan or the last day of the preceding Interest Period and ending on the numerically corresponding day (or if there is no corresponding day, the last day) in
the calendar month that is one, two, three, six or, if available from all Lenders, nine or twelve months thereafter as the Borrower may elect; provided, however, that (i) if any Interest Period would end on a day which shall not be a
Business Day, such Interest Period shall be extended to the next 
  

 15 

 succeeding Business Day, unless such next succeeding Business Day would fall in the next calendar month, in which case,
such Interest Period shall end on the next preceding Business Day, (ii) no Interest Period may be selected which would end later than the Commitment Termination Date, and (iii) no Interest Period of nine or twelve months may be selected unless
available and consented to by all Lenders in their sole discretion. 
  
 “Investment” shall mean any stock, evidence of indebtedness or other securities of any Person, any loan, advance, contribution of capital, extension of credit or commitment therefor (including, without limitation, the
Guaranty of loans made to others, but excluding current trade and customer accounts receivable arising in the ordinary course of business and payable in accordance with customary trading terms in the ordinary course of business), any purchase of (i)
any security of another Person, or (ii) any business or undertaking of any Person or any commitment to make any such purchase, or any other investment. 
  
 “Issuing Bank” shall mean JPMorgan Chase Bank, N.A., in its capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 13.12. The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate. 
  
 “Item of Product” shall mean any motion picture, film or video tape or any episode thereof produced for theatrical, non-theatrical or television release or for release in any other medium, in each case, whether recorded on
film, videotape, cassette, cartridge, disc or on or by any other means, method, process or device whether now known or hereafter developed, with respect to which a Credit Party (i) is the copyright owner, or (ii) has or acquires an Equity Interest
in the copyright owner or licensee or (iii) is a licensee or otherwise has or obtains distribution rights. The term “Item of Product” shall include, without limitation, the scenario, screenplay or script upon which such Item of Product is
based, all of the properties thereof, tangible and intangible, and whether now in existence or hereafter to be made or produced, whether or not in possession of a Credit Party, and all rights of any Credit Party therein and thereto, of every kind
and character. 
  
 “JPMorgan Clearing Account”
shall mean the account of the Administrative Agent (for the benefit of itself, the Issuing Bank and the Lenders) maintained at the office of JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002,
designated as the “Anchor Bay Clearing Account”, Account No. 304 290 580. 
  
 “Laboratory” shall mean any laboratory reasonably acceptable to the Administrative Agent which is located in the United States of America, United Kingdom or Canada and is a party to a Pledgeholder
Agreement or a Laboratory Access Letter. 
  
 “Laboratory
Access Letter” shall mean a letter agreement among (i) a Laboratory holding any elements of any Item of Product to which any Credit Party has the right of access, (ii) such Credit Party and (iii) the Administrative Agent, substantially in
the form of Exhibit D hereto or a form otherwise reasonably acceptable to the Administrative Agent. 
  

 16 

 “L/C Exposure” shall mean, at any time, the amount expressed in Dollars of the aggregate
face amount of all drafts which may then or thereafter be presented by beneficiaries under all Letters of Credit then outstanding plus (without duplication) the face amount of all drafts which have been presented or accepted under all Letters of
Credit but have not yet been paid or have been paid but not reimbursed. 
  
 “L/C Sublimit” shall mean $15,000,000. 
  
 “Lender” and “Lenders” shall mean the financial institutions whose names appear at the foot hereof and any assignee of a Lender pursuant to Section 14.3 hereof, and their respective successors. 

 
 “Lending Office” shall mean, with respect to any of the
Lenders, the branch or branches (or affiliate or affiliates) from which such Lender’s LIBOR Loans or Alternate Base Rate Loans, as the case may be, are made or maintained and for the account of which all payments of principal of, and interest
on, such Lender’s LIBOR Loans or Alternate Base Rate Loans are made, as notified to the Administrative Agent from time to time. 
  
 “Letter of Credit” shall mean a letter of credit issued by the Issuing Bank pursuant to Section 2.15 hereof. 
  
 “LIBOR” shall mean, with respect to the Interest Period for
a LIBOR Loan, an interest rate per annum equal to the quotient (rounded upwards to the next 1/100 of 1%) of (A) the average of the rates at which Dollar deposits approximately equal in principal amount to the Administrative Agent’s portion of
such LIBOR Loan and for a maturity equal to the applicable Interest Period are offered to the Lending Office of the Administrative Agent in immediately available funds in the London Interbank Market for Eurodollars at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest Period divided by (B) one minus the applicable statutory reserve requirements of the Administrative Agent, expressed as a decimal (including without duplication or limitation,
basic, supplemental, marginal and emergency reserves), from time to time in effect under Regulation D or similar regulations of the Board. It is agreed that for purposes of this definition, LIBOR Loans made hereunder shall be deemed to constitute
Eurocurrency Liabilities as defined in Regulation D and to be subject to the reserve requirements of Regulation D. 
  
 “LIBOR Loan” shall mean a Loan based on LIBOR in accordance with the provisions of Article 2 hereof. 
  
 “Lien” shall mean any mortgage, copyright mortgage, pledge,
security interest, encumbrance, lien or charge of any kind whatsoever (including, without limitation, any conditional sale or other title retention agreement, any agreement to grant a security interest at a future date, any lease in the nature of
security, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code of any jurisdiction); provided, however, that this term shall not include contractual encumbrances which do not afford
security of the type described in this definition. 
  
 “Loans” shall mean the loans made hereunder in accordance with the provisions of Section 2.1(a) hereof. 
  

 17 

 “Manga” shall have the meaning given to such term in the Preamble hereto. 
  
 “Manga UK” shall mean Manga Entertainment Limited, a company
incorporated under the laws of England and Wales. 
  
 “Margin Stock” shall be as defined in Regulation U of the Board. 
  
 “Material Adverse Effect” shall mean any change or effect that (a) has a materially adverse effect on the business, assets, properties, operations or financial condition of the Credit Parties or the
Credit Group, in each case taken as a whole, (other than general economic conditions and events or circumstances which are generally applicable to the industries in which the Credit Parties or any member of the Credit Group operate), (b) materially
impairs the legal right, power or authority of TLL or any Credit Party to perform its respective obligations under the Fundamental Documents to which it is a party or (c) materially impairs the validity or enforceability of, or materially impairs
the rights, remedies or benefits available to the Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders under, the Fundamental Documents; provided, however, that an event or condition shall not cause a
“Material Adverse Event” under clause (c) above if such event or condition was caused solely by the Administrative Agent, the Issuing Bank or any Lender. 
  
 “Maturity Date” shall mean the earlier of (i) April 21, 2010, and (ii) such other date as the Loans shall
be due and payable in accordance with Article 7 hereof. 
  
 “Maximum Allowable Outstanding Amount” shall mean the maximum Outstanding Amount permitted under the Facility in accordance with Section 6.18. 
  
 “Moody’s” means Moody’s Investors Service, Inc. 
  
 “Multiemployer Plan” shall mean a plan described in Section
4001(a)(3) of ERISA. 
  
 “New Arc” shall have the
meaning given to such term in the Preamble hereto. 
  
 “Note” or “Notes” shall have the meaning given to such term in Section 2.3 hereof. 
  
 “Notice of Assignment and Irrevocable Instructions” shall mean a Notice of Assignment and Irrevocable Instructions substantially in the
form of Exhibit K hereto or in such other form as shall be acceptable to the Administrative Agent, including, without limitation, the inclusion of such notice and instructions in a Distribution Agreement. 
  
 “Obligations” shall mean the obligation of the Borrower to
make due and punctual payment of (i) principal of and interest on the Loans, reimbursement obligations in respect of Letters of Credit, the Commitment Fees, costs and attorneys’ fees and all other monetary obligations of the Borrower to the
Administrative Agent, the Issuing Bank or any Lender under this Credit Agreement, the Notes, any other Fundamental Document or any fee letter in respect of the Facility, (ii) all amounts payable by the Borrower to any Lender under any Swap
Agreement; provided, that the Administrative Agent shall have received written notice 
  

 18 

 thereof within ten (10) Business Days after execution of such Swap Agreement and (iii) amounts payable to JPMorgan Chase
Bank, N.A. in connection with any bank account maintained by the Borrower or any other Credit Party at JPMorgan Chase Bank, N.A. or any other banking services provided to the Borrower or any other Credit Party by JPMorgan Chase Bank, N.A.

  
 “Operating Cash Flow” shall mean, at any date
at which the amount thereof is to be determined, an amount equal to the sum of “net income” plus “working capital changes” plus “non cash adjustments” (for the avoidance of doubt, excluding
investments in royalties, masters and film productions), as each such item is calculated in the Initial Projections, and with each of the line items appearing therein. 
  
 “Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement. 
  
 “Outstanding Amount” shall mean, at any time, the aggregate amount of all Loans and L/C Exposure then
outstanding. 
  
 “Parent” shall mean IDT
Entertainment, Inc., a Delaware corporation. 
  
 “PBGC” shall mean the Pension Benefit Guaranty Corporation or any successor thereto. 
  
 “Percentage” shall mean with respect to any Lender, the percentage of the Total Commitment represented by such Lender’s Commitment.

  
 “Permitted Encumbrances” shall mean Liens
permitted under Section 6.2 hereof. 
  
 “Person”
shall mean any natural person, corporation, division of a corporation, limited liability company, partnership, trust, joint venture, association, company, estate, unincorporated organization or government or any agency or political subdivision
thereof. 
  
 “Physical Materials” shall have the
meaning given to such term in paragraph (iv) of the definition of “Collateral” herein. 
  
 “Plan” shall mean an employee benefit plan within the meaning of Section 3(3) of ERISA, other than a Multiemployer Plan, maintained or
contributed to by any Credit Party, or any ERISA Affiliate, or any other plan covered by Title IV of ERISA that covers employees of the Credit Parties. 
  
 “Pledge Agreement” shall mean a Pledge Agreement executed by TLL and the Administrative Agent, substantially in the form of Exhibit
N hereto, as the same may be amended, supplemented or otherwise modified, renewed or replaced from time to time. 
  
 “Pledged Collateral” shall mean the Pledged Securities and any proceeds (as defined in Section 9-102(64) of the UCC) including cash
proceeds (as defined in Section 9-102(9) of the UCC) of the Pledged Securities. 
  

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 “Pledged Securities” shall mean the Group 1 Pledged Securities and the Group 2 Pledged
Securities. 
  
 “Pledgeholder Agreement” shall
mean a laboratory pledgeholder agreement among a Credit Party (or Credit Parties), the Administrative Agent, certain distributors (as applicable) and one or more Laboratories, substantially in the form of Exhibit E-1 or Exhibit E-2
hereto, or in such other form and with such additional parties as shall be reasonably acceptable to the Administrative Agent. 
  
 “Pledgors” shall mean the Parent and those Credit Parties that own any of the Group 1 Pledged Securities. 
  
 “Pro Rata Share” shall mean with respect to any Obligation
or other amount, each Lender’s pro rata share of such Obligation or other amount determined in accordance with such Lender’s Percentage. 
  
 “Production Account(s)” shall mean individually or collectively, as the context so requires, each demand deposit account(s) established
by a Credit Party at a commercial bank located in the United States of America or otherwise acceptable to the Administrative Agent, for the sole purpose of paying the production or acquisition costs of a particular Item of Product. 
  
 “Quiet Enjoyment” shall be as defined in Section 8.13
hereof. 
  
 “Regulation D” shall mean Regulation
D of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. 
  
 “Reportable Event” shall mean any reportable event as defined in Section 4043(c) of ERISA, other than a reportable event as to which
provision for 30-day notice to the PBGC has been waived under applicable regulations. 
  
 “Required Lenders” shall mean Lenders holding at least 66 2/3% of the Total Commitment. 
  
 “Restricted Payment” shall mean (i) any distribution, cash dividend or other direct or indirect payment on account of shares of any
Equity Interest in any Credit Party, (ii) any redemption or other acquisition, re-acquisition or retirement by a Credit Party of any Equity Interests in any Credit Party or any Affiliate thereof, now or hereafter outstanding, (iii) any payment made
by any Credit Party to retire, or obtain the surrender of, any outstanding warrants, puts or options or other rights to purchase or otherwise acquire any Equity Interest in any Credit Party or any Affiliate thereof, now or hereafter outstanding,
(iv) any payment by a Credit Party of principal of, premium, if any, or interest on, or any redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Subordinated Debt, and (v) any payment under any Synthetic
Purchase Agreement. 
  
 “S&P” means Standard
& Poor’s. 
  
 “Schedule of Commitments”
shall mean the schedule of Commitments of the Lenders set forth on Schedule 1 hereto. 
  

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 “Second-Tier Foreign Anchor Bay Companies” shall mean each of (i) Digital Entertainment
Limited, a company organized under the laws of England and Wales, and (ii) Anchor Bay Entertainment Canada, Limited, a company organized under the federal laws of Canada. 
  
 “Subordinated Debt” shall mean all Indebtedness of any of the Credit Parties that is subordinated to the
Obligations pursuant to written agreements, containing interest rates, payment terms, maturities, amortization schedules, covenants, defaults, remedies, subordination provisions and other material terms in form and substance reasonably satisfactory
to the Administrative Agent in accordance with Section 6.1(h) hereof. 
  
 “Subsidiary” shall mean with respect to any Person, any corporation, association, joint venture, partnership or other business entity (whether now existing or hereafter organized) of which at least a majority of the voting
stock or other ownership interests having ordinary voting power for the election of directors (or the equivalent) is, at the time as of which any determination is being made, owned or controlled by such Person or one or more subsidiaries of such
Person or by such Person and one or more subsidiaries of such Person. 
  
 “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities,
equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided, that no phantom
stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of any Credit Party shall be a Swap Agreement. 
  
 “Synthetic Purchase Agreement” means any Swap Agreement or
similar agreement or combination of agreements pursuant to which any Credit Party is or may become obligated to make (i) any payment in connection with a purchase by any third party from a Person other than a Credit Party of any Equity Interest in
any Credit Party or any Subordinated Debt, or (ii) any payment (other than on account of a permitted purchase by it of any Equity Interest in any Credit Party or any Subordinated Debt) the amount of which is determined by reference to the price or
value at any time of any Equity Interest in any Credit Party or any Subordinated Debt; provided, that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers,
employees or consultants of a Credit Party or its Subsidiaries shall be a Synthetic Purchase Agreement. 
  
 “Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority. 
  
 “TLL” shall mean TLL
Dutch Holdings, B.V., a Netherlands private limited company. 
  
 “Top-Tier Foreign Anchor Bay Companies” shall mean each of (i) Anchor Bay Entertainment UK Limited, a company organized under the laws of England and Wales, (ii) Anchor Bay International Limited, a company organized under
the laws of England and Wales and (iii) North Coast Entertainment, Company, a Nova Scotia company. 
  

 21 

 “Total Commitments” shall mean, at any time, the aggregate amount of the Commitments
then in effect of all of the Lenders, as such aggregate amount shall be adjusted upwards or downwards from time to time in accordance with the terms of this Credit Agreement (including, without limitation, pursuant to Section 2.6 hereof).

  
 “Trademark Security Agreement” shall mean the
Trademark Security Agreement substantially in the form of Exhibit F hereto to be executed by the Borrower and the Guarantors, as such agreement may be amended, supplemented or otherwise modified, renewed or replaced from time to time.

  
 “Type”, when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Alternate Base Rate or to LIBOR. 
  
 “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York on the date of execution
of this Credit Agreement (as such Uniform Commercial Code is amended from time to time). 
  
 “USA Patriot Act” shall mean the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)). 
  
 2. THE LOANS 
  
 SECTION 2.1. Loans. 
  
 (a) Each Lender, severally and not jointly, agrees, upon the terms and subject to the conditions hereof, to make loans (the “Loans”) to
the Borrower, on any Business Day and from time to time from the Closing Date to but excluding the Commitment Termination Date, each in an aggregate principal amount which when added to the aggregate principal amount of all Loans then outstanding to
the Borrower from such Lender plus such Lender’s Pro Rata Share of the then current L/C Exposure, does not exceed such Lender’s Commitment (after giving effect to all Loans repaid and all reimbursements of drawings under Letters of
Credit made concurrently with the making of any Loans). 
  
 (b)
Subject to Section 2.2, the Loans shall be made at such times as the Borrower shall request. 
  
 (c) Subject to the terms and conditions of this Credit Agreement, the Borrower may borrow, repay and re-borrow amounts constituting the Total Commitments. 
  
 (d) Notwithstanding anything to the contrary above, a Lender shall not be obligated to make any additional Loans if, as a
result thereof, the aggregate principal amount of all Loans then outstanding plus the then current L/C Exposure, exceeds the Total Commitments then in effect. 
  

 22 

 SECTION 2.2. Making of Loans. 
  
 (a) Each Loan shall be an Alternate Base Rate Loan or a LIBOR Loan, as the Borrower may request, subject to and in
accordance with this Section 2.2. 
  
 (b) The Borrower hereby
requests that, subject to the satisfaction of all applicable conditions hereof, the Lenders make the Loans on the Closing Date in the principal amount set forth on the initial Borrowing Certificate. 
  
 (c) The Borrower shall give the Administrative Agent at least three Business
Days’ prior written, facsimile or telephonic (promptly confirmed in writing) notice of each Borrowing which is to consist of LIBOR Loans, and at least one Business Day’s prior written, facsimile or telephonic (promptly confirmed in
writing) notice of each Borrowing which is to consist of Alternate Base Rate Loans. Each such notice in order to be effective must be received by the Administrative Agent not later than 2:00 p.m., New York City time, on the day required and shall
specify the date (which shall be a Business Day) on which such Borrowing is to be made and the aggregate principal amount of the requested Borrowings. Each such notice shall be irrevocable and shall specify whether the Borrowing then being requested
is to consist of Alternate Base Rate Loans or LIBOR Loans and in the case of LIBOR Loans, the Interest Period or Interest Periods with respect thereto. If no election of an Interest Period is specified in such notice in the case of a Borrowing
consisting of LIBOR Loans, such notice shall be deemed to be a request for an Interest Period of one month. If no election is made as to the type of Loan, such notice shall be deemed a request for a Borrowing consisting of Alternate Base Rate Loans.
No Borrowing shall consist of LIBOR Loans if after giving effect thereto an aggregate of more than six separate LIBOR Loans would be outstanding hereunder with respect to each Lender (determined in accordance with Section 2.8(c) hereof). 

 
 (d) The Administrative Agent shall promptly notify each Lender of its
proportionate share of each Borrowing under this Section 2.2, the date of such Borrowing, the Type of Loans being requested and the Interest Period or Interest Periods applicable thereto. On the borrowing date specified in such notice, each Lender
shall make its share of the Borrowing available at the offices of JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention: Pearl Esparza, for credit to the JPMorgan Clearing Account no
later than 1:00 p.m. New York City time in Federal or other immediately available funds. Upon receipt of the funds to be made available by the Lenders to fund any Borrowing hereunder, the Administrative Agent shall disburse such funds by depositing
the requested amounts into an account maintained with the Administrative Agent by the Borrower. 
  
 (e) Each Lender may at its option fulfill its obligation to make LIBOR Loans by causing a foreign branch or affiliate to fund such LIBOR Loans;
provided, that any exercise of such option shall not affect the obligation of the Borrower to repay Loans in accordance with the terms hereof or increase the costs to the Borrower payable hereunder in respect of LIBOR Loans. Subject to the
other provisions of this Section 2.2, Loans of more than one Type may be outstanding at the same time. 
  
 (f) Each Loan requested hereunder on any date shall be made by each Lender in accordance with its respective Percentage. 
  

 23 

 (g) On the date requested by the Borrower for the funding of each Loan, the Administrative Agent shall be
authorized (but not obligated) to advance, for the account of each of the Lenders, the amount of the Loan to be made by it in accordance with its Percentage hereunder. Each of the Lenders hereby authorizes and requests the Administrative Agent to
advance for its account, pursuant to the terms hereof, the amount of the Loan to be made by it, and each of the Lenders agrees forthwith to reimburse the Administrative Agent in immediately available funds for the amount so advanced on its behalf by
the Administrative Agent. If any such reimbursement is not made in immediately available funds on the same day on which the Administrative Agent shall have made any such amount available on behalf of any Lender, such Lender shall pay interest to the
Administrative Agent equal to the Administrative Agent’s cost of obtaining overnight funds in the New York Federal Funds Market for the three Business Days following the time when the Lender fails to make the required reimbursement, and
thereafter at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin for Alternate Base Rate Loans. If and to the extent that any such reimbursement shall not have been made by any such Lender to the Administrative Agent, the
Borrower agrees to repay to the Administrative Agent forthwith on demand a corresponding amount with interest thereon for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative
Agent at the Alternate Base Rate plus the Applicable Margin for Alternate Base Rate Loans. 
  
 (h) The amount of any Borrowing of new funds shall be in an aggregate principal amount of $250,000 (or such lesser amount as shall equal the available but unused portion of the Commitments or the amount of any
Borrowing required to fund drawings under a Letter of Credit) or such greater amount which is an integral multiple of $100,000. 
  
 (i) Notwithstanding the provisions of clause (c) above and/or the absence of a request from the Borrower that the Lenders make a Loan, the Required
Lenders may direct the Lenders to make Loans if an Event of Default shall have occurred and be continuing, with respect to any Item of Product being produced by a Credit Party and pay the proceeds thereof directly to Persons providing services in
connection with the production, delivery and distribution of such Item of Product so as to ensure Completion of such Item of Product and/or the collection of accounts receivable. 
  
 (j) The Borrower shall not be permitted to make Borrowings hereunder more than once per week. 
  
 SECTION 2.3. Notes. 
  
 (a) The Loans made by each Lender hereunder shall be evidenced by a single
revolving credit promissory note substantially in the form of Exhibit A hereto (each a “Note” and collectively the “Notes”) in the face amount of each such Lender’s Commitment, payable to the order of
each such Lender, duly executed by the Borrower and dated as of the Closing Date. 
  
 (b) Each of the Notes shall bear interest on the outstanding principal balance thereof as set forth in Section 2.4 hereof. Each Lender and the Administrative Agent on its behalf is hereby authorized by the Borrower,
but not obligated, to enter the amount of each Loan and the amount of each payment or prepayment of principal or interest thereon in the appropriate 
  

 24 

 spaces on the reverse of or on an attachment to the Notes; provided, however, that the failure of any
Lender or the Administrative Agent to set forth such Loans, principal payments or other information shall not in any manner affect the obligations of the Borrower to repay such Loans. 
  
 SECTION 2.4. Interest on Notes. 
  
 (a) In the case of a LIBOR Loan, interest shall be payable at a rate per annum (computed on the basis of the actual number
of days elapsed over a year of 360 days) equal to LIBOR plus the Applicable Margin. Interest shall be payable on each LIBOR Loan on each applicable Interest Payment Date, on the Maturity Date and on the date of a conversion of such LIBOR Loan to an
Alternate Base Rate Loan. The Administrative Agent shall determine the applicable LIBOR for each Interest Period as soon as practicable on the date when such determination is to be made in respect of such Interest Period and shall notify the
Borrower and the Lenders of the applicable interest rate so determined. Such determination shall be conclusive absent manifest error. 
  
 (b) In the case of an Alternate Base Rate Loan, interest shall be payable at a rate per annum (computed on the basis of the actual number of days elapsed
over a year of 360 days for Base CD Rate and Federal Funds Effective Rate loans, and over a year of 365/366 days for Prime Rate loans) equal to the Alternate Base Rate plus the Applicable Margin. Interest shall be payable in arrears on each
Alternate Base Rate Loan on each applicable Interest Payment Date and on the Maturity Date. 
  
 (c) Anything in this Credit Agreement or the Notes to the contrary notwithstanding, the interest rate on the Loans or with respect to any drawing under a Letter of Credit shall in no event be in excess of the maximum
permitted by Applicable Law. 
  
 SECTION 2.5. Commitment Fees
and Other Fees. 
  
 (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender on the last Business Day of each March, June, September and December in each year (commencing on the last Business Day of June, 2005) prior to the Commitment Termination Date and on the Commitment
Termination Date, an aggregate fee (the “Commitment Fees”) of 0.5 of 1% per annum, computed on the basis of the actual number of days elapsed during the preceding period or quarter over a year of 365/366 days, as the case may be, on
the average daily amount by which such Lender’s Commitment, as such Commitment may be reduced in accordance with the provisions of this Credit Agreement, exceeds the sum of the principal balance of such Lender’s outstanding Loans plus such
Lender’s Pro Rata Share of all L/C Exposure during the preceding period or quarter. 
  
 (b) The Commitment Fees shall commence to accrue from the Closing Date. 
  
 (c) The Borrower agrees to pay to the Administrative Agent on the Closing Date any and all other fees that are then due and payable pursuant hereto or
pursuant to the Fee Letter. 
  

 25 

 SECTION 2.6. Optional Termination or Reduction of Commitments. 
  
 (a) Upon at least three Business Days’ prior written, facsimile or
telephonic notice (provided, that such telephonic notice is immediately followed by written or facsimile confirmation) to the Administrative Agent, the Borrower may at any time in whole permanently terminate, or from time to time in part
permanently reduce, the aggregate Commitments. In the case of a partial reduction, each such reduction of the aggregate Commitments shall be in a minimum aggregate principal amount of $500,000 or an integral multiple thereof; provided,
however, that the Commitments may not be reduced by more than the amount of the then unused Commitments and may not be reduced to an amount less than the aggregate principal amount of the Loans outstanding plus the then current L/C Exposure.
Any partial reduction of the Commitments shall be made among the Lenders in accordance with their respective Percentages. 
  
 (b) Simultaneously with each such termination or reduction of the Commitments, the Borrower shall pay to the Administrative Agent for the benefit of each
Lender all accrued and unpaid Commitment Fees on the amount of the Commitments so terminated or reduced through the date of such termination or reduction. 
  
 SECTION 2.7. Default Interest; Alternate Rate of Interest. 
  
 (a) If the Borrower shall default in the payment when due of the principal of, or interest on any Loan becoming due
hereunder, whether at stated maturity, by acceleration or otherwise, or the payment of any other amount becoming due hereunder after written notification from the Administrative Agent to the Borrower of such amount, the Borrower shall on demand in
writing from time to time pay interest, to the extent permitted by Applicable Law, on all Loans and overdue amounts outstanding from the due date thereof up to the date of actual payment of such defaulted amount (after as well as before judgment)
(i) for the remainder of the then current Interest Period for each LIBOR Loan, at 2% in excess of the rate then in effect for each such LIBOR Loan, and (ii) for all periods subsequent to the then current Interest Period for each LIBOR Loan, for all
Alternate Base Rate Loans and for all other overdue amounts hereunder, at 2% in excess of the rate then in effect for Alternate Base Rate Loans. 
  
 (b) In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a LIBOR Loan, (i) the
Administrative Agent shall have received notice from any Lender of such Lender’s determination (which determination, absent manifest error, shall be conclusive) that Dollar deposits in the amount of the principal amount of such LIBOR Loan are
not generally available in the London Interbank Market or that the rate at which such Dollar deposits are being offered will not adequately and fairly reflect the cost to such Lender of making or maintaining the principal amount of such LIBOR Loan
during such Interest Period, or (ii) the Administrative Agent shall have determined that reasonable means do not exist for ascertaining the applicable LIBOR, the Administrative Agent shall, as soon as practicable thereafter, give written or
facsimile notice of such determination to the Borrower and the Lenders, and any request by the Borrower for a LIBOR Loan (or conversion to or continuation as a LIBOR Loan pursuant to Section 2.8 hereof), made after receipt of such notice and until
the circumstances giving rise to such notice no longer exist, shall be deemed to be a request for an Alternate Base Rate Loan; provided, however, that in the circumstances described in clause (i) above such deemed request shall only
apply to the affected Lender’s portion thereof. After such notice shall have been given and until the circumstances giving rise to such notice no longer exist, each request (or portion thereof, as the case may be) for a LIBOR Loan, to the
extent such request relates to such affected Lender’s portion shall be deemed to be a request for an Alternate Base Rate Loan. 
  

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 SECTION 2.8. Continuation and Conversion of Loans. The Borrower shall have the right, at any time,
(i) to convert any LIBOR Loan or portion thereof to an Alternate Base Rate Loan or to continue such LIBOR Loan or a portion thereof for a successive Interest Period, or (ii) to convert any Alternate Base Rate Loan or a portion thereof to a LIBOR
Loan, subject to the following: 
  
 (a) the Borrower shall give
the Administrative Agent prior written, facsimile or telephonic (promptly confirmed in writing) notice of each continuation or conversion hereunder of at least three Business Days for continuation as or conversion to a LIBOR Loan; such notice shall
be irrevocable and to be effective, must be received by the Administrative Agent on the day required not later than 2:00 p.m., New York City time; 
  
 (b) unless the Required Lenders otherwise consent, no Event of Default or Default shall have occurred and be continuing at the time of any conversion to a
LIBOR Loan or continuation of any such LIBOR Loan into a subsequent Interest Period; 
  
 (c) no Alternate Base Rate Loan may be converted to a LIBOR Loan and no LIBOR Loan may be continued as a LIBOR Loan if, after such conversion or continuance, and after giving effect to any concurrent prepayment of
Loans, an aggregate of more than six separate LIBOR Loans would be outstanding hereunder with respect to each Lender (for purposes of determining the number of such Loans outstanding, Loans with different Interest Periods shall be counted as
different Loans even if made on the same date); 
  
 (d) if fewer
than all Loans at the time outstanding shall be continued or converted, such continuation or conversion shall be made pro rata among the Lenders in accordance with the respective Percentage of the principal amount of such Loans held by the Lenders
immediately prior to such continuation or conversion; 
  
 (e) the
aggregate principal amount of Loans continued as or converted to LIBOR Loans as part of the same Borrowing shall be $250,000 or such greater amount which is an integral multiple of $100,000; 
  
 (f) accrued interest on the LIBOR Loans (or portion thereof) being continued
shall be paid by the Borrower at the time of continuation; 
  
 (g)
the Interest Period with respect to a new LIBOR Loan effected by a continuation or conversion shall commence on the date of such continuation or conversion; 
  
 (h) if a LIBOR Loan is converted to another type of Loan prior to the last day of the Interest Period with respect thereto, the amounts required by
Section 2.9(b) shall be paid upon such conversion; 
  
 (i) each
request for a continuation as or conversion to a LIBOR Loan which fails to state an applicable Interest Period shall be deemed to be a request for an Interest Period of one month; and 
  

 27 

 (j) in the event that the Borrower shall not give notice to continue or convert any LIBOR Loan as
provided above, such Loan (unless repaid) shall automatically be converted to an Alternate Base Rate Loan at the expiration of the then current Interest Period. 
  

The Administrative Agent shall, after it receives notice from the Borrower, promptly give the Lenders notice of any continuation or conversion. 
  
 SECTION 2.9. Voluntary and Mandatory Prepayment of Loans; Reimbursement of
Lenders. 
  
 (a) Subject to the terms of paragraph (b) of
this Section 2.9, the Borrower shall have the right at its option at any time and from time to time to prepay without premium or penalty (i) any Alternate Base Rate Loan, in whole or in part, upon at least one Business Day’s prior written,
telephonic (promptly confirmed in writing) or facsimile notice to the Administrative Agent, in the principal amount of $250,000 or such greater amount which is an integral multiple of $100,000 if prepaid in part, or the remaining balance of such
Loan if prepaid in full, and (ii) any LIBOR Loan, in whole or in part, upon at least three Business Days’ prior written, telephonic (promptly confirmed in writing) or facsimile notice, in the principal amount of $250,000 or such greater amount
which is an integral multiple of $100,000 if prepaid in part, or the remaining balance of such Loan if prepaid in full. Each notice of prepayment shall specify the prepayment date, each Loan to be prepaid and the principal amount thereof, shall be
irrevocable and shall commit the Borrower to prepay such Loan in the amount and on the date stated therein. All prepayments under this Section 2.9(a) shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to (but
not including) the date of prepayment. 
  
 (b) The Borrower shall
reimburse each Lender on demand for any loss (excluding the loss of the Applicable Margin) incurred or to be incurred by any such Lender in the reemployment of the funds released (i) by any prepayment (for any reason) of any LIBOR Loan if such Loan
is repaid prior to the last day of the Interest Period for such Loan, or (ii) in the event that after the Borrower delivers a notice of borrowing under Section 2.2(c) or Section 2.8(a) in respect of LIBOR Loans, such Loan is not made, converted to
or continued as a LIBOR Loan on the first day of the Interest Period specified in such notice of borrowing for any reason other than (A) a suspension or limitation under Section 2.7(b) of the right of the Borrower to select a LIBOR Loan, (B) a
breach by any such Lender of its obligation to fund such borrowing when it is otherwise required to do so hereunder, or (C) a repayment resulting from a conversion required by a Lender pursuant to Section 2.11(a). Such loss shall be the amount as
reasonably determined by such Lender as the excess, if any, of (I) the amount of interest which would have accrued to such Lender on the amount so paid or not borrowed, continued or converted at a rate of interest equal to the interest rate
applicable to such Loan pursuant to Section 2.4, for the period from the date of such payment or failure to borrow, continue or convert to the last day (x) in the case of a payment prior to the last day of the Interest Period for such Loan, of the
then current Interest Period for such Loan, or (y) in the case of such failure to borrow, continue or convert, of the Interest Period for such Loan which would have commenced on the date of such failure to borrow, continue or convert, over (II) the
amount realized or to be realized by such Lender in reemploying the funds not advanced or the funds received in prepayment or realized from the Loan not so continued or converted during the period referred to above. Each Lender 
  

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 shall deliver to the Borrower from time to time one or more certificates setting forth the amount of such loss (and in
reasonable detail the manner of computation thereof) as determined by such Lender, which certificates shall be conclusive absent manifest error. The Borrower shall pay such Lender the amounts shown on such certificate within thirty days of the
Borrower’s receipt of such certificate. 
  
 (c) In the event
the Borrower fails to prepay any Loan on the date specified in any prepayment notice delivered pursuant to Section 2.9(a), the Borrower shall pay to the Administrative Agent for the account of the applicable Lender any amounts required to compensate
such Lender for any actual loss incurred by such Lender as a result of such failure to prepay, including, without limitation, any loss, cost or expenses incurred by reason of the acquisition of deposits or other funds by such Lender to fulfill
deposit obligations incurred in anticipation of such prepayment. Each Lender shall deliver to the Borrower and the Administrative Agent from time to time one or more certificates setting forth the amount of such loss (and in reasonable detail the
manner of computation thereof) as determined by such Lender, which certificates shall be conclusive absent manifest error. The Borrower shall pay such Lender the amounts shown on such certificate within ten Business Days of the Borrower’s
receipt of such certificate. 
  
 (d) The Obligations shall be paid
in full on the Maturity Date. 
  
 (e) If at any time the sum
of the Loans outstanding plus the then current L/C Exposure exceeds the Maximum Allowable Outstanding Amount, the Borrower shall within five Business Days prepay the Loans outstanding in an amount necessary to eliminate such excess.

  
 (f) The Borrower shall prepay the Obligations in an amount
equal to (i) 100% of the net cash proceeds from Dispositions, (ii) 100% of the net proceeds from issuance of any Indebtedness for borrowed money and (iii) 75% of the net proceeds from the issuance of any Equity Interests in any member of the Credit
Group after the date hereof excluding, however, any net proceeds from the issuance of any Equity Interest in the Borrower, Manga UK or New Arc to the Parent. 
  
 (g) Simultaneously with each termination and/or optional reduction of the Commitments pursuant to Section 2.6, the Borrower shall pay to the
Administrative Agent for the benefit of the Lenders an amount equal to the excess of (i) the sum of aggregate outstanding principal amount of the Loans plus the L/C Exposure over (ii) the reduced Commitments. 
  
 (h) Unless otherwise designated in writing by the Borrower, all prepayments
shall be applied to the applicable principal payment set forth in this Section 2.9, first to that amount of such applicable principal payment then maintained as Alternate Base Rate Loans by the Borrower, and then, to that amount of such applicable
principal payment maintained as LIBOR Loans by the Borrower in order of the scheduled expiry of Interest Periods with respect thereto. 
  
 (i) All prepayments shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to but not including the date of prepayment.

  

 29 

 (j) If on any day on which the Loans would otherwise be required to be prepaid but for the operation of
this Section 2.9(j) (each a “Prepayment Date”), the amount of such required prepayment exceeds the then outstanding aggregate principal amount of the Loans that constitute Alternate Base Rate Loans, and no Default or Event of
Default is then continuing, then on such Prepayment Date the Borrower may, at its option, deposit Dollars into the Cash Collateral Account in an amount equal to such excess. If the Borrower makes such deposit then (i) only the outstanding Alternate
Base Rate Loans shall be required to be prepaid on such Prepayment Date and (ii) on the last day of each Interest Period with respect to any LIBOR Loan in effect after such Prepayment Date, the Administrative Agent is irrevocably authorized and
directed to apply funds from the Cash Collateral Account, if any, (and liquidate investments held in such cash collateral account as necessary) to prepay LIBOR Loans for which the Interest Period is then ending until the aggregate of such
prepayments equals the prepayment which would have been required on such Prepayment Date but for the operation of this Section 2.9(j). 
  
 (k) Except as otherwise specifically provided in this Article 2, should any payment or prepayment of principal of or interest on the Notes or any other
amount due hereunder, become due and payable on a day other than a Business Day, the due date of such payment or prepayment shall be extended to the next succeeding Business Day and, in the case of a payment or prepayment of principal, interest
shall be payable thereon at the rate herein specified during such extension. 
  
 SECTION 2.10. Increased Costs. 
  

	 	(a)	If any Change in Law shall: 

  

	 	(i)	impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender
(except any such reserve requirement reflected in the LIBOR) or the Issuing Bank; or 

  

	 	(ii)	impose on any Lender or the Issuing Bank or the London Interbank Market any other condition affecting this Agreement or LIBOR Loans made by such Lender or any Letter of Credit or
participation therein; 

  
 and the result of any of the foregoing
shall be to increase the cost to such Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered; provided, however, that the Borrower shall not be obligated to pay such
compensation to any Lender or the Issuing Bank, as applicable, on account of any Change in Law affecting or altering the Excluded Taxes. 
  
 (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate
of return on such 
  

 30 

 Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s
holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or
the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered. 
  
 (c) A certificate of a Lender or the Issuing Bank setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or the
Issuing Bank or its holding company, as the case may be, the changes as a result of which such amounts are due and the manner of computing such amounts, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 Business Days after receipt thereof. Notwithstanding any other provision
of this Section 2.10, neither the Issuing Bank nor any Lender shall demand or be entitled to compensation for any increased cost or reduction referred to in paragraph (a) or (b) of this Section if it shall not be the general policy or practice of
the Issuing Bank or such Lender to demand such compensation in similar circumstances. 
  
 (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such
compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the
Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided
further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof. 
  
 (e) The Issuing Bank and each Lender agrees that with reasonable promptness
after it becomes aware of the occurrence of an event or the existence of a condition that (i) would cause it to incur any increased cost hereunder or render it unable to perform its agreements hereunder for the reasons specifically set forth in
Section 2.2(d), Section 2.7(b), this Section 2.10 or Section 2.11 or (ii) would require the Borrower to pay an increased amount under Section 2.7(b), this Section 2.10 or Section 2.13, it will use reasonable efforts to notify the Borrower of such
event or condition and, to the extent not inconsistent with the Issuing Bank’s or such Lender’s internal policies, will use its reasonable efforts to make, fund or maintain the affected Loans of such Lender, or if applicable, to issue,
make, maintain or participate in Letters of Credit as required under Section 2.15, through another Lending Office of the Issuing Bank or such Lender if as a result thereof the additional monies which would otherwise be required to be paid or the
reduction of amounts receivable by the Issuing Bank or such Lender thereunder in respect of such Loans or Letters of Credit or participations therein would be materially reduced, or such 
  

 31 

 inability to perform would cease to exist, or the increased costs which would otherwise be required to be paid in respect
of such Loans or Letters of Credit or participations therein pursuant to Section 2.2(d), Section 2.7(b), this Section 2.10 or Section 2.13 would be materially reduced or taxes or other amounts otherwise payable under Section 2.7(b), this Section
2.10 or Section 2.13 would be materially reduced, and if, as determined by the Issuing Bank or such Lender, in its discretion, the making, funding or maintaining of such Loans, or the issuance, making, maintaining or participation in such Letters of
Credit, through such other Lending Office would not otherwise materially adversely affect such Loans or Letters of Credit, or the Issuing Bank or such Lender. Notwithstanding the foregoing, a failure on the part of any Lender to provide notice or
take any other action pursuant to this Section 2.10(e) shall not affect the Borrower’s obligation to make any payments or deductions required by this Article 2. 
  
 SECTION 2.11. Change in Legality. 
  
 (a) Notwithstanding anything to the contrary contained elsewhere in this Credit Agreement, if any change after the date
hereof in Applicable Law, guideline or order, or in the interpretation thereof by any Governmental Authority charged with the administration thereof, shall make it unlawful for any Lender to make or maintain any LIBOR Loan or to give effect to its
obligations as contemplated hereby with respect to a LIBOR Loan, then, by written notice to the Borrower and the Administrative Agent, such Lender may (i) declare that LIBOR Loans will not thereafter be made by such Lender hereunder for as long as
such condition may be continuing, and/or (ii) require that, subject to Section 2.9(b), all outstanding LIBOR Loans made by it be converted to Alternate Base Rate Loans, whereupon all of such LIBOR Loans shall automatically be converted to Alternate
Base Rate Loans, as of the effective date of such notice as provided in paragraph (b) below. Such Lender’s pro rata portion of any subsequent LIBOR Loan shall, instead, be an Alternate Base Rate Loan unless such declaration is subsequently
withdrawn. 
  
 (b) A notice to the Borrower by any Lender pursuant
to paragraph (a) above shall be effective for purposes of clause (ii) thereof, if lawful, on the last day of the current Interest Period for each outstanding LIBOR Loan; and in all other cases, on the date of receipt of such notice by the Borrower.

  
 SECTION 2.12. Manner of Payments. All payments of
principal and interest by the Borrower in respect of any Loans to it shall be pro rata among the Lenders holding such Loans in accordance with the then outstanding principal amounts of such Loans held by them and all Borrowings of any Loans by the
Borrower hereunder shall be made pro rata among the Lenders in accordance with their Commitments. All payments by the Borrower hereunder and under the Notes shall be made in Dollars in Federal or other immediately available funds at the office of
JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention: Pearl Esparza, for credit to the JPMorgan Clearing Account no later than 2:00 p.m., New York City time, on the date on which such
payment shall be due. Interest in respect of any Loan hereunder shall accrue from and including the date of such Loan to but excluding the date on which such Loan is paid or converted to a Loan of a different Type. 
  

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 SECTION 2.13. Taxes. 
  
 (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law. 
  
 (b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with Applicable Law. 
  
 (c)
The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10 Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender
or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest
error. 
  
 (d) As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. 
  
 (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), on or prior to the Initial Date with respect to such Lender (and
from time to time thereafter at the time or times prescribed by Applicable Law or upon the request of the Borrower or the Administrative Agent), such properly completed and duly executed documentation prescribed by Applicable Law or reasonably
requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding. 
  
 (f) Any Lender that is not a Foreign Lender and has not otherwise established to the reasonable satisfaction of the Borrower and the Administrative Agent
that it is an exempt recipient (as defined in section 6049(b)(4) of the Code and the regulations thereunder) shall deliver to the Borrower (with a copy to the Administrative Agent) on or prior to the Initial Date with respect to such Lender (and
from time to time thereafter as prescribed by Applicable Law or upon the request of the Borrower or the Administrative Agent), a duly executed and properly completed copy of Internal Revenue Service Form W-9 (or applicable successor form).

  

 33 

 (g) If the Administrative Agent, Issuing Bank or a Lender determines, in its sole discretion, that it has
received a refund of or any credit for any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower have paid additional amounts pursuant to this Section 2.13, it shall pay over such refund or
credit to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.13 with respect to the Taxes or Other Taxes giving rise to such refund or credit), net of all out-of-pocket
expenses of the Administrative Agent, Issuing Bank or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund or credit); provided, that the Borrower, upon the request of the
Administrative Agent, Issuing Bank or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, Issuing Bank or such
Lender in the event the Administrative Agent, Issuing Bank or such Lender is required to repay such refund or credit to such Governmental Authority. This Section shall not be construed to require the Administrative Agent, Issuing Bank or any Lender
to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person. 
  
 (h) Each Lender agrees that after it becomes aware of the occurrence of an event that would cause the Borrower to pay any amount pursuant to clause (a) of
this Section 2.13, it will use reasonable efforts to notify the Borrower of such event and, to the extent not inconsistent with such Lender’s internal policies, will use it reasonable efforts to make, fund or maintain the affected Loans of such
Lender or, if applicable, to participate in Letters of Credit issued by the Issuing Bank through another Lending Office of such Lender or the Issuing Bank if as a result thereof the additional amounts which would otherwise be required to be paid by
reason of Section 2.13(a) in respect of such Loans, Letters of Credit or participations therein would be materially reduced, and if, as determined by such Lender or the Issuing Bank, in its discretion, the making, funding or maintaining of such
Loans or Letters of Credit or participations therein through such other Lending Office would not otherwise adversely affect such Loans or Letters of Credit or participations therein or such Lender of the Issuing Bank. Notwithstanding the foregoing,
a failure on the part of any Lender to provide notice pursuant to this Section 2.13(h) shall not affect the Borrower’s obligation to make any payments or deductions required by Section 2.13(a). 
  
 SECTION 2.14. Interest Adjustments. 
  
 (a) If the provisions of this Credit Agreement or any Note would at any time
require payment by the Borrower to a Lender of any amount of interest in excess of the maximum amount then permitted by the law applicable to any Loan, the interest payments to that Lender shall be reduced to the extent necessary so that such Lender
shall not receive interest in excess of such maximum amount. If, as a result of the foregoing, a Lender shall receive interest payments hereunder or under a Note in an amount less than the amount otherwise provided hereunder, such deficit
(hereinafter called the “Interest Deficit”) will, to the fullest extent permitted by Applicable Law, cumulate and will be carried forward (without interest) until the termination of this Credit Agreement. Interest otherwise payable
to a Lender hereunder and 
  

 34 

 under a Note for any subsequent period shall be increased by the maximum amount of the Interest Deficit that may be so
added without causing such Lender to receive interest in excess of the maximum amount then permitted by the law applicable to the Loans. 
  
 (b) The amount of any Interest Deficit relating to a particular Loan and Note shall be treated as a prepayment penalty and shall, to the fullest extent
permitted by Applicable Law, be paid in full at the time of any optional prepayment by the Borrower to the Lenders of all the Loans at that time outstanding pursuant to Section 2.9(a) hereof. The amount of any Interest Deficit relating to a
particular Loan and Note at the time of any complete payment of the Loans at that time outstanding (other than an optional prepayment thereof pursuant to Section 2.9(a) hereof) shall be canceled and not paid. 
  
 SECTION 2.15. Letters of Credit. 
  
 (a) Subject to the terms and conditions hereof and of Applicable Law, the
Issuing Bank agrees to issue Letters of Credit payable in Dollars from time to time after the Closing Date and prior to the Commitment Termination Date upon the request of the Borrower, provided, however, that (A) the Borrower shall
not request that any Letter of Credit be issued if, after giving effect thereto, (i) the then current L/C Exposure would exceed the L/C Sublimit or (ii) the sum of the then current L/C Exposure, plus the aggregate principal amount of
the Loans then outstanding, would exceed the lesser of the then current amount of the Maximum Allowable Outstanding Amount or the Total Commitments, and (B) in no event shall the Issuing Bank issue any Letter of Credit having an expiration
date (x) later than five Business Days prior to the Commitment Termination Date or pursuant to which drafts drawn thereunder would be payable later than five Business Days prior to the Commitment Termination Date or (y) more than one year after its
issuance (or extension). 
  
 (b) Immediately upon the issuance of
each Letter of Credit, each Lender shall be deemed to, and hereby agrees to, have irrevocably purchased from the Issuing Bank a participation in such Letter of Credit in accordance with such Lender’s Percentage. 
  
 (c) Each Letter of Credit may, at the option of the Issuing Bank, provide
that the Issuing Bank may (but shall not be required to) pay all or any part of the maximum amount which may at any time be available for drawing thereunder to the beneficiary thereof upon the occurrence and continuation of an Event of Default and
the acceleration of the maturity of the Loans, provided that, if payment is not then due to the beneficiary, the Issuing Bank may deposit the funds in question in a segregated account with the Issuing Bank to secure payment to the beneficiary and
any funds so deposited shall be paid to the beneficiary of the Letter of Credit if conditions to such payment are satisfied or returned to the Issuing Bank (or, (x) if all Obligations shall have been paid in full in cash, to the Borrower or (y) if
the Lenders shall have reimbursed the Issuing Bank for such amounts pursuant to the terms hereof, to the Lenders) if no payment to the beneficiary has been made and the final date available for drawings under the Letter of Credit has passed. Each
payment or deposit of funds by the Issuing Bank as provided in this paragraph shall be treated for all purposes of this Credit Agreement as a drawing duly honored by the Issuing Bank under the related Letter of Credit. 
  

 35 

 (d) Whenever the Borrower desires the issuance of a Letter of Credit, it shall deliver to the Issuing
Bank and the Administrative Agent a written notice no later than 2:00 p.m., New York City time, at least three Business Days prior to the proposed date of issuance. Such notice shall specify (i) the proposed date of issuance (which shall be a
Business Day), (ii) the face amount of the Letter of Credit, (iii) the expiration date of the Letter of Credit and (iv) the name and address of the beneficiary. Such notice shall be accompanied by a brief description of the underlying transaction
and upon request of the Issuing Bank, the Borrower shall provide additional details regarding the underlying transaction. Concurrently with the giving of written notice of a request for the issuance of a Letter of Credit, the Borrower shall specify
a precise description of the documents and the verbatim text of any certificate to be presented by the beneficiary of such Letter of Credit which, if presented by such beneficiary prior to the expiration date of the Letter of Credit, would require
the Issuing Bank to make payment under the Letter of Credit; provided, however, that the Issuing Bank, in its reasonable discretion, may require customary changes in any such documents and certificates. Promptly after receipt of such
notice, the Administrative Agent shall notify each Lender of the issuance and the amount of each such Lender’s respective participation therein. At the Borrower’s request, the Issuing Bank shall provide the Borrower with a copy of the form
of Letter of Credit to be issued for the Borrower’s review and approval prior to issuance. 
  
 (e) The payment of drafts under any Letter of Credit shall be made in accordance with the terms of such Letter of Credit and the Uniform Customs and
Practice for documentary Credits of the International Chamber of Commerce No. 500, as adopted or amended from time to time. The Issuing Bank shall be entitled to honor any drafts and accept any documents presented to it by the beneficiary of such
Letter of Credit in accordance with the terms of such Letter of Credit and believed by the Issuing Bank in good faith to be genuine. The Issuing Bank shall not have any duty to inquire as to the accuracy or authenticity of any draft or other drawing
documents which may be presented to it, but shall be responsible only to determine in accordance with customary commercial practices that the documents which are required to be presented before payment or acceptance of a draft under any Letter of
Credit have been delivered and that they comply on their face with the requirements of that Letter of Credit. 
  
 (f) If the Issuing Bank shall make payment on any draft presented under a Letter of Credit (regardless of whether a Default or Event of Default or
acceleration has occurred), the Issuing Bank shall give notice of such payment to the Lenders and each Lender hereby authorizes and requests the Issuing Bank to advance for its account pursuant to the terms hereof its share of such payment based
upon its participation in the Letter of Credit and agrees promptly to reimburse the Issuing Bank in immediately available funds for the Dollar equivalent of the amount so advanced on its behalf. If such reimbursement is not made by any Lender in
immediately available funds on the same day on which the Issuing Bank shall have made payment on any such draft, such Lender shall pay interest thereof to the Issuing Bank at a rate per annum equal to the Issuing Bank’s cost of obtaining
overnight funds in the New York Federal Funds Market. In the case of any draft presented under a Letter of Credit which is required to be paid at any time on or before the Commitment Termination Date, such payment of the unreimbursed draft shall
constitute an Alternate Base Rate Loan hereunder and interest shall accrue from the date the Issuing Bank makes payment of a draft under the Letter of Credit. 
  

 36 

 (g) Subject to provisions of Section 2.15(e), the Borrower is absolutely, unconditionally and irrevocably
obligated to reimburse all amounts drawn under each Letter of Credit. If any draft is presented under a Letter of Credit, payment of which is required to be made after the Commitment Termination Date or when there is insufficient availability under
the Facility, then the Borrower will, upon demand by the Issuing Bank, pay to the Issuing Bank, in immediately available funds, the full amount of such draft (or in the case of insufficient availability, the amount of such deficiency). If such
payment is not made by the Borrower and the Issuing Bank shall make payment on any draft presented under a Letter of Credit, the Issuing Bank shall give notice of such payment to the Lenders and each Lender hereby authorizes and requests the Issuing
Bank to advance for its account pursuant to the terms thereof its share of such payment based upon its participation in the Letter of Credit and agrees promptly to reimburse the Issuing Bank in immediately available funds for the Dollar equivalent
of the amount so advanced on its behalf. If such reimbursement is not made by any Lender in immediately available funds on the same day on which the Issuing Bank shall have made payment on any such draft, such Lender shall pay interest thereon to
the Issuing Bank at a rate per annum equal to the Issuing Bank’s cost of obtaining overnight funds in the New York Federal Funds Market. Such payment shall constitute an Alternate Base Rate Loan hereunder and interest shall accrue from the date
the Issuing Bank makes payment of a draft under the Letter of Credit at the rate specified in Section 2.4. 
  
 (h) (i) The Borrower agrees to pay the following amount to the Issuing Bank with respect to Letters of Credit issued by it hereunder: 
  
 A. with respect to the issuance, amendment, transfer or any other
transaction related to each Letter of Credit and each drawing made thereunder, documentary and processing charges in accordance with the Issuing Bank’s standard schedule for such charges in effect at the time of such issuance, amendment,
transfer or drawing, as the case may be; and 
  
 B. a fronting
fee payable to the Issuing Bank for the period from and including the date of issuance of such Letter of Credit to but excluding the Maturity Date, computed at a rate equal to 1/4 of 1% per annum of the daily average L/C Exposure, such fee to be due
and payable in arrears on and through the last Business Day of each calendar quarter, prior to the Maturity Date, on the Maturity Date and on the expiration of the last outstanding Letter of Credit. 
  

	 	(ii)	The Borrower agrees to pay to the Administrative Agent for distribution to each Lender in respect of its L/C Exposure, such Lender’s Pro Rata Share of a commission calculated
at a rate per annum equal to the Applicable Margin for LIBOR Loans (calculated in the same manner as interest) of the undrawn portion of the L/C Exposure. Such commission shall be payable in arrears on and through the last Business Day of each
calendar quarter prior to the Maturity Date, on the Maturity Date and on the expiration of the last outstanding Letter of Credit. 

  

 37 

	 	(iii)	Promptly upon receipt by the Issuing Bank or the Administrative Agent, as applicable, of any amount described in clause (ii) of this Section 2.15(h), or any amount described in
Section 2.15(h) previously reimbursed to the Issuing Bank by the Lenders, the Issuing Bank shall distribute to each Lender its Pro Rata Share of such amount. Amounts payable under clauses (i)(A) and (i)(B) of this Section 2.15(h) shall be paid
directly to the Issuing Bank and shall be for its exclusive use. 

  
 (i) If at any time when an Event of Default shall have occurred and be continuing, any Letters of Credit shall remain outstanding, then the Required Lenders or the Issuing Bank may, at their or its option, require the
Borrower to deliver to the Issuing Bank cash or Cash Equivalents in an amount equal to the full amount of the L/C Exposure or to furnish other security acceptable to the Issuing Bank. Any amounts so delivered pursuant to the preceding sentence shall
be applied to reimburse the Issuing Bank for the amount of any drawings honored under Letters of Credit; provided, however, that if no Default or Event of Default is then continuing at the time of any such delivery of Cash Equivalents
or any such furnishing of other security, the Issuing Bank shall return all of such collateral relating to such deposit to the Borrower upon request. 
  
 (j) If at any time that any Letter of Credit is outstanding, the sum of the L/C Exposure, plus the principal amount of all Loans outstanding
exceeds the Maximum Allowable Outstanding Amount, then the Required Lenders or the Issuing Bank may, at their or its option, require a prepayment of the Loans in accordance with Section 2.9(e) in an amount sufficient to eliminate such excess
or to furnish other security for such excess acceptable to the Issuing Bank. Any amounts so delivered pursuant to the preceding sentence shall be applied to reimburse the Issuing Bank for the amount of any drawings honored under Letters of Credit;
provided, however, that if subsequent to any such deposit such excess is reduced to an amount less than the amount of such deposited amounts and no Default or Event of Default is then continuing, the Borrower shall be entitled to
receive such excess collateral if requested by it. 
  
 3. REPRESENTATIONS AND
WARRANTIES OF THE CREDIT PARTIES 
  
 In order to induce the
Administrative Agent, the Issuing Bank and the Lenders to enter into this Credit Agreement and to issue the Letters of Credit, participate in such Letters of Credit and make the Loans provided for herein, as applicable, the Credit Parties, jointly
and severally, make the following representations and warranties to, and agreements with, the Administrative Agent, the Issuing Bank and the Lenders, all of which shall survive the execution and delivery of this Credit Agreement, the issuance of the
Notes, the making of the Loans and the issuance of the Letters of Credit. 
  
 SECTION 3.1. Existence and Power. 
  
 (a) Each member of the Credit Group is a corporation, limited liability company or limited partnership (w) duly incorporated or otherwise organized, (x) validly existing, (y) in jurisdictions in which it is
applicable, in good standing under the laws of its jurisdiction of organization and (z) where applicable, in good standing as a foreign entity in all jurisdictions where (i) the nature of its properties or business so requires, or (ii) the failure
to be 
  

 38 

 so qualified or be in good standing could, individually or in the aggregate, be expected to have a Material Adverse
Effect. A list of such jurisdictions as of the date hereof is attached hereto as Schedule 3.1. 
  
 (b) Each member of the Credit Group has the power and authority (i) to own its respective properties and carry on its respective business as now being
conducted and as intended to be conducted, and (ii) in the case of the Credit Parties, to (x) execute, deliver and perform, as applicable, its obligations under the Fundamental Documents and any other documents contemplated thereby to which it is or
will be a party, and (y) grant to the Administrative Agent, for the benefit of the Administrative Agent, the Issuing Bank and the Lenders, a security interest in the Collateral as contemplated by Article 8 hereof and in the Group 1 Pledged
Securities as contemplated by Article 11 hereof; and in the case of the Guarantors, to guaranty the Obligations as contemplated by Article 9 hereof. 
  
 SECTION 3.2. Authority and No Violation. 
  
 (a) The execution, delivery and performance of this Credit Agreement and the other Fundamental Documents to which it is a party by each Credit Party, the
grant to the Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank and the Lenders of the security interest in the Collateral and the Pledged Securities as contemplated herein and by the other Fundamental Documents by
each Credit Party and, in the case of the Borrower, the Borrowings hereunder and the execution, delivery and performance of the Notes and, in the case of each Guarantor, the guaranty of the Obligations as contemplated in Article 9 hereof, (i) have
been duly authorized by all necessary corporate action (or similar action) on the part of each Credit Party, (ii) will not constitute a violation of any provision of Applicable Law in any material respect or any order of any Governmental Authority
applicable to such Credit Party, or any of its properties or assets in any material respect, (iii) will not violate any provision of the Certificate of Incorporation, By–Laws, operating agreement, partnership agreement or any other
organizational document of such Credit Party, (iv) will not violate any provision of any Distribution Agreement, indenture, agreement, bond, note or other similar instrument to which such Credit Party is a party or by which such Credit Party or any
of its properties or assets are bound, other than where any such violation could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (v) will not be in conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under, or create any right to terminate, any such Distribution Agreement, indenture, agreement, bond, note or other similar instrument, other than where any such violation could not,
either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (vi) will not result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any of the properties or
assets of any of such Credit Parties other than pursuant to this Credit Agreement or the other Fundamental Documents. 
  
 (b) Other than the restrictions listed on Schedule 3.2(b), there are no restrictions on the transfer of any of the Pledged Securities other than as
a result of this Credit Agreement, the Pledge Agreement or applicable securities laws and the regulations promulgated thereunder. 
  

 39 

 SECTION 3.3. Governmental Approval. All authorizations, approvals, registrations or filings from
or with any Governmental Authority (other than UCC financing statements, the Copyright Security Agreement and the Trademark Security Agreement which will be delivered to the Administrative Agent on or prior to the Closing Date, in form suitable for
recording or filing with the appropriate filing office) required for the consummation of the execution, delivery and performance by any Credit Party of this Credit Agreement and the other Fundamental Documents to which it is a party, and the
execution and delivery by the Borrower of the Notes, have been duly obtained or made or duly applied for, and are in full force and effect, except those which, if not obtained, could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, and if any further authorizations, approvals, registrations or filings should hereafter become necessary, the Credit Parties shall obtain or make all such authorizations, approvals, registrations or
filings. 
  
 SECTION 3.4. Binding Agreements. This Credit
Agreement and the other Fundamental Documents when executed, will constitute the legal, valid and binding obligations of each Credit Party that is a party thereto, enforceable against each Credit Party in accordance with their respective terms,
subject, as to the enforcement of remedies, to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights generally and to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law). 
  
 SECTION
3.5. Financial Statements. The (i) unaudited consolidated balance sheet of the Parent and its Consolidated Subsidiaries for the quarter ended January 31, 2005, and (ii) unaudited combined balance sheet of the Credit Group for the quarter
ended January 31, 2005, in each case, together with the related statements of income, have been prepared in accordance with GAAP in effect as of such date consistently applied, except as otherwise indicated in the notes to such financial statements
and subject to changes resulting from year-end and audit adjustments. All of such financial statements (x) are true and correct in all material respects, (y) fairly present the financial position or the results of operations of the Parent and its
Consolidated Subsidiaries or the Credit Group, as applicable, on a consolidated basis at the dates or for the periods indicated, subject to year-end and audit adjustments and (z) reflect all known liabilities, contingent or otherwise, that GAAP
require, as of such dates, to be shown or reserved against. 
  
 SECTION 3.6. No Material Adverse Change. There has been no material adverse change with respect to the business, operations, performance, assets, properties or financial condition of the Credit Parties or the Credit Group, in each
case taken as a whole, from July 31, 2004. 
  
 SECTION 3.7.
Ownership of Pledged Securities, Subsidiaries, etc. 
  
 (a) Annexed hereto as Schedule 3.7(a) is a correct and complete list as of the date hereof, of each member of the Credit Group showing, as to each, (i) its name, (ii) the jurisdiction in which it was incorporated or organized and
(iii) its authorized capitalization, the number of Equity Interests outstanding and the ownership of its Equity Interests. All of the entities comprising the “Anchor Bay”, “Manga” and “New Arc” businesses are listed on
Schedule 3.7(a), and the financial statements and Initial Projections heretofore delivered to the Administrative Agent reflect information relating to all such Persons and no other Persons. 
  

 40 

 (b) Except as set forth on Schedule 3.7(b), no Credit Party owns any voting stock, Equity Interest
or other beneficial interest, either directly or indirectly, in any Person other than another Credit Party or an entity formed under the laws of a jurisdiction located outside of the United States of America with respect to which an investment
therein is permitted under the terms of Section 6.4 hereof. 
  
 SECTION 3.8. Copyrights, Trademarks and Other Rights. 
  
 (a) On the date hereof, the Items of Product listed on Schedule 3.8(a) hereto comprise all of the Items of Product in which any member of the Credit Group has any right, title or interest (either directly, through a joint venture or
partnership or otherwise). Except as set forth on Schedule 3.8(c), the copyright registration number (when issued) and the character of the interests held by the relevant member of the Credit Group (i.e., whether owned by, optioned by,
or assigned to, such person, etc.) for such Items of Product are set forth across from the description of such Item of Product and as to each of the top twenty-five Items of Product which generate the greatest amount of revenues or other income (as
listed on Schedule 3.8(a)), the member of the Credit Group holding such interests has duly recorded (or, on the Closing Date, will duly record) its interests in the United States Copyright Office and has delivered (or, on the Closing Date,
will deliver) copies of all such recordations to the Administrative Agent. Schedule 3.8(a) also identifies the location of the best available Physical Materials related to each Item of Product owned by the Credit Group. To the best of each
Credit Party’s knowledge, all such Items of Product and all component parts thereof do not and will not violate or infringe upon any copyright, right of privacy, trademark, patent, trade name, performing right or any literary, dramatic,
musical, artistic, personal, private, several, care, contract, property or copyright right or any other right of any Person or contain any libelous or slanderous material. Except as set forth in Schedule 3.12, there is no claim, suit, action
or proceeding pending or, to the best of each Credit Party’s knowledge, threatened against any member of the Credit Group or any other Person that involves a claim of infringement of any copyright with respect to any Item of Product listed on
Schedule 3.8(a), and no Credit Party has any knowledge of any existing infringement by any other Person of any copyright held by any member of the Credit Group with respect to any Item of Product listed on Schedule 3.8(a) which, in
each case, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 
  
 (b) Schedule 3.8(b) hereto (i) lists all the trademarks registered by any member of the Credit Group on the date hereof (or to be registered on the
Closing Date) and identifies the member of the Credit Group which registered (or which will register) each such trademark, (ii) specifies as to each, the jurisdictions in which such trademark has been issued or registered (or, if applicable, in
which an application for such issuance or registration has been or will be filed), including the respective registration or application numbers and applicable dates of registration or application, and (iii) specifies as to each, as applicable,
material licenses, sublicenses and other material agreements as of the date hereof (other than any Distribution Agreements), to which any member of the Credit Group is a party and/or pursuant to which any Person is authorized to use such trademark.
Each trademark set forth on Schedule 3.8(b) that is registered in the name of a Credit Party will be included on Schedule A to the Trademark Security Agreement to be delivered to the Administrative Agent on or prior to the Closing Date
pursuant to Section 4.1(f). 
  

 41 

 (c) Except as set forth on Schedule 3.8(c), all applications and registrations for all copyrights,
trademarks, service marks, trade names and service names in which any member of the Credit Group has (or, as of the Closing Date, will have) any right, title or interest are (or, as of the Closing Date, will be) valid and in full force and effect
(other than trademarks, service marks, trade names and service names that in the aggregate are not material) and are not (and, as of the Closing Date, will not be) subject to the payment of any taxes or maintenance fees or the taking of any other
actions by the Credit Group to maintain their validity or effectiveness. 
  
 SECTION 3.9. Fictitious Names. Except as disclosed on Schedule 3.9, no member of the Credit Group has done business, is doing business or intends to do business other than under its full corporate name,
including, without limitation, under any trade name or other doing business name. 
  
 SECTION 3.10. Title to Properties. As of the Closing Date, the Credit Group will have good title to each of the properties and assets reflected on the most recent financial statements delivered pursuant to
Section 5.1(a) hereof and all such properties and assets are free and clear of Liens, except Permitted Encumbrances. 
  
 SECTION 3.11. Places of Business. The chief executive office of each Credit Party is, on the date hereof, as set forth on Schedule 3.11
hereto. All of the places where each Credit Party keeps (or intends to keep) the records concerning the Collateral on the date hereof or regularly keeps (or intends to keep) any goods included in the Collateral on the date hereof are also listed on
Schedule 3.11 hereto. 
  
 SECTION 3.12. Litigation.
Schedule 3.12 sets forth a list as of the Closing Date of all actions, suits or other proceedings at law or in equity by or before any arbitrator, arbitration panel or Governmental Authority, and to the best of each Credit Party’s
knowledge, any investigation by any Governmental Authority of the affairs of, or threatened action, suit or other proceeding against or affecting, any member of the Credit Group or any of their respective properties or rights. Except as set forth in
Schedule 3.12, there are no actions, suits or other proceedings at law or in equity by or before any arbitrator, arbitration panel or Governmental Authority (including, but not limited to, matters relating to environmental liability) or, to
the best of each Credit Party’s knowledge, any investigation by any Governmental Authority of the affairs of, or threatened action, suit or other proceeding against or affecting, any member of the Credit Group or of any of their respective
properties or rights which either (A) if adversely determined, could reasonably be expected to have a Material Adverse Effect, or (B) relate to this Credit Agreement, any other Fundamental Documents or any of the transactions contemplated hereby. No
member of the Credit Group is in default with respect to any order, writ, injunction, decree, rule or regulation of any Governmental Authority binding upon such Person. 
  
 SECTION 3.13. Federal Reserve Regulations. None of the Credit Parties is engaged principally or as one of its
important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the Loans will be used, directly or indirectly, whether immediately, incidentally or ultimately (i) to

  

 42 

 purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin
Stock, or (ii) for any other purpose, in each case, violative of or inconsistent with any of the provisions of any regulation of the Board, including, without limitation, Regulations T, U and X thereto. 
  
 SECTION 3.14. Investment Company Act. None of the Credit Parties is,
or will during the term of this Credit Agreement be, (i) an “investment company”, within the meaning of the Investment Company Act of 1940, as amended, or (ii) subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act or any foreign, federal or local statute or any other Applicable Law of the United States of America or any other jurisdiction, in each case limiting its ability to incur indebtedness for money borrowed as contemplated hereby or by
any other Fundamental Document. 
  
 SECTION 3.15. Taxes.
Each member of the Credit Group (and IDT and Parent to the extent a member of the Credit Group is consolidated or included in a tax return of IDT or Parent) has filed or caused to be filed all material federal, state, local and foreign tax returns
which are required to be filed with any Governmental Authority after giving effect to applicable extensions, and has paid or has caused to be paid all material taxes as shown on said returns or on any assessment received by it in writing, to the
extent that such taxes have become due, except as permitted by Section 5.12 hereof. No Credit Party knows of any material additional assessments or any basis therefor. The Credit Parties believe that the charges, accruals and reserves on its books
in respect of taxes or other governmental charges are accurate and adequate. 
  
 SECTION 3.16. Compliance with ERISA. Each of the Credit Parties’ Plans, each of which has been maintained and operated in all material respects in accordance with all Applicable Laws, including ERISA and
the Code, and each Plan intended to qualify under section 401(a) of the Code satisfies the requirements of this Section 3.16 in all material respects. No Reportable Event has occurred in the last five years as to any Plan, and the present value of
all benefits under all Plans subject to Title IV of ERISA (based on those assumptions used to fund such Plans) did not, in the aggregate, as of the last annual valuation date applicable thereto, exceed the actuarial value of the assets of such Plans
allocable to such benefits by more than $100,000. No material liability has been, and no circumstances exist pursuant to which any material liability is reasonably likely to be, imposed upon any Credit Party or ERISA Affiliate (i) under sections
4971 through 4980E of the Code, sections 502(i) or 502(l) of ERISA, or Title IV of ERISA with respect to any Plan or Multiemployer Plan, or with respect to any plan heretofore maintained by any Credit Party or ERISA Affiliate, or any entity that
heretofore was an ERISA Affiliate, (ii) for the failure to fulfill any obligation to contribute to any Multiemployer Plan, or (iii) with respect to any Plan that provides post-retirement welfare coverage (other than as required pursuant to Section
4980B of the Code). Neither any Credit Party nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization or has been terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated. 
  

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 SECTION 3.17. Agreements. 
  
 (a) No member of the Credit Group is in default in the performance, observance or fulfillment of any of the material
obligations, covenants or conditions contained in any agreement or instrument (including, without limitation, any Distribution Agreement) to which it is a party. 
  
 (b) Schedule 3.17 is a true and complete listing as of the date hereof of (i) all credit agreements, indentures, and
other agreements related to any indebtedness for borrowed money of any member of the Credit Group, other than the Fundamental Documents, (ii) all joint venture agreements to which any member of the Credit Group is a party, (iii) all material
Distribution Agreements to which any member of the Credit Group is a party, (iv) all agreements or other arrangements pursuant to which any member of the Credit Group has granted a Lien to any Person, and (v) all other contractual arrangements
entered into by any member of the Credit Group or by which any member of the Credit Group is bound which arrangements are material to any member of the Credit Group, including but not limited to, Guaranties and employment agreements. The Credit
Parties have delivered or made available to the Administrative Agent a true and complete copy of each agreement (or, if not yet executed, the most recent draft) described on Schedule 3.17, including all exhibits and schedules. For purposes of
this Section 3.17, a Distribution Agreement or other contract, agreement or arrangement shall be deemed “material” if any member of the Credit Group reasonably expects that any member of the Credit Group would, pursuant to the terms
thereof, (A) recognize future revenues in excess of $2,500,000, (B) incur liabilities or obligations in excess of $2,500,000, or (C) likely suffer damages or losses in excess of $2,500,000 by reason of the breach or termination thereof. 

 
 SECTION 3.18. Security Interest. This Credit Agreement and the
other Fundamental Documents, when executed and delivered and, upon the making of the initial Loan hereunder, will create and grant to the Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank and the Lenders (upon (i)
the filing of the appropriate UCC-1 financing statements with the filing offices listed on Schedule 3.18, (ii) the filing of the Copyright Security Agreement with the U.S. Copyright Office, (iii) the filing of the Trademark Security Agreement
with the U.S. Patent and Trademark Office, and (iv) the delivery of the Pledged Securities with (in the case of Pledged Securities comprising capital stock) appropriate stock powers to the Administrative Agent) valid and first priority perfected
security interests in the Collateral (subject only to Permitted Encumbrances) including in the Pledged Securities. The Parent and each Credit Party’s taxpayer identification number and organizational identification number is listed on
Schedule 3.18 hereto. 
  
 SECTION 3.19. Environmental
Liabilities. 
  
 (a) Except as set forth in Schedule
3.19, no member of the Credit Group has used, stored, treated, transported, manufactured, refined, handled, produced or disposed of any Hazardous Materials on, under, at, from or in any way affecting, any of its properties or assets owned or
leased by a member of the Credit Group, in any manner which at the time of the action in question materially violated any Environmental Law governing the use, storage, treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials and to the best of each Credit Party’s knowledge, no prior owner of such property or asset or any tenant, subtenant, prior tenant or prior subtenant thereof has used Hazardous Materials on or affecting such
property or asset, or otherwise, in any manner which at the time of the action in 
  

 44 

 question materially violated any Environmental Law governing the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of Hazardous Materials. 
  
 (b) To the best of each Credit Party’s knowledge (i) no member of the Credit Group has any obligations or liabilities, known or unknown, matured or not matured, absolute or contingent, assessed or unassessed, which could reasonably be
expected to have a Material Adverse Effect, and (ii) no claims have been made against any of the Credit Parties in the past five years and no presently outstanding citations or notices have been issued against any of the Credit Parties, which could
reasonably be expected to have a Material Adverse Effect which in either case have been or are imposed by reason of or based upon any provision of any Environmental Law, including, without limitation, any such obligations or liabilities relating to
or arising out of or attributable, in whole or in part, to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation or handling of any Hazardous Materials by any member of the Credit Group, or any of its
employees, agents, representatives or predecessors in interest in connection with or in any way arising from or relating to any of the Credit Parties or any of their respective owned or leased properties, or relating to or arising from or
attributable, in whole or in part, to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation or handling of any such substance, by any other Person at or on or under any of the real properties owned or used by
any of the Credit Parties or any other location where such could have a Material Adverse Effect. 
  
 SECTION 3.20. Pledged Securities. 
  
 (a) All of the Pledged Securities are duly authorized, validly issued, fully paid and non-assessable, and are owned and held by the Pledgors or TLL (as
applicable), free and clear of any Liens, other than those created pursuant to this Credit Agreement or the Pledge Agreement and other Permitted Encumbrances and there are no restrictions on the transfer of the Pledged Securities other than as a
result of this Credit Agreement, the Pledge Agreement or applicable securities laws and the regulations promulgated thereunder. The Pledged Securities are owned by the Persons specified on Schedules 3.7(a) and (b). 
  
 (b) Except as set forth on Schedules 3.7(a) and (b), there are no
outstanding rights, warrants, options, conversion or similar rights currently outstanding with respect to, and no agreements to purchase or otherwise acquire, any shares of the capital stock or other Equity Interests of any issuer of any of the
Pledged Securities; and there are no securities or obligations of any kind convertible into any shares of the capital stock or other Equity Interests of any issuer of any of the Pledged Securities. 
  
 (c) Article 11 of this Credit Agreement together with the Pledge Agreement
creates in favor of the Administrative Agent (on behalf of the Administrative Agent, the Issuing Bank and the Lenders) a valid, binding and enforceable security interest in, and Lien upon, all right, title and interest of the Pledgors in the Pledged
Securities and constitutes a fully perfected first and prior security interest and Lien upon all right, title and interest of the Pledgors in such Pledged Securities (provided, that the definitive instruments (if any) representing all Pledged
Securities shall have been delivered to the Administrative Agent (and the Administrative Agent has taken possession or control of such Pledged Securities) together (in the case of Pledged 
  

 45 

 Securities comprising capital stock) with appropriate undated stock powers endorsed or executed in blank by the
appropriate Pledgor as required under Section 11.1 hereof and Section 2 of the Pledge Agreement). 
  
 SECTION 3.21. Compliance with Laws. No member of the Credit Group is in violation of any Applicable Law except for such violations in the aggregate
which could not reasonably be expected to have a Material Adverse Effect. The Borrowings hereunder, the intended use of the proceeds of the Loans as described in the preamble hereto and as contemplated by Section 5.17 hereof and any other
transactions contemplated hereby will not violate any Applicable Law. 
  
 SECTION 3.22. Subsidiaries. No member of the Credit Group has a direct or indirect Subsidiary other than as listed on Schedule 3.7(b). 
  
 SECTION 3.23. Solvency. No Credit Party has entered or is entering into the arrangements contemplated hereby and by the other Fundamental
Documents, or intends to make any transfer or incur any obligations hereunder or thereunder, with actual intent to hinder, delay or defraud either present or future creditors. On and as of the Closing Date, on a pro forma basis after giving effect
to all Indebtedness (including the Loans) (i) each Credit Party expects the cash available to such Credit Party, after taking into account all other anticipated uses of the cash of such Credit Party (including the payments on or in respect of debt
referred to in clause (iii) of this Section 3.23), will be sufficient to satisfy all final judgments for money damages which have been docketed against such Credit Party or which may be rendered against such Credit Party in any action in which such
Credit Party is a defendant (taking into account the reasonably anticipated maximum amount of any such judgment and the earliest time at which such judgment might be entered); (ii) the sum of the present fair saleable value of the assets of each
Credit Party will exceed the probable liability of such Credit Party on its debts (including its Guaranties after giving effect to the Contribution Agreement); (iii) no Credit Party will have incurred or intends to, or believes that it will, incur
debts beyond its ability to pay such debts as such debts mature (taking into account the timing and amounts of cash to be received by such Credit Party from any source, and of amounts to be payable on or in respect of debts of such Credit Party and
the amounts referred to in clause (ii)); and (iv) each Credit Party believes it will have sufficient capital with which to conduct its present and proposed business and the property of such Credit Party does not constitute unreasonably small capital
with which to conduct its present or proposed business. For purposes of this Section 3.23, “debt” means any liability or a claim, and “claim” means any (y) right to payment whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or (z) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such
right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured. 
  
 SECTION 3.24. True and Complete Disclosure. 
  
 Neither this Agreement nor any other Fundamental Document nor any material agreement, document, certificate or statement (other than the Initial
Projections) furnished to the Agent and the Lenders by or on behalf of any Credit Party in connection with the transactions 
  

 46 

 contemplated hereby, at the time it was furnished contained any untrue statement of a material fact or omitted to state a
material fact, under the circumstances under which it was made, necessary in order to make the statements contained herein or therein not misleading (considered in the context of all other information provided to the Lenders). The Initial
Projections, unless otherwise disclosed, were prepared in good faith based upon reasonable assumptions. At the date hereof, there is no fact known to any Credit Party (other than general industry conditions) which materially and adversely affects,
or in the future may reasonably be expected to materially and adversely affect the business, properties, assets, operations or financial condition of the Credit Parties, taken as a whole. 
  
 4. CONDITIONS OF LENDING 
  
 SECTION 4.1. Conditions Precedent to Initial Loan. The obligation of each Lender to make its initial Loan and participate in the initial Letter of
Credit, and the obligation of the Issuing Bank to issue the initial Letter of Credit, is subject to the satisfaction in full of the following conditions precedent: 
  

	 	(a)	Corporate Documents. The Administrative Agent shall have received, with copies for each of the Lenders: 

  

	 	(i)	a copy of the articles or certificate of incorporation or certificate of limited partnership (or equivalent document) of the Parent and each member of the Credit Group, certified on
a recent date by the Secretary of State or other relevant office of such Person’s jurisdiction of incorporation or organization, as the case may be; 

  

	 	(ii)	from each jurisdiction in which it is available, a certificate of the Secretary of State of such jurisdiction of organization, dated as of a recent date as to the good standing of,
and payment of taxes by, the Parent and each member of the Credit Group which certificate lists (if available) the charter documents on file in the office of such Secretary of State; 

  

	 	(iii)	from each jurisdiction in which it is available, a certificate dated as of a recent date as to the good standing of the Parent and each member of the Credit Group issued by the
Secretary of State or other relevant office of each jurisdiction in which such Credit Party is qualified as a foreign corporation as listed in Schedule 3.1 hereto; 

  

	 	(iv)	a certificate of the Secretary, Assistant Secretary or other appropriate officer acceptable to the Administrative Agent, of the Parent and each member of the Credit Group, dated the
Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws, articles of organization, partnership agreement (or equivalent document) of such party as in effect on the date of such certification; (B) in the case
of the Parent and each of the Credit Parties, that attached thereto is a true and complete copy of the resolutions adopted by the Board of Directors (or equivalent body) of such party authorizing the execution, delivery and 

 

 47 

 performance in accordance with their respective terms of the Fundamental Documents executed by the
Parent or such Credit Party, as applicable, and any other documents required or contemplated hereunder or thereunder, the grant of the security interests in the Collateral, and in the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been amended, rescinded or supplemented and are currently in effect; (C) that the articles, certificate of incorporation or certificate of limited partnership (or equivalent document) of such party has not been amended since the
date of the last amendment thereto indicated on the certificates of the Secretary of State or other appropriate office furnished pursuant to clause (i) above; and (D) in the case of the Parent and each of the Credit Parties, as to the incumbency and
specimen signature of each officer of such party executing any Fundamental Document (such certificate to contain a certification by another officer of such party as to the incumbency and signature of the officer signing the certificate referred to
in this clause (iv)); and 
  

	 	(v)	such additional supporting documents as the Administrative Agent or its counsel may reasonably request. 

  
 (b) Credit Agreement; Notes. The Administrative Agent shall have received (i) executed counterparts of this Credit
Agreement, which, when taken together, bear the signatures of the Administrative Agent, the Issuing Bank, all of the Credit Parties and all of the Lenders, and (ii) the Notes executed by the Borrower. 
  
 (c) Opinions of Counsel. The Administrative Agent shall have received
(i) the written opinion of O’Melveny & Myers LLP, counsel to the Credit Parties, dated the Closing Date and addressed to the Administrative Agent, the Issuing Bank and the Lenders which opinion shall be substantially in the form attached
hereto as Exhibit B-1, in form and substance reasonably satisfactory to the Administrative Agent and to Morgan, Lewis & Bockius LLP, counsel to the Administrative Agent and (ii) the written opinion of Williams Williams Ruby &
Plunkett, P.C., Michigan counsel to the Borrower, dated the Closing Date and addressed to the Administrative Agent, the Issuing Bank and the Lenders which opinion shall be substantially in the form attached hereto as Exhibit B-2, in form and
substance reasonably satisfactory to the Administrative Agent and to Morgan, Lewis & Bockius LLP, counsel to the Administrative Agent. 
  
 (d) No Material Adverse Change. No material adverse change shall have occurred with respect to the business, operations, performance, assets,
properties, condition (financial or otherwise) or prospects of the Credit Parties or the Credit Group, in each case taken as a whole, from July 31, 2004 except for changes heretofore disclosed to the Lenders. 
  
 (e) Insurance. The Credit Parties shall have furnished the
Administrative Agent with (i) a summary of all existing insurance coverage, (ii) evidence acceptable to the Administrative Agent that the insurance policies required by Section 5.5 have been obtained and are in full force and effect, and (iii)
certificates of insurance with respect to all existing insurance coverage which certificates shall name JPMorgan Chase Bank, N.A., as Administrative Agent, as the certificate holder and shall evidence the Credit Parties’ compliance with Section
5.5(e) with respect to all insurance coverage existing as of the Closing Date. 
  

 48 

 (f) Security and Other Documentation. The Administrative Agent shall have received fully executed
copies of: (i) Pledgeholder Agreements for each Item of Product for which a Credit Party has control over any physical elements thereof as listed on Schedule 3.8(a) hereto after giving effect to the transactions contemplated hereby (other
than such Items of Product which are not, individually or in the aggregate, material); (ii) a Copyright Security Agreement listing each Item of Product in which any Credit Party has a copyrightable interest (as listed on Schedule 3.8(a)
hereto after giving effect to the transactions contemplated hereby) executed by each such Credit Party; (iii) a Trademark Security Agreement for each trademark in which any Credit Party has any interest (as listed on Schedule 3.8(b) hereto)
executed by each such Credit Party; (iv) Laboratory Access Letters for each Item of Product where any Credit Party has access rights to any physical elements of such Item of Product (after giving effect to the transactions contemplated hereby)
(other than such Items of Product which are not, individually or in the aggregate, material); (v) the Debenture executed by Manga UK; (vi) the Pledge Agreement executed by TLL; (vii) appropriate UCC-1 financing statements and Forms 395 relating to
the Collateral; and (viii) the Pledged Securities with (in the case of Pledged Securities comprising capital stock) appropriate undated stock powers executed in blank. 
  
 (g) Security Interests in Copyrights and other Collateral. The Administrative Agent shall have received evidence
reasonably satisfactory to it that each Credit Party has sufficient right, title and interest in and to the Collateral and other assets which it purports to own (including appropriate licenses under copyright), as set forth in the documents and
other materials presented to the Lenders, to enable such Credit Party to perform the Distribution Agreements to which such Credit Party is a party and as to each Credit Party, to grant to the Administrative Agent for the benefit of the
Administrative Agent, the Issuing Bank and the Lenders the security interests contemplated by the Fundamental Documents, and that all financing statements, copyright filings and other filings under Applicable Law necessary to provide the
Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders with a first priority perfected security interest in the Pledged Securities and Collateral (subject in the case of the Collateral, to Permitted Encumbrances) have been
filed or delivered to the Administrative Agent in satisfactory form for filing. 
  
 (h) Payment of Fees. All fees and expenses then due and payable by the Parent or any Credit Party to the Administrative Agent and/or the Lenders in connection with the transactions contemplated hereby, or as
required by the Fee Letter in respect of the Facility, shall have been paid. 
  
 (i) Notices of Assignment and Irrevocable Instructions. The Administrative Agent shall have received with respect to each account receivable of a Credit Party, a Notice of Assignment and Irrevocable
Instructions executed by the appropriate Credit Party. 
  
 (j)
Chain of Title. The Administrative Agent shall have received copies of all agreements, instruments of transfer or other instruments (in recordable form) (including, without limitation, the rights agreements) necessary to establish, to the
reasonable satisfaction of the Administrative Agent, (i) the applicable member of the Credit Group’s ownership of sufficient 
  

 49 

 rights in each Item of Product identified by the Administrative Agent in its reasonable discretion, to enable such member
of the Credit Group to produce and/or distribute such Item of Product and, in the case of the Credit Parties, to grant to the Administrative Agent for the benefit of the Lenders the security interests therein which are contemplated by this Credit
Agreement, and (ii) the interest of such member of the Credit Group in each Item of Product identified by the Administrative Agent in its reasonable discretion; provided, that no member of the Credit Group shall be required to deliver chain
of title documentation establishing such Person’s ownership interest in those Items of Product which are not material as “material” is defined in Section 3.17 hereof. 
  
 (k) Litigation. Except as disclosed in Schedule 3.12, no litigation, inquiry, injunction or restraining order
shall be pending, entered or threatened which involves this Credit Agreement or which could reasonably be expected to have a Material Adverse Effect. 
  
 (l) Searches. The Administrative Agent shall have received UCC, copyright office and other searches satisfactory to it indicating that no other
filings, encumbrances or transfers (other than in connection with Permitted Encumbrances) with regard to the Collateral are of record in any jurisdiction in which it shall be necessary or desirable for the Administrative Agent to make a UCC filing
in order to provide the Administrative Agent (for the benefit of the Administrative Agent, the Issuing Bank and the Lenders) with a perfected security interest in the Collateral. 
  
 (m) ERISA. The Administrative Agent shall have received copies of all Plans of each member of the Credit Group
subject to Title IV of ERISA that are in existence on the Closing Date, and descriptions of those that are committed to on the Closing Date. 
  
 (n) Contribution Agreement. The Administrative Agent shall have received a fully executed Contribution Agreement duly executed by each of the
Credit Parties. 
  
 (o) Material Agreements. The
Administrative Agent shall have received a copy, certified by the Borrower, of each agreement listed on Schedule 3.17 requested by it. 
  
 (p) Account Control Agreement. The Administrative Agent shall have received fully executed Account Control Agreements for each account of a Credit
Party existing at a bank other than the Administrative Agent as of the Closing Date duly executed by such Credit Party and such bank. 
  
 (q) Required Consents and Approvals. The Administrative Agent shall be satisfied that all required consents and approvals have been obtained with
respect to the transactions contemplated hereby from all Governmental Authorities with jurisdiction over the business and activities of the Parent, any Credit Party or TLL and from any other entity whose consent or approval the Administrative Agent
in its reasonable discretion deems necessary to the transactions contemplated hereby. 
  
 (r) Federal Reserve Regulations. The Administrative Agent shall be satisfied that the provisions of Regulations T, U and X of the Board will not be violated by the transactions contemplated hereby. 

 

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 (s) Compliance with Laws. The Administrative Agent shall be satisfied that the transactions
contemplated hereby will not (i) violate any provision of Applicable Law, or any order of any court or other agency of the United States of America or any state thereof applicable to any of the Credit Parties, TLL or any of their respective
properties or assets or (ii) conflict with, or result in a default, breach or right of termination or acceleration under, any material agreement to which any member of the Credit Group is a party, other than such as could not reasonably be expected
to result in a Material Adverse Effect. 
  
 (t) Financial
Statements. The Lenders shall have received (i) the unaudited consolidated balance sheet of the Parent and its Consolidated Subsidiaries for the quarter ended January 31, 2005, together with the related statements of income and (ii) the
unaudited combined balance sheet of the Credit Group for the quarter ended January 31, 2005, together with the related statements of income. 
  
 (u) IDT Financial Certificate. The Lenders shall have received a certificate from IDT in form and substance satisfactory to the Administrative
Agent certifying that the representations and warranties contained in Sections 3.5 and 10.4(c) are true and correct. 
  
 (v) USA Patriot Act. The Administrative Agent shall have received any information required and requested by the Administrative Agent, the Issuing
Bank or any Lender under or in connection with the USA Patriot Act. 
  
 (w) No Material Adverse Change. Since July 31, 2004 no event or events shall have occurred which have had a Material Adverse Effect or a material adverse change with respect to the business, operations, performance, assets,
properties or financial condition of the Parent or IDT. 
  
 (x)
Approval of Counsel to the Administrative Agent. All legal matters incident to this Credit Agreement and the other transactions contemplated hereby shall be reasonably satisfactory to Morgan, Lewis & Bockius LLP, counsel to the
Administrative Agent. 
  
 (y) Other Documents. The
Administrative Agent shall have received such other documentation as the Administrative Agent may reasonably request. 
  
 SECTION 4.2. Conditions Precedent to Each Loan and Letter of Credit. The obligations of the Issuing Bank to issue each Letter of Credit and of the
Lenders to make each of the Loans and participate in each Letter of Credit (including the initial Loan and initial Letter of Credit) are subject to the following conditions precedent: 
  
 (a) Notice. The Administrative Agent shall have received a notice with respect to such Borrowing or the Issuing Bank
shall have received a notice with respect to such Letter of Credit as required by Article 2 hereof. 
  
 (b) Borrowing Certificate. In the case of a Borrowing, the Administrative Agent shall have received a Borrowing Certificate with respect to such
Borrowing, duly executed by an Authorized Officer of the Borrower. 
  

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 (c) Representations and Warranties. The representations and warranties set forth in Article 3
hereof (as updated from time to time by any amendment of the Schedules attached to this Credit Agreement in accordance with Section 5.1(h) hereof) and in the other Fundamental Documents shall be true and correct in all material respects on and as of
the date of each Borrowing and the date of issuance of each Letter of Credit (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and
correct as of such earlier date) with the same effect as if made on and as of such date. 
  
 (d) No Default or Event of Default. On the date of each Borrowing and the date of issuance of each Letter of Credit, no Default or Event of Default shall have occurred and be continuing, nor shall any such
event occur by reason of the making of such Loan or the issuance of such Letter of Credit. 
  
 (e) No Material Adverse Change. No event or events shall have occurred (since the date of the annual audited financial statements which were most recently delivered pursuant to Sections 3.5 or 5.1) which have
had a Material Adverse Effect or a material adverse change with respect to the business, operations, performance, assets, properties or financial condition of the Parent or IDT. 
  
 Each request for a Borrowing or a Letter of Credit shall be deemed to be a representation and warranty by the Borrower on the date of such
Borrowing or the date of issuance of such Letter of Credit, as applicable, as to the matters specified in paragraphs (c), (d) and (e) of this Section 4.2. 
  
 5. AFFIRMATIVE COVENANTS 
  
 From the date hereof and for so long as the Commitments shall be in effect, any amount shall remain outstanding under any Note, any Letter of Credit shall
remain outstanding or any other Obligation shall remain unpaid or unsatisfied, each of the Credit Parties agrees that, unless the Required Lenders shall otherwise consent in writing, it will, and will cause each of its Subsidiaries and each other
member of the Credit Group to: 
  
 SECTION 5.1. Financial
Statements and Reports. Furnish or cause to be furnished to the Administrative Agent and each of the Lenders: 
  
 (a) Within one hundred twenty (120) days after the end of each fiscal year of the Parent commencing with the fiscal year ending July 31, 2005, the audited
combined balance sheet of the Credit Group as at the end of, and the related combined statements of income, stockholders’ equity and cash flows for, such fiscal year, and commencing with the fiscal year ending July 31, 2006, the corresponding
figures as at the end of, and for, the preceding fiscal year, accompanied by an unqualified report and opinion of Ernst & Young LLP or such other independent public accountants of nationally recognized standing as shall be retained by the Parent
and be reasonably satisfactory to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards relating to reporting and which report and opinion shall contain no material exceptions or
qualifications except for qualifications relating to accounting changes (with which such independent public accountants concur) in response to FASB releases or other authoritative pronouncements, together with a 
  

 52 

 certificate signed by an Authorized Officer of the Borrower, to the effect that such financial statements fairly present
the financial position of the Credit Group as at the dates indicated and the results of their operations for the periods indicated in conformity with GAAP; 
  
 (b) Within sixty (60) days after the end of each of the first three fiscal quarters of each of fiscal year of the Parent, commencing with the fiscal
quarter ending April 30, 2005, the unaudited combined balance sheet of the Credit Group and the related unaudited combined statements of income, stockholders’ equity and cash flows for, such fiscal quarter, and for the portion of the fiscal
year through the end of such fiscal quarter and, commencing with the fiscal quarter ending July 31, 2005, the corresponding figures, all as at the end of such quarter, and for the corresponding period, in the preceding fiscal year, together with a
certificate signed by an Authorized Officer of the Borrower (and in the case of the fiscal quarter ending April 30, 2005, an Authorized Officer of the Parent), to the effect that such financial statements, while not examined by independent public
accountants, reflect, in the opinion of the Borrower or the Parent, as applicable, all adjustments necessary to present fairly in all material respects the financial position of the Credit Group as at the end of the fiscal quarter and the results of
operations for the quarter then ended in conformity with GAAP, subject to normal year-end audit adjustments and the absence of footnotes; 
  
 (c) Simultaneously with the delivery of the statements referred to in paragraphs (a) and (b) of this Section 5.1, combined statements of receivables
aging, bad debt experience, returns and concentrations of account debtors in form satisfactory to the Administrative Agent; provided, however, the Borrower shall not be obligated to deliver statements pursuant to this Section 5.1(c)
for account debtors under the Fox Agreement unless and until such statements shall have been delivered by Fox to the Borrower; 
  
 (d) Simultaneously with delivery of financial statements required under Section 5.1(a) above, a copy of the annual Business Plan for each of the Borrower,
Manga, New Arc and the Credit Group; 
  
 (e) Simultaneously
with the delivery of the statements referred to in paragraphs (a) and (b) of this Section 5.1, a certificate of an Authorized Officer of the Borrower or Parent, as applicable, in form and substance reasonably satisfactory to the Administrative Agent
(i) stating whether or not such Authorized Officer has knowledge, after due inquiry, of any condition or event which would constitute an Event of Default or Default and, if so, specifying each such condition or event, the nature thereof and any
action taken or proposed to be taken with respect thereto, (ii) demonstrating in reasonable detail compliance with the provisions of Sections 6.10, 6.14, 6.15, 6.16, 6.17, and 6.18 hereof and including supporting schedules, (iii) certifying that all
filings required under Section 5.7 hereof have been made and listing each such filing that has been made since the date of the last certificate delivered in accordance with this Section 5.1(e), (iv) stating whether any change in GAAP or in the
application thereof has occurred since the date of the most recent audited financial statements delivered to the Administrative Agent hereunder (but until the delivery of any audited financial statements hereunder, since the date of the unaudited
financial statements referred to in Section 3.5) and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate, (v) identifying all Subsidiaries existing on the date of such
certificate and indicating, for each such Subsidiary, whether such Subsidiary was formed or 
  

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 acquired since the end of the previous fiscal quarter, (vi) identifying any changes of the type described in Section 6.9
that have not been previously reported by a Credit Party, and (vii) identifying any events which give rise to an obligation by the Borrower hereunder to prepay all or any portion of the Loans or cash collateralize any Letters of Credit that have
occurred since the end of the previous fiscal quarter and setting forth a reasonably detailed calculation of the amount of such prepayment obligation or cash collateralization; 
  
 (f) Within 10 Business Days of receipt thereof by a Credit Party, copies of all management letters issued to such Person by
its auditors; 
  
 (g) Promptly upon their becoming available,
copies of (i) all registration statements, proxy statements, notices and reports any Credit Party shall file with any securities exchange or with the Securities and Exchange Commission or any successor agency, if any, and (ii) all reports, financial
statements, press releases and other information which any Credit Party shall release, send or make available to its common stockholders generally; 
  
 (h) From time to time such information as may be required to keep current each of the Schedules attached to this Credit Agreement; provided, that
none of the Schedules hereto may be amended without the prior written consent of the Administrative Agent in its sole discretion except for Schedules 3.1, 3.7(a), 3.7(b), 3.8(a), 3.8(b), 3.11 and 3.18; 
  
 (i) Simultaneously with delivery of financial statements required under
Section 5.1(a) and (b) above and not more than five (5) business days prior to the issuance of any dividend permitted under Section 6.5(c) hereof, a certificate signed by an Authorized Officer of the Borrower or the Parent, as applicable,
demonstrating (A) for the Credit Group all projected cash sources (including cash on hand and borrowings under the Credit Agreement (taking into account projected Maximum Allowable Outstanding Amount available hereunder), cash receipts from
operations and overhead reimbursements) shall exceed all projected known cash uses (including debt service, amounts to be spent to acquire film inventory, print and advertising expenses, overhead and all other cash expenditures), and (B) (w)
including cash flow projections for the ensuing four quarters (such projections to be prepared in the same format as the projections set forth on Schedule 5.1(i) hereto), (x) showing sources and uses on a quarterly basis supported by such
projections, (y) showing anticipated Maximum Allowable Outstanding Amount availability sufficient to support Borrowings hereunder, and (z) stating that the projections attached thereto were prepared in good faith based upon reasonable assumptions,
all as determined as of each quarter end and as projected in good faith for the ensuing twenty-four (24) months; 
  
 (j) Simultaneously with delivery of financial statements required under Section 5.1(a) and (b) above, a report by management outlining the financial
condition and results of operations of the Credit Group, in a form reasonably acceptable to the Administrative Agent in its sole discretion; 
  
 (k) Promptly upon request therefor, any information required by the Administrative Agent, the Issuing Bank or any Lender under or in connection with the
USA Patriot Act; and 
  

 54 

 (l) From time to time such additional information regarding the financial condition or business of any
member of the Credit Group, any Item of Product, any Distribution Agreement or the Collateral, as the Administrative Agent or any Lender acting through the Administrative Agent may reasonably request. 
  
 SECTION 5.2. Corporate Existence; Compliance with Laws. Do or cause to
be done all things necessary (i) to preserve, renew and keep in full force and effect its legal existence, rights, licenses, permits and franchises and (ii) to comply with all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, any Governmental Authority, except (a) as otherwise permitted under Section 6.6 or (b) in the case of clause (ii) only, where the failure to do so could not reasonably be expected to result in a Material Adverse
Effect. 
  
 SECTION 5.3. Maintenance of Properties. Keep
its tangible properties which are material to its business in good repair, working order and condition (ordinary wear and tear excepted) and, from time to time (i) make (or cause to be made) all necessary and proper repairs, renewals, replacements,
additions and improvements thereto, and (ii) comply at all times with the provisions of all material leases and other material agreements to which it is a party so as to prevent any loss or forfeiture thereof or thereunder unless compliance
therewith is being currently contested in good faith by appropriate proceedings and appropriate reserves have been established in accordance with GAAP; provided, however, that nothing in this Section 5.3 shall prevent any member of the
Credit Group from discontinuing the use, operation or maintenance of such properties or disposing of them subject to the prior written consent of the Administrative Agent in its sole discretion (which consent shall not be unreasonably withheld) if
(x) such discontinuance or disposal is, in the reasonable judgment of the governing body of such member of the Credit Group, desirable in the conduct of the business, and (y) such discontinuance or disposal will could not reasonably be expected to
result in a Material Adverse Effect. 
  
 SECTION 5.4. Notice of
Material Events. 
  
 (a) Promptly upon any executive officer
of any Credit Party obtaining knowledge of (i) any Default or Event of Default, (ii) any material adverse change in the financial condition or operations of any member of the Credit Group, (iii) any action or event which could reasonably be expected
to materially and adversely affect the performance of the Credit Parties’ obligations under this Credit Agreement or any other Fundamental Document, the repayment of the Notes or the security interests granted to the Administrative Agent for
the benefit of the Administrative Agent, the Issuing Bank or the Lenders under this Credit Agreement or any other Fundamental Document, (iv) any other event which could reasonably be expected to result in a Material Adverse Effect, (v) the opening
of any office of any member of the Credit Group or the change of the executive office or the principal place of business of any member of the Credit Group or of the location of any member of the Credit Group’s books and records with respect to
the Collateral, (vi) any change in the name or jurisdiction of organization of any member of the Credit Group, (vii) any other event which could reasonably be expected to materially and adversely impact upon the amount or collection of accounts
receivable of the Credit Parties or otherwise materially decrease the value of the Collateral or the Pledged Securities, (viii) any proposed material amendment to any agreements that are part of the Collateral, or (ix) any Person giving any notice
to any Credit Party or taking any other action to 
  

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 enforce remedies with respect to a claimed default or event or condition of the type referred to in paragraph (g) or (h)
of Article 7, such Credit Party shall promptly give written notice thereof to the Administrative Agent specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken by such Person and
the nature of such claimed Event of Default or condition and what action any member of the Credit Group has taken, is taking and proposes to take with respect thereto. 
  
 (b) Promptly upon any Authorized Officer of any Credit Party obtaining knowledge of (i) the institution of, or threat of,
any action, suit, proceeding, investigation or arbitration by any Governmental Authority or other Person against or affecting any material portion any member of the Credit Group’s assets or any Item of Product, (ii) the institution of, or
threat of, any action, suit, proceeding, investigation or arbitration by any Governmental Authority or other Person against or affecting any member of the Credit Group or any of their respective properties or rights which, if adversely determined,
could be reasonably expected to result in a Material Adverse Effect, or (iii) any material development in any such action, suit, proceeding, investigation or arbitration (whether or not previously disclosed to the Lenders) which, if decided
adversely, could reasonably be expected to result in a Material Adverse Effect, such member of the Credit Group shall promptly give written notice thereof to the Administrative Agent and provide such other information as may be available to it to
enable the Lenders to evaluate such matters; and, in addition to the requirements set forth in clauses (i), (ii) and (iii) of this subsection (b), such member of the Credit Group upon request shall promptly give notice of the status of any action,
suit, proceeding, investigation or arbitration covered by a report delivered to the Lenders pursuant to clause (i), (ii) or (iii) above to the Lenders and provide such other information as may be reasonably requested and available to it to enable
the Lenders to evaluate such matters. 
  
 SECTION 5.5.
Insurance. 
  
 (a) Keep its assets which are of an
insurable character insured (to the extent and for the time periods consistent with customary industry standards) by financially sound and reputable insurers against loss or damage by fire, explosion, theft or other hazards which are included under
extended coverage in amounts not less than the insurable value of the property insured or such lesser amounts, and with such self-insured retention or deductible levels, as are consistent with normal industry standards. 
  
 (b) Maintain with financially sound and reputable insurers, insurance against
other hazards and risks and liability to Persons and property to the extent and in the manner consistent with or customary standards. 
  
 (c) Maintain, or cause to be maintained, in effect during the period from the commencement of production of each Item of Product produced by any member of
the Credit Group or from the date of acquisition of each Item of Product acquired by any member of the Credit Group, through the third anniversary of the date on which such Item of Product is Completed and as otherwise required by applicable
contracts, a so-called “Errors and Omissions” policy covering all such Items of Product, and cause such Errors and Omissions policy to provide coverage to the extent and in such manner as is customary for Items of Product of like type but,
at minimum, to the extent and in such manner as is required under all applicable contracts relating thereto. 
  

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 (d) Maintain, or cause to be maintained, in effect during the period from the commencement of production
of each Item of Product produced by any member of the Credit Group, (i) until such time as the Administrative Agent shall have been provided with satisfactory evidence of the existence of one negative or master tape in one location and an
interpositive, internegative or duplicate master tape in another location of the final version of the Completed Item of Product, insurance on the negatives and sound tracks or master tapes of such Item of Product in such amounts and in such manner
as is consistent with customary industry standards for similar Items of Product, and (ii) until production of such Item of Product has been concluded, a cast insurance policy with respect to such Item of Product, which provides coverage to the
extent and in such manner as is customary for Items of Product of a like type, but at minimum, to the extent required under all applicable contracts relating thereto. 
  
 (e) Maintain, or cause to be maintained, in effect distributor’s “Errors and Omissions” insurance to the
extent and in amounts consistent with or customary industry standards. 
  
 (f) In the case of the Credit Parties, cause all such above-described insurance (excluding worker’s compensation insurance) to: (i) provide for the benefit of the Lenders that 30 days’ prior written notice of cancellation,
termination, non-renewal or lapse or material change of coverage shall be given to the Administrative Agent; (ii) name the Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank and the Lenders as a loss payee (except for
“Errors and Omissions” insurance and other third party liability insurance); provided, however, that production insurance recoveries received prior to Completion or abandonment of an Item of Product may be utilized to finance
the production of such an Item of Product, and; provided, further, that so long as no Event of Default has occurred or is continuing, property insurance proceeds may be used to repair damage in respect of which such proceeds were
received; and (iii) to the extent that none of the Administrative Agent, the Issuing Bank and the Lenders shall be liable for premiums or calls, name the Administrative Agent (for the benefit of the Administrative Agent, the Issuing Bank and the
Lenders) as additional insureds including, without limitation, under any “Errors and Omissions” policy. 
  
 (g) Render to the Administrative Agent upon the request of the Administrative Agent a broker’s report in form and substance reasonably satisfactory
to the Administrative Agent as to all such insurance coverage including such detail as the Administrative Agent may reasonably request. 
  
 SECTION 5.6. Music. With respect to any Item of Product produced by a member of the Credit Group, when an Item of Product has been scored, if
requested by the Administrative Agent, deliver to the Administrative Agent within a reasonable period of time after such request (a) written evidence of the music synchronization rights, if any, obtained from the composer or the licensor of the
music, and (b) copies of all music cue sheets with respect to such Item of Product. 
  

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 SECTION 5.7. Copyrights and Trademarks. 
  
 (a) Within thirty (30) days after the initial release or
broadcast of each Item of Product, to the extent any member of the Credit Group is or becomes the copyright proprietor thereof or otherwise acquires a copyrightable interest therein, or any member of the Credit Group acquires any trademark, service
mark, trade name or service name, take any and all actions necessary to register the copyright for such Item of Product or such trademark, service mark, trade name or service name, in the name of such member of the Credit Group subject, in the case
of the Credit Parties, to a Lien in favor of the Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders pursuant to the Copyright Security Agreement and the Trademark Security Agreement) in conformity with the laws of the
United States of America and such other jurisdictions as the Administrative Agent may reasonably specify, and promptly deliver to the Administrative Agent (x) written evidence of the registration of any and all such copyrights for inclusion in the
Collateral under this Credit Agreement, and (y) a Copyright Security Agreement Supplement or a Trademark Security Agreement relating to such item or such trademark, service mark, trade name or service name, executed by such Credit Party. 

 
 (b) Obtain instruments of transfer or other documents evidencing the
interest of any member of the Credit Group with respect to the copyright relating to Items of Product in which such member of the Credit Group is not entitled to be the initial copyright proprietor and any trademark, service mark, trade name or
service name which such member of the Credit Group acquires, and promptly record if such interest may be registered with the United States Copyright Office, the United States Trademark Office or such other jurisdictions, such instruments of transfer
on the United States Copyright Register or the United States Trademark Register and such other jurisdictions as the Administrative Agent may reasonably specify. 
  

SECTION 5.8. Books and Records, Examination. 
  
 (a) Maintain or cause to be maintained at all times true and complete books and records of its financial operations and provide the Administrative Agent
and its representatives (and after the occurrence and during the continuance of an Event of Default and with reasonable coordination, the Lenders and their representatives) access to such books and records and to any of its properties or assets upon
reasonable notice and during regular business hours in order that the Administrative Agent (and the Lenders, if applicable) may make such audits and examinations and make abstracts from such books, accounts, records and other papers pertaining to
the Collateral and upon notification to the Credit Parties, permit the Administrative Agent or its representatives (and after the occurrence and during the continuance of an Event of Default and with reasonable coordination, the Lenders and their
representatives) to discuss the affairs, finances and accounts with, and be advised as to the same by, officers and independent accountants, all as the Administrative Agent (or the Lenders, if applicable) may deem appropriate for the purpose of
verifying the accuracy of the each report delivered by any Credit Party to the Administrative Agent and/or the Lenders pursuant to this Credit Agreement or for otherwise ascertaining compliance with this Credit Agreement or any other Fundamental
Document. 
  
 (b) If, at any time when an Event of Default is not
in existence, the Administrative Agent wishes to confirm with account debtors and other payors the amounts and terms of any or all receivables, the Administrative Agent will so notify the Credit Parties. The Administrative Agent agrees to have such
confirmation made through the Credit Parties’ 
  

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 auditors. If for any reason such auditors fail to proceed with the confirmations, the Administrative Agent may proceed to
make such confirmations directly with account debtors and other payors after prior written notice to the Borrower. Each of the Credit Parties hereby agrees that, upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall be entitled to confirm directly with account debtors and other payors, the amounts and terms of all accounts receivable. 
  
 SECTION 5.9. Third Party Audit Rights. Promptly notify the Administrative Agent of, and at all times allow the Administrative Agent access to the
results of, all audits conducted by any member of the Credit Group of any third party licensee, partnership or joint venture under any agreement with respect to any Item of Product included in the Collateral. The Credit Parties will exercise their
audit rights with respect to any such third party licensees, partnerships and joint ventures upon the reasonable request of the Administrative Agent to the extent that the Credit Parties shall have the right to conduct such audits. After an Event of
Default has occurred and is continuing, the Administrative Agent shall have the right to exercise directly or through any Credit Party, such Credit Party’s right to audit any obligor under an agreement with respect to any Item of Product
included in the Collateral. 
  
 SECTION 5.10. Observance of
Agreements. Duly observe and perform all material terms and conditions of all material agreements with respect to the exploitation of Items of Product and diligently protect and enforce the rights of the Credit Group under all such agreements in
a manner consistent with prudent business judgment and subject to the terms and conditions of such agreements as from time to time in effect. 
  
 SECTION 5.11. Laboratories; No Removal. 
  
 (a) To the extent any member of the Credit Group has control over, or rights to receive, any of the Physical Materials relating to any Item of Product,
deliver or cause to be delivered to a Laboratory or Laboratories all negative and preprint material, master tapes and all sound track materials with respect to each such Item of Product and, in the case of the Credit Parties, deliver to the
Administrative Agent a fully executed Pledgeholder Agreement with respect to such materials. To the extent that any Credit Party has only rights of access to preprint material or master tapes and has not created duplicate materials sufficient to
exploit its rights and has not stored such duplicate materials at a Laboratory that has delivered a Pledgeholder Agreement to the Administrative Agent, then the applicable Credit Party will deliver to the Administrative Agent a fully executed
Laboratory Access Letter covering such materials. In the case of the Credit Parties, prior to requesting any such Laboratory to deliver any negative or other preprint or sound track material or master tapes to another Laboratory, such Credit Party
shall provide the Administrative Agent with a Pledgeholder Agreement or Laboratory Access Letter, as appropriate, executed by such other Laboratory and all other parties to such Pledgeholder Agreement (including the Administrative Agent). Each
Credit Party hereby agrees not to deliver or remove or cause the delivery or removal of the original negative and film or sound materials or master tapes with respect to any Item of Product owned by any member of the Credit Group or in which any
member of the Credit Group has an interest to a location outside the United States of America, Canada or the United Kingdom. 
  

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 (b) During production of any Item of Product produced by any member of the Credit Group, such member of
the Credit Group shall promptly deliver the daily rushes for such Item of Product to the appropriate Laboratory as soon as reasonably practicable and, in any event, no less frequently than weekly. 
  
 (c) With respect to Items of Product Completed after the Closing Date,
promptly after Completion, deliver to the Administrative Agent and the Laboratories which are signatories to Pledgeholder Agreements a revised schedule of Items of Product on deposit with such Laboratories to the extent applicable. 
  
 SECTION 5.12. Taxes and Charges; Indebtedness in Ordinary Course of
Business. Duly pay and discharge, or cause to be paid and discharged, before the same shall become in arrears (after giving effect to applicable extensions), all material taxes, assessments, levies and other governmental charges, imposed upon
any member of the Credit Group or its properties, sales and activities, or any part thereof, or upon the income or profits therefrom, as well as all claims for labor, materials, or supplies which if unpaid might by law become a Lien (other than a
Permitted Encumbrance) upon any property of any member of the Credit Group except for any such amounts which if unpaid, individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect; provided,
however, that any such tax, assessment, levy or charge need not be paid if the validity or amount thereof shall currently be contested in good faith by appropriate proceedings and if such member of the Credit Group shall have set aside on its
books reasonable reserves (the presentation of which is segregated to the extent required by GAAP) adequate with respect thereto if reserves shall be deemed necessary; and provided, further, that such member of the Credit Group will
pay all such taxes, assessments, levies or other governmental charges forthwith upon the commencement of proceedings to foreclose any Lien which may have attached as security therefor or post a bond or other security therefor. Each member of the
Credit Group will promptly pay when due, or in conformance with customary trade terms, all other indebtedness incident to its operations. 
  
 SECTION 5.13. Liens. Defend the Collateral (including, without limitation, the Pledged Securities) against any and all Liens howsoever arising,
other than Permitted Encumbrances, and in any event defend against any attempted foreclosure. 
  
 SECTION 5.14. Further Assurances; Security Interests. 
  
 (a) Upon the reasonable request of the Administrative Agent, duly execute and deliver, or cause to be duly executed and delivered, at the cost and expense of the Credit Parties, such further instruments as may be
necessary or desirable in the reasonable judgment of the Administrative Agent to carry out the provisions and purposes of this Credit Agreement and the other Fundamental Documents. 
  
 (b) Upon the reasonable request of the Administrative Agent, promptly execute and deliver or cause to be executed and
delivered, at the cost and expense of the Credit Parties, such further instruments as may be appropriate in the reasonable judgment of the Administrative Agent, to provide the Administrative Agent for the benefit of the Administrative Agent, the
Issuing Bank and the Lenders a first perfected Lien in the Collateral (subject to Permitted Encumbrances) and any and all documents (including, without limitation, the 
  

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 execution, amendment or supplementation of any financing statement and continuation statement or other statement) for
filing under the provisions of the UCC and the rules and regulations thereunder, or any other Applicable Law, and perform or cause to be performed such other ministerial acts which are reasonably necessary or advisable, from time to time, in order
to grant and maintain in favor of the Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders the security interest in the Collateral contemplated hereunder and under the other Fundamental Documents, subject only to
Permitted Encumbrances. 
  
 (c) Promptly undertake to deliver or
cause to be delivered to the Administrative Agent, the Issuing Bank and the Lenders from time to time such other documentation, consents, authorizations and approvals in form and substance reasonably satisfactory to the Administrative Agent, as the
Administrative Agent shall deem reasonably necessary or advisable to perfect or maintain the Liens of the Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders. 
  
 SECTION 5.15. ERISA Compliance and Reports. Furnish to the Administrative Agent (a) as soon as possible, and in any
event within thirty (30) days after any executive officer of a Credit Party has knowledge that (i) any Reportable Event with respect to any Plan has occurred, a statement of an executive officer of the Credit Party, setting forth on behalf of such
Credit Party details as to such Reportable Event and the action which it proposes to take with respect thereto, together with a copy of the notice, if any, required to be filed of such Reportable Event given to the PBGC, or (ii) an accumulated
funding deficiency has been incurred or an application has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard or an extension of any amortization period under Section 412 of the Code with respect
to a Plan, a Plan or Multiemployer Plan has been or is proposed to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA, proceedings have been instituted to terminate a Plan, a proceeding has been instituted pursuant
to Section 515 of ERISA to collect a delinquent contribution to a Multiemployer Plan, or any such Credit Party or ERISA Affiliate will incur any material liability (including any contingent or secondary liability) to or on account of the termination
of or withdrawal from a Plan or Multiemployer Plan under Sections 4062, 4063, 4201 or 4204 of ERISA, a statement of an executive officer of the Credit Party, setting forth details as to such event and the action the applicable Credit Party proposes
to take with respect thereto, (b) promptly upon reasonable request of the Administrative Agent, copies of each annual and other report with respect to each Plan subject to Title IV of ERISA and (c) promptly after receipt thereof, a copy of any
notice any Credit Party or ERISA Affiliate may receive from the PBGC relating to the PBGC’s intention to terminate any Plan or to appoint a trustee to administer any Plan. 
  
 SECTION 5.16. Environmental Laws. 
  
 (a) Promptly notify the Administrative Agent upon an executive officer of any member of the Credit Group becoming aware of
any violation or potential violation or non-compliance with, or liability or potential liability under any Environmental Laws which, when taken together with all other pending violations could reasonably be expected to have a Material Adverse
Effect, and promptly furnish to the Administrative Agent all notices of any nature which any member of the Credit Group may receive from any Governmental Authority or other Person with respect to any violation, or potential violation or
non-compliance with, or 
  

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 liability or potential liability under any Environmental Laws which, in any case or when taken together with all such
other notices, could reasonably be expected to have a Material Adverse Effect. 
  
 (b) Comply with and use reasonable efforts to ensure compliance by all tenants and subtenants with all Environmental Laws, and obtain and comply in all respects with and maintain and use best efforts to ensure that
all tenants and subtenants obtain and comply in all respects with and maintain any and all licenses, approvals, registrations or permits required by Environmental Laws, except where failure to do so could not have a Material Adverse Effect.

  
 (c) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under all Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities, except where failure to do so could
not have a Material Adverse Effect. Any order or directive whose lawfulness is being contested in good faith by appropriate proceedings shall be considered a lawful order or directive when such proceedings, including any judicial review of such
proceedings, have been finally concluded by the issuance of a final non-appealable order; provided, however, that the appropriate member of the Credit Group shall have set aside on its books reasonable reserves (the presentation of
which is segregated to the extent required by GAAP) adequate with respect thereto if reserves shall be deemed necessary. 
  
 (d) Defend, indemnify and hold harmless the Administrative Agent, the Issuing Bank and the Lenders, and their respective employees, agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way related to the violation of
or non-compliance by any member of the Credit Group with any Environmental Laws, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney and consultant fees,
investigation and laboratory fees, court costs and litigation expenses, but excluding therefrom all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses arising out of or resulting from (i) the gross negligence or
willful acts or willful misconduct of any indemnified party, (ii) any claims, demand, penalties, fines, liabilities, settlements, damages, costs and expenses against an indemnified party by any member of the Credit Group in which (but only to the
extent that) such member of the Credit Group is the prevailing party or (iii) any acts or omissions of any indemnified party occurring after any indemnified party is in possession of, or controls the operation of, any property or asset. 

 
 SECTION 5.17. Use of Proceeds. Use the proceeds of the Loans and
the Letters of Credit, to (i) to fund secured loans to be made by the Borrower to Manga and New Arc, (ii) on the Closing Date, to pay a dividend to Parent of up to $25,000,000, (iii) to pay certain other dividends from time to time to the extent
permitted hereunder and (iv) for general working capital purposes. 
  
 SECTION 5.18. Distribution Agreements, Letters of Credit, Etc. 
  
 (a) Promptly upon receipt thereof, deliver to the Administrative Agent to be held as part of the Collateral, a copy of all letters of credit (including any amendments thereto) 
  

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 which are received by a Credit Party (whether pursuant to a Distribution Agreement or otherwise) after the date hereof
and provide the Administrative Agent access to the originals of all such letters of credit. 
  
 (b) Furnish to the Administrative Agent, concurrently with the delivery of each quarterly compliance certificate, (i) a list in the form of Schedule 3.17 hereto of all material Distribution Agreements executed
during the preceding quarter and all material amendments to existing Distribution Agreements which amendments were executed during the preceding quarter, and (ii) copies of all Notices of Assignment and Irrevocable Instructions (as required by
Section 8.3 hereof) executed during the preceding quarter. 
  
 (c)
From time to time (i) furnish to the Administrative Agent such information and reports regarding the Distribution Agreements (for which amounts payable by or to a member of the Credit Group exceed $2,500,000 over the term of such Distribution
Agreement) to which any member of the Credit Group is a party as the Administrative Agent may reasonably request, and (ii) upon the occurrence and during the continuation of an Event of Default and the reasonable request of the Administrative Agent,
make to the other parties to a Distribution Agreement to which any member of the Credit Group is a party such demands and requests for information and reports or for action as such member of the Credit Group is entitled to make under each such
Distribution Agreement. 
  
 (d) Take all action on its part to be
performed necessary to effect timely payments under all letters of credit, including, without limitation, timely preparation, acquisition and presentation of all documents, drafts or other instruments required to effect payment thereunder.

  
 SECTION 5.19. Location of Production Accounts. Promptly
inform the Administrative Agent of the location of the Production Account for each Item of Product produced by a Credit Party. 
  
 SECTION 5.20. Performance of Obligations. 
  
 (a) Duly observe and perform all material terms and conditions of all production services agreements with respect to an item of Product to which a member
of the Credit Group is a party, the Distribution Agreements, all agreements that are included in the chain of title for an item of Product to which a member of the Credit Group is a party and all other material agreements with respect to the
production, development and/or exploitation of an item of Product to which a member of the Credit Group is a party and diligently protect and enforce the rights of any member of the Credit Group under all such agreements in a manner consistent with
prudent business judgment. 
  
 SECTION 5.21. Indebtedness.
Furnish to the Administrative Agent copies of all material debt instruments or other evidence of Indebtedness incurred by any member of the Credit Group. 
  
 SECTION 5.22. Subsidiaries. Prior to commencement of operations of any new Subsidiary of a Credit Party, the Credit Parties shall cause such new
Subsidiary to deliver to the Administrative Agent: (x) with respect to each such Subsidiary that is not a Controlled Foreign 
  

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 Subsidiary, (i) an Instrument of Assumption and Joinder duly executed by such Subsidiary, (ii) an appropriate UCC-1
financing statement for such Subsidiary, (iii) to the extent that 100% of the Equity Interests of such Subsidiary have not previously been pledged to the Administrative Agent (for the benefit of the Issuing Bank and the Lenders), an executed pledge
agreement and the certificates representing 100% of the Equity Interests of such Subsidiary together (in the case of Pledged Securities comprising capital stock) with undated stock powers executed in blank, as applicable, or any comparable documents
for non-corporate entities, and (iv) organizational documents to the extent set forth in Section 4.1 hereof; and (y) with respect to each such Subsidiary that is a Controlled Foreign Subsidiary, (i) to the extent that 66% of the Equity Interests of
such Subsidiary have not previously been pledged to the Administrative Agent (for the benefit of the Issuing Bank and the Lenders), an executed pledge agreement and the certificates representing 66% of the Equity Interests of such Subsidiary
together (in the case of Pledged Securities comprising capital stock) with undated stock powers executed in blank, as applicable, or any comparable documents for non-corporate entities and (ii) organizational documents to the extent set forth in
Section 4.1 hereof. 
  
 SECTION 5.23. Fiscal Year End. For
any member of the Credit Group with a fiscal year end of other than July 31, within 30 days after the Closing Date change its fiscal year end to July 31 in each year. 
  
 6. NEGATIVE COVENANTS 
  
 From the date hereof and for so long as the Commitments shall be in effect, any amount shall remain outstanding under any Note, any Letter of Credit shall
remain outstanding or any other Obligation shall remain unpaid or unsatisfied, each of the Credit Parties agrees that, unless the Required Lenders shall otherwise consent in writing, it will not and will not allow any of its Subsidiaries or any
other member of the Credit Group to: 
  
 SECTION 6.1.
Limitations on Indebtedness. Incur, create, assume or suffer to exist any preferred stock or Indebtedness or permit any partnership or joint venture in which any member of the Credit Group is a general partner to incur, create, assume or
suffer to exist any Indebtedness other than: 
  
 (a) the
Indebtedness represented by the Notes and the other Obligations; 
  
 (b) Guaranties permitted pursuant to Section 6.3 hereof; 
  
 (c) Indebtedness in respect of secured purchase money financing (including Capital Leases) to the extent permitted by Section 6.2(c), in an amount not to exceed $250,000 in the aggregate outstanding; 
  
 (d) unsecured liabilities for acquisition of rights or Items of Product and
trade payables incurred in the ordinary course of business and payable on normal trade terms and not otherwise prohibited hereunder; 
  
 (e) liabilities relating to net or gross profit participations and other contingent compensation, including royalties, deferments and guild residuals with
respect to the production, distribution, acquisition or other exploitation of Items of Product; 
  

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 (f) Indebtedness in respect of inter-company advances constituting Investments permitted under Section
6.4(c); 
  
 (g) Indebtedness in respect of loans from the Borrower
to Manga and New Arc, provided that such Indebtedness is (i) evidenced by promissory notes made by Manga and New Arc, as applicable, in favor of the Borrower, in form and substance acceptable to the Administrative Agent and pledged to the
Administrative Agent (on behalf of itself, the Lenders and the Issuing Bank) as security for the Obligations and (ii) secured by a Lien over all of the assets of Manga and New Arc, as applicable, in favor of the Borrower, and such Lien is assigned
to the Administrative Agent (on behalf of itself, the Lenders and the Issuing Bank) as security for the Obligations; 
  
 (h) existing Indebtedness listed on Schedule 6.1 hereto, and any extensions and renewals thereof which are approved by the Administrative Agent;

  
 (i) Subordinated Debt in an amount not to exceed $10,000,000
on such terms and conditions as are approved in advance by the Administrative Agent in writing in its sole discretion, which terms and conditions shall provide at a minimum, that such Subordinated Debt (i) is unsecured, (ii) is subordinated to the
Obligations (it being understood that such subordination terms may permit the payment of regularly scheduled interest payments if no Default or Event of Default is continuing at the time that such interest payment is to be paid or will result
therefrom) and (iii) has a maturity date not less than one year after the Maturity Date and does not provide for any earlier amortization; 
  
 (j) intercompany loans payable by a member of the Credit Group to IDT or any of its Affiliates for certain corporate allocations on behalf of such member
of the Credit Group in the ordinary course of business, provided that the expenditure by IDT or its Affiliate on behalf of such member of the Credit Group would be permitted to be incurred directly by such member of the Credit Group hereunder
and under the other Fundamental Documents; and 
  
 (k) other
Indebtedness not to exceed $1,000,000. 
  
 SECTION 6.2.
Limitations on Liens. Incur, create, assume or suffer to exist any Lien on any of its revenue stream, property or assets, whether now owned or hereafter acquired, except: 
  
 (a) the Liens of the Administrative Agent (for the benefit of the Administrative Agent, the Issuing Bank and the Lenders)
under this Credit Agreement, the other Fundamental Documents and any other document contemplated hereby or thereby; 
  
 (b) existing Liens listed on Schedule 6.2 hereof; 
  
 (c) purchase money Liens in connection with Capital Expenditures permitted pursuant to Section 6.10 hereof granted to the vendor or Person financing the
acquisition of property, plant or equipment if: (w) the Lien is limited to the particular assets acquired; (x) the Indebtedness secured by the Lien does not exceed the acquisition cost of the particular assets acquired; and (y) such transaction does
not otherwise violate this Credit Agreement; 
  

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 (d) Liens pursuant to written security agreements in favor of guilds which are required pursuant to
collective bargaining agreements on terms reasonably satisfactory to the Administrative Agent; 
  
 (e) deposits under worker’s compensation, unemployment insurance and social security and similar laws or to secure statutory obligations or surety, appeal, performance or other similar bonds (other than
completion bonds) or to secure performance as lessee under leases of real or personal property and other obligations of a like nature, in each case incurred in the ordinary course of business; 
  
 (f) Liens customarily granted or incurred in the ordinary course of business
with regard to goods provided or services rendered by laboratories and production houses, record warehouses, common carriers, landlords, warehousemen, mechanics and suppliers of materials and equipment; 
  
 (g) Liens arising out of attachments, judgments or awards as to which an
appeal or other appropriate proceedings for contest or review are timely commenced (and as to which foreclosure and other enforcement proceedings shall not have been commenced (unless fully bonded or otherwise effectively stayed)) and as to which
appropriate reserves have been established in accordance with GAAP; 
  
 (h) Liens for taxes, assessments or other governmental charges or levies the validity or amount of which is not yet due or is currently being contested in good faith by appropriate proceedings pursuant to the terms of Section 5.12 hereof;

  
 (i) possessory Liens (other than those of Laboratories and
production houses) which (i) occur in the ordinary course of business, (ii) secure normal trade debt which is not yet due and payable and (iii) do not secure Indebtedness; 
  
 (j) Liens arising by virtue of any statutory or common law provision relating to banker’s Liens, rights of setoff or
similar rights with respect to deposit accounts; 
  
 (k)
easements, rights of way, restrictions, minor defects or irregularities in title and other similar encumbrances on real property which do not in the reasonable opinion of the Administrative Agent materially detract from the value of the property
subject thereto, interfere with ordinary conduct of business of any member of the Credit Group or have a Material Adverse Effect; 
  
 (l) Liens in favor of licensees to secure their right to enjoy their licensed rights pursuant to Distribution Agreements entered into in the ordinary
course of business on terms reasonably satisfactory to the Administrative Agent; 
  
 (m) Liens in favor of a co-financier of an Item of Product, provided that such lien shall only secure the co-financier’s pro-rata share of any proceeds of the Item of Product; 
  
 (n) Liens to secure Indebtedness permitted under Section 6.1(c); 

 
 (o) Liens to secure transactions permitted under Section 6.8; 

 

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 (p) Liens in favor of completion guarantors in connection with Items of Product to secure the rights of
such completion guarantors to recoup their contributions to negative cost of such Items of Product, provided that such Liens are in form and substance reasonably satisfactory to the Administrative Agent; and 
  
 (q) Liens granted by Manga and New Arc, as applicable, in favor of the
Borrower to secure Indebtedness permitted under Section 6.1(g). 
  
 SECTION 6.3. Limitation on Guaranties. Incur, create, assume or suffer to exist any Guaranty (including any obligation as a general partner of a partnership or as a joint venturer of a joint venture in respect of Indebtedness of such
partnership or joint venture), either directly or indirectly, except: 
  
 (a) performance guarantees in the ordinary course of business under guild agreements, or to suppliers, licensees or laboratories which are providing services in connection with the production, acquisition, distribution or exploitation of
any Item of Product by or for a member of the Credit Group; 
  
 (b) the endorsement of negotiable instruments for deposit or collection in the ordinary course of business; 
  
 (c) the Guaranties made by the Guarantors pursuant to Article 9 hereof; 
  
 (d) existing Guaranties listed on Schedule 6.3 hereto and any extensions and renewals thereof acceptable to the
Administrative Agent; 
  
 (e) any Guaranty by the Borrower, Manga
UK, Manga or New Arc of the obligations of any of their respective Subsidiaries; and 
  
 (f) any Guaranty by Manga or New Arc of obligations incurred in connection with the creation or acquisition of an Item of Product that Manga or New Arc, as applicable, could have undertaken directly without violating
the terms of this Credit Agreement. 
  
 SECTION 6.4.
Limitations on Investments. Create, make or incur any Investment after the date hereof, except: 
  
 (a) the purchase of Cash Equivalents; 
  
 (b) Guaranties permitted under Section 6.3 to the extent constituting Investments; 
  
 (c) Investments by a Credit Party in any Subsidiary of such Credit Party; 
  
 (d) Investments constituting intercompany Indebtedness permitted under
Section 6.1(g); 
  

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 (e) Investments (including debt obligations) received in connection with the bankruptcy or reorganization
of suppliers, customers or other debtors or in settlement of delinquent obligations arising in the ordinary course of business; and 
  
 (f) other Investments approved by the Administrative Agent. 
  
 SECTION 6.5. Restricted Payments. Pay or declare or enter into any agreement to pay or otherwise become obligated to make any Restricted Payment,
other than: 
  
 (a) dividends or distributions payable solely in
additional shares of common stock of a Credit Party; 
  
 (b) on
the Closing Date, dividends of up to $25,000,000 in the aggregate to Parent; 
  
 (c) on July 31, 2005, and on each October 31, January 31, April 30 and July 31 thereafter, a dividend of up to $5,000,000 on each such date to Parent; provided that the Borrower has at least $10,000,000 of
aggregate availability under the Facility (i.e., unused Total Commitments against which it may then borrow after giving effect to all the terms of this Credit Agreement) plus cash or Cash Equivalents on the combined balance sheet as of such
date; 
  
 (d) payments to the Borrower, Manga UK, Manga or New
Arc; 
  
 (e) cash dividends by the Top-Tier Foreign Anchor Bay
Companies to the Parent, provided that the Parent contributes to the Borrower an amount in cash equal to the amount of such cash dividends simultaneously with the issuance of such cash dividends; 
  
 (f) cash dividends by a Second-Tier Foreign Anchor Bay Company to a Top-Tier
Foreign Anchor Bay Company; 
  
 (g) payments as part of customary
tax sharing arrangements; and 
  
 (h) to the extent permitted
under Section 14.16 hereof, payments with respect to intercompany Indebtedness, intercompany receivables or intercompany advances constituting Investments permitted under Section 6.4 hereof. 
  
 SECTION 6.6. Consolidation, Merger or Sale of Assets, etc. Whether in
one transaction or a series of transactions, wind up, liquidate or dissolve its affairs, or enter into any transaction of merger or consolidation, or sell or otherwise dispose of all or substantially all of its property, stock, Equity Interests or
assets or agree to do or suffer any of the foregoing, except that (x) any Credit Party may merge with and into, or transfer assets to, another Credit Party (including without limitation any Person which becomes a Guarantor immediately upon the
completion of such merger or transfer; provided, that at the time of such merger or transfer and after giving effect thereto no Default or Event of Default shall have occurred and be continuing) and (y) any Top-Tier Foreign Anchor Bay Company
may merge with and into, or transfer assets to, another Top-Tier Foreign Anchor Bay Company; provided, however, that, in the case of clause (x), if any such transaction involves the Borrower, then the Borrower must be the surviving
entity in each such transaction. 
  

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 SECTION 6.7. Receivables. Sell, discount or otherwise dispose of notes, accounts receivable or
other obligations owing to any member of the Credit Group except for the purpose of collection in the ordinary course of business. 
  
 SECTION 6.8. Sale and Leaseback. Enter into any arrangement with any Person or Persons, whereby in contemporaneous transactions any member of the
Credit Group sells essentially all of its right, title and interest in an Item of Product and acquires or licenses the right to distribute or exploit such Item of Product in media and markets accounting for substantially all the value of such Item
of Product, unless such arrangement does not impair the collateral position of the Administrative Agent, the Issuing Bank and the Lenders and is evidenced by documentation reasonably acceptable to the Administrative Agent. 
  
 SECTION 6.9. Places of Business; Change of Name, Jurisdiction. Change
the location of its chief executive office or principal place of business or any of the locations where it keeps any material portion of the Collateral or its books and records with respect to the Collateral or change its name or jurisdiction of
organization without in each case (i) giving the Administrative Agent ten (10) Business Days’ prior written notice of such change, and (ii) in the case of the Credit Parties, filing any additional Uniform Commercial Code financing statements,
and such other documents reasonably requested by the Administrative Agent to maintain perfection of the security interest of the Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank and the Lenders, in the Collateral.

  
 SECTION 6.10. Limitations on Capital Expenditures.
Make, or incur any obligation to make, Capital Expenditures (excluding items included in the cost of Items of Product, acquisition of licenses or masters development) for any fiscal year in excess of $500,000 in the aggregate. 
  
 SECTION 6.11. Transactions with Affiliates. Enter into any transaction
with any of its Affiliates unless such transaction (i) occurs in the ordinary course of business on an arm’s-length basis, (ii) is approved by the Administrative Agent (which such approval shall not be unreasonably withheld) or (iii) is
described on Schedule 6.11 hereto. 
  
 SECTION 6.12. Business
Activities. Engage in any business activities other than activities in which it is currently engaged. 
  
 SECTION 6.13. Fiscal Year End. Change its fiscal year end to other than July 31st, in each year. 
  
 SECTION 6.14. Overhead Expense. Permit aggregate consolidated overhead
expenses in any fiscal year to exceed the amount set forth below for such fiscal year: 
  

				
	 Fiscal Year

	  	Overhead Expense

	 2005
	  	$	20,000,000
	 2006
	  	$	25,000,000
	 2007
	  	$	26,000,000
	 2008
	  	$	27,000,000
	 2009
 and each fiscal year thereafter
	  	$	28,000,000

  

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 SECTION 6.15. Minimum Consolidated Tangible Net Worth. Permit the minimum Consolidated Tangible
Net Worth of the Credit Group to be less than (i) for the period from the Closing Date through July 31, 2005, $30,000,000 minus any dividends paid by a Credit Party on the Closing Date and (ii) in any fiscal year thereafter, $30,000,000
plus 50% of the Combined Net Income (without any deduction for losses) of the Credit Group for each fiscal year ended subsequent to the Closing Date minus any permitted dividends paid by a Credit Party on or subsequent to the Closing
Date. 
  
 SECTION 6.16. Cash Investment in Licenses, Masters or
Film. Permit aggregate consolidated cash investment in licenses, masters or films to exceed $50,000,000 in any fiscal year. 
  
 SECTION 6.17. Minimum Combined Operating Cash Flow. Maintain a combined Operating Cash Flow of the Credit Group in any fiscal year of less than the
amount set forth below for such fiscal year: 
  

				
	 Fiscal Year

	  	Minimum Combined
Operating Cash Flow

	 2005
	  	$	30,000,000
	 2006
	  	$	35,000,000
	 2007
	  	$	40,000,000
	 2008
 and each fiscal year thereafter
	  	$	45,000,000

  
 SECTION 6.18.
Maximum Allowable Outstanding Amount. Permit the Outstanding Amount at any time to exceed the amount set forth below during the applicable period: 
  

			
	 Period

	 	 Maximum Allowable Outstanding Amount

	 Closing Date through
 July 31, 2006
	 	 1.5 times Combined
 Operating Cash Flow for the
 last four fiscal quarters

		
	 August 1, 2006 through
 July 31, 2007
	 	 1.25 times Combined
 Operating Cash Flow for the
 last four fiscal quarters

		
	 August 1, 2007 through
 July 31, 2008
	 	 1.0 times Combined
 Operating Cash Flow for the
 last four fiscal quarters

		
	 August 1, 2008 through
 Maturity Date
	 	 0.5 times Combined
 Operating Cash Flow for the
 last four fiscal quarters

  

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 SECTION 6.19. Bank Accounts. After the date hereof, open or maintain any bank account other than
(a) accounts maintained at the Administrative Agent, (b) accounts maintained at a Lender or other financial institutions approved by the Administrative Agent (not to be unreasonably withheld) and listed on Schedule 6.19 hereof, or (c) a
Production Account, as to which the Administrative Agent shall have received notice, in the case of the Credit Parties, for which an Account Control Agreement has been delivered to the Administrative Agent. 
  
 SECTION 6.20. ERISA Compliance. Engage in a “prohibited
transaction”, as defined in Section 406 of ERISA or Section 4975 of the Code, with respect to any Plan or Multiemployer Plan or knowingly consent to any other “party in interest” or any “disqualified person”, as such terms
are defined in Section 3(14) of ERISA and Section 4975(e)(2) of the Code, respectively, engaging in any “prohibited transaction”, with respect to any Plan or Multiemployer Plan; or permit any Plan to incur any “accumulated funding
deficiency”, as defined in Section 302 of ERISA or Section 412 of the Code, unless such incurrence shall have been waived in advance by the Internal Revenue Service; or terminate any Plan in a manner which could result in the imposition of a
Lien on any property of any member of the Credit Group pursuant to Section 4068 of ERISA; or breach or knowingly permit any employee or officer or any trustee or administrator of any Plan to breach any fiduciary responsibility imposed under Title I
of ERISA with respect to any Plan; engage in any transaction which would result in the incurrence of a liability under Section 4069 of ERISA; or fail to make contributions to a Plan or Multiemployer Plan which could result in the imposition of a
Lien on any property of any member of the Credit Group pursuant to Section 302(f) of ERISA or Section 412(n) of the Code, if the occurrence of any of the foregoing events (alone or in the aggregate) would result in a liability which would be
reasonably likely to result in a Material Adverse Effect. 
  
 SECTION 6.21. Hazardous Materials. Except as set forth in Schedule 6.21, cause or permit any of its properties or assets to be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce
or process Hazardous Materials, except in compliance in all material respects with all applicable Environmental Laws, nor release, discharge, dispose of or permit or suffer any release or disposal as a result of any intentional act or omission on
its part of Hazardous Materials onto any such property or asset in violation of any Environmental Law, in each case, except where the same could not reasonably be expected to result in a Material Adverse Effect. 
  
 SECTION 6.22. Use of Proceeds of Loans. Use the proceeds of Loans
hereunder other than for the purposes set forth in, and as required by, Section 5.17 hereof. 
  
 SECTION 6.23. Swap Agreements. Enter into any Swap Agreement, except Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating
rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of a member of the Credit Group. 
  

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 SECTION 6.24. Subsidiaries. Acquire or create any new direct or indirect Subsidiary;
provided, however, that a Credit Party may incorporate additional Subsidiaries if (x) each such Subsidiary that is not a Controlled Foreign Subsidiary executes an Instrument of Assumption and Joinder whereby such Subsidiary becomes a
Credit Party hereunder, (y) the certificates representing 100% of the Equity Interests of each such Subsidiary that is not a Controlled Foreign Subsidiary become part of the Pledged Securities hereunder and are delivered to the Administrative Agent
together (in the case of Pledged Securities comprising capital stock) with appropriate stock powers for each such certificate executed in blank, and (z) the certificates representing 66% of the Equity Interests of each such Subsidiary that is a
Controlled Foreign Subsidiary become part of the Pledged Securities hereunder and are delivered to the Administrative Agent together (in the case of Pledged Securities comprising capital stock) with appropriate stock powers for each certificate
executed in blank. 
  
 SECTION 6.25. Modification of Material
Agreements. Make or permit to be made any modification to any of the material agreements, including without limitations those material agreements listed on Schedule 3.17, without the prior consent of the Administrative Agent if such modification
would reasonably be expected to result in a Material Adverse Effect. For the purposes of this Section 6.25, an agreement shall be deemed “material” if the Credit Parties reasonably expect that any member of the Credit Group would,
pursuant to the terms thereof, (A) recognize future revenues in excess of $2,500,000, (B) incur liabilities or obligations in excess of $2,500,000, or (C) likely suffer damages or losses in excess of $2,500,000 by reason of the breach or termination
thereof. 
  
 SECTION 6.26. No Negative Pledge. Enter
into any agreement (i) prohibiting the creation or assumption of any Lien in favor of the Administrative Agent (for the benefit of itself, the Issuing Bank and the Lenders) or any Person(s) refinancing the Facility upon the properties or assets of
any member of the Credit Group, whether now owned or hereafter acquired, or (ii) requiring an obligation to be secured as a result of any Lien being granted to the Administrative Agent (for the benefit of itself, the Issuing Bank and the Lenders),
except this Agreement and the other Fundamental Documents; provided, however, that this provision shall not apply to any agreement executed pursuant to Section 6.2(e) hereof to the extent of such assets. 
  
 7. EVENTS OF DEFAULT 
  
 In the case of the happening and during the continuance of any of the following events (herein called “Events of
Default”): 
  
 (a) any representation or
warranty made by the Parent, a Credit Party or TLL in this Credit Agreement or any other Fundamental Document to which it is a party or any statement or representation made by the Parent, a Credit Party or TLL in any report, financial statement,
certificate or other document furnished to the Administrative Agent, the Issuing Bank or any Lender pursuant to this Credit Agreement or any other Fundamental Document, shall prove to have been false or misleading in any material respect when made
or delivered; 
  

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 (b) default shall be made in the payment of principal of the Notes as and when due and
payable, whether by reason of maturity, mandatory prepayment, acceleration or otherwise; 
  
 (c) default shall be made in the payment of interest on the Notes, Commitment Fees or other monetary Obligations, when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise and such default shall continue unremedied for three Business Days; 
  
 (d) default shall be made in the due observance or
performance of any covenant, condition or agreement contained in Section 5.1(a), (b), (c), (d), (e), (f), (i) or (j), Section 5.4, Section 5.17 or Article 6 of this Credit Agreement; 
  
 (e) default shall be made by the Parent, any Credit Party or TLL in the due observance or performance of any
other covenant, condition or agreement to be observed or performed pursuant to the terms of this Credit Agreement or any other Fundamental Document, and such default shall continue unremedied for thirty (30) days after the Parent, the applicable
Credit Party or TLL (as applicable) receives written notice or obtains knowledge of such occurrence; 
  
 (f) default shall be made with respect to any payment of any Indebtedness of any member of the Credit Group (excluding Indebtedness
pursuant to Section 6.1(f)) in excess of $150,000 in the aggregate (other than the Obligations) or of the Parent in excess of $250,000 when due, or in the performance of any other obligation incurred in connection with any such Indebtedness if the
effect of such non-payment default is to accelerate the maturity of such Indebtedness or to permit the holder thereof to cause such Indebtedness to become due prior to its stated maturity and such default shall not be remedied, cured, waived or
consented to within the period of grace with respect thereto; 
  
 (g) IDT, the Parent, TLL or any member of the Credit Group shall generally not pay its debts as they become due or shall admit in writing its inability to pay its debts, or shall make a general assignment for the
benefit of creditors; or IDT, the Parent, TLL or any member of the Credit Group shall commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate it a bankrupt or insolvent or
seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors or seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any substantial part of its property or shall file an answer or other pleading in any such case, proceeding or other action admitting the material allegations of any petition, complaint or
similar pleading filed against it or consenting to the relief sought therein; or IDT, the Parent, TLL or any member of the Credit Group shall take any action to authorize, or in contemplation of, any of the foregoing; 
  
 (h) any involuntary case, proceeding or other action against
IDT, the Parent, TLL or any member of the Credit Group shall be commenced seeking to have an order 
  

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 for relief entered against it as debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its property, and such case, proceeding or other action (i) results in the entry of any order for relief against it, or (ii) shall remain undismissed for a period of sixty (60)
days; 
  
 (i) final judgment(s) for the payment
of money (x) in the case of any member of the Credit Group, in excess of $50,000 in the aggregate, and (y) in the case of the Parent in excess of $100,000 shall be rendered against any member of the Credit Group or the Parent, as applicable, and
within thirty (30) days from the entry of such judgment shall not have been discharged or stayed pending appeal or shall not have been discharged or bonded in full within thirty (30) days from the entry of a final order of affirmance on appeal;

  
 (j) (i) failure by any member of the Credit
Group or ERISA Affiliate to make any contributions required to be made to a Plan subject to Title IV of ERISA or Multiemployer Plan, (ii) any accumulated funding deficiency (within the meaning of Section 4971 of the Code) in excess of $100,000 shall
exist with respect to any Plan (whether or not waived), (iii) the present value of all benefits under all Plans subject to Title IV of ERISA (based on those assumptions used to fund such Plans) exceeds, in the aggregate, as of the last annual
valuation date applicable thereto, the actuarial value of the assets of such Plans allocable to such benefits, by an amount in excess of $1,000,000, (iv) any member of the Credit Group or ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred withdrawal liability to such Multiemployer Plan, or that a Multiemployer Plan is in reorganization or is being terminated, (iv) a Reportable Event with respect to a Plan shall have occurred, (vi) the
withdrawal by any member of the Credit Group or ERISA Affiliate from a Plan during a plan year in which it was a substantial employer (within the meaning of section 4001(a)(2) or 4062(e) of ERISA), (vii) the termination of a Plan, or the filing of a
notice of intent to terminate a Plan under section 4041(c) of ERISA, (viii) the institution of proceedings to terminate, or the appointment of a trustee with respect to, a Plan by the PBGC, (ix) any other event or condition which could constitute
grounds under section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (x) the imposition of a Lien pursuant to section 412 of the Code or section 302 of ERISA as to any Credit Party or ERISA
Affiliate; provided that with respect to items (iv) through (x), only if such event or condition would be reasonably likely to result in liability to any member of the Credit Group in excess of $1,000,000; 
  
 (k) this Credit Agreement, the Copyright Security Agreement,
any Copyright Security Agreement Supplement, any Trademark Security Agreement, any Pledgeholder Agreement, the Debenture, the Pledge Agreement or any Account Control Agreement (each a “Security Document”) shall, for any reason other
than the action or inaction of the Administrative Agent or any Lender, with respect to Collateral in excess of $100,000, not be or shall cease to be in full force and effect or shall be declared null and void or any of the Security Documents shall
not give or shall cease to give the Administrative Agent the 
  

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 Liens, rights, powers and privileges purported to be created thereby in favor of the Administrative Agent
for the benefit of the Administrative Agent, the Issuing Bank and the Lenders, superior to and prior to the rights of all third Persons and subject to no other Liens (other than Permitted Encumbrances), or the validity or enforceability of the
Guaranties under Article 9 hereof or the Liens granted, to be granted, or purported to be granted, by any of the Security Documents shall be contested by any member of the Credit Group or any of their respective Affiliates; 
  
 (l) a Change in Management shall occur; or 
  
 (m) a Change in Control shall occur; 
  
 then, in every such event and at any time thereafter during the continuance of such event,
the Administrative Agent may, or if directed by the Required Lenders, shall, take any or all of the following actions, at the same or different times: (x) terminate forthwith the Commitments, and/or (y) declare the principal of and the interest on
the Loans and the Notes and all other amounts payable hereunder or thereunder to be forthwith due and payable, whereupon the same shall become and be forthwith due and payable, without presentment, demand, protest, notice of acceleration or other
notice of any kind, all of which are hereby expressly waived, anything in this Credit Agreement or in the Notes to the contrary notwithstanding. If an Event of Default specified in paragraph (g) or (h) above shall have occurred, the Commitments
shall automatically terminate and the principal of, and interest on, the Loans and the Notes and all other amounts payable hereunder and thereunder shall automatically become due and payable without presentment, demand, protest, or other notice of
any kind, all of which are hereby expressly waived, anything in this Credit Agreement or the Notes to the contrary notwithstanding. Such remedies shall be in addition to any other remedy available to the Administrative Agent or the Lenders pursuant
to Applicable Law or otherwise. 
  
 8. GRANT OF SECURITY INTEREST; REMEDIES

  
 SECTION 8.1. Security Interests. The Borrower, as
security for the due and punctual payment of the Obligations (including interest accruing on and after the filing of any petition in bankruptcy or of reorganization of the Borrower whether or not post filing interest is allowed in such proceeding),
and each of the Guarantors, as security for its obligations under Article 9 hereof, hereby mortgage, pledge, assign, transfer, set over, convey and deliver to the Administrative Agent (for the benefit of the Administrative Agent, the Issuing Bank
and the Lenders) and grant to the Administrative Agent (for the benefit of the Administrative Agent, the Issuing Bank and the Lenders) a first priority security interest in the Collateral (subject to Permitted Encumbrances). 
  
 SECTION 8.2. Use of Collateral. So long as no Event of Default shall
have occurred and be continuing, and subject to the various provisions of this Credit Agreement and the other Fundamental Documents, a Credit Party may use its Collateral (including amounts held in the Collection Accounts) in any lawful manner
except as otherwise provided hereunder or thereunder. 
  

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 SECTION 8.3. Collection Accounts. 
  
 (a) The Credit Parties will maintain or establish one or more collection bank accounts (each, a “Collection
Account”) maintained at the office of the Administrative Agent, and will direct, by Notice of Assignment and Irrevocable Instructions, all Persons who become licensees, buyers or account debtors under receivables with respect to any Item of
Product included in the Collateral to make payments under or in connection with the license agreements, sales agreements or receivables directly to the Collection Account. Upon agreement between the Administrative Agent and the Credit Parties, the
Collection Account maintained by the Administrative Agent may also serve as the Cash Collateral Account; provided, that such Collection Account is in the name of the Administrative Agent (for the benefit of itself, the Issuing Bank and the
Lenders) and is under the sole dominion and control of the Administrative Agent. 
  
 (b) The Credit Parties will execute such documentation as may be required by the Administrative Agent in order to effectuate the provisions of this Section 8.3. 
  
 (c) In the event a Credit Party receives payment from any Person or proceeds
under a letter of credit or otherwise, which payment should have been remitted directly to the Collection Account, such Credit Party shall promptly remit such payment or proceeds to the appropriate Collection Account to be applied in accordance with
the terms of this Credit Agreement. 
  
 SECTION 8.4. Credit
Parties to Hold in Trust. Upon the occurrence and during the continuance of an Event of Default, each of the Credit Parties will, upon receipt by it of any revenue, income, profits or other sums in which a security interest is granted by this
Article 8, payable pursuant to any agreement or otherwise, or of any check, draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the sum or instrument in trust for the Administrative Agent (for
the benefit of itself, the Issuing Bank and the Lenders), segregate such sum or instrument from their own assets and forthwith, without any notice, demand or other action whatsoever (all notices, demands, or other actions on the part of the
Administrative Agent, the Issuing Bank or the Lenders being expressly waived), endorse, transfer and deliver any such sums or instruments or both, to the Administrative Agent to be applied to the repayment of the Obligations in accordance with the
provisions of Section 8.7 hereof. 
  
 SECTION 8.5. Collections,
etc. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, in its sole discretion, in its name (on behalf of the Administrative Agent, the Issuing Bank and the Lenders) or in the name of any Credit
Party or otherwise, demand, sue for, collect or receive any money or property at any time payable or receivable on account of or in exchange for, or make any compromise or settlement deemed desirable with respect to, any of the Collateral, but shall
be under no obligation to do so, or the Administrative Agent may extend the time of payment, arrange for payment in installments, or otherwise modify the terms of, or release, any of the Collateral, without thereby incurring responsibility to, or
discharging or otherwise affecting any liability of, any member of the Credit Group. The Administrative Agent will not be required to take any steps to preserve any rights against prior parties to the Collateral. If any Credit Party fails to make
any payment or take any action required hereunder, the Administrative Agent may make such payments and take all such actions as the Administrative Agent reasonably deems necessary to protect the 
  

 76 

 Administrative Agent’s (on behalf of the Administrative Agent, the Issuing Bank and the Lenders) security interests
in the Collateral and/or the value thereof, and the Administrative Agent is hereby authorized (without limiting the general nature of the authority hereinabove conferred) to pay, purchase, contest or compromise any Liens that in the judgment of the
Administrative Agent appear to be equal to, prior to or superior to the security interests of the Administrative Agent (on behalf of the Administrative Agent, the Issuing Bank and the Lenders) in the Collateral (other than Permitted Encumbrances)
and any Liens not expressly permitted by this Credit Agreement. 
  
 SECTION 8.6. Possession, Sale of Collateral, etc. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent, the Issuing Bank and the Lenders may enter upon the premises of any Credit Party or
wherever the Collateral may be, and take possession of the Collateral, and may demand and receive such possession from any Person who has possession thereof, and the Administrative Agent, the Issuing Bank and the Lenders may take such measures as
they deem necessary or proper for the care or protection thereof, including the right to remove all or any portion of the Collateral, and with or without taking such possession may sell or cause to be sold, whenever the Administrative Agent, the
Issuing Bank and the Lenders shall decide, in one or more sales or parcels, at such prices as the Administrative Agent, the Issuing Bank and the Lenders may deem appropriate, and for cash or on credit or for future delivery, without assumption of
any credit risk, all or any portion of the Collateral, at any broker’s board or at public or private sale, without demand of performance but with 10 days’ prior written notice to the Credit Parties of the time and place of any such public
sale or sales (which notice the Credit Parties hereby agree is reasonable) and with such other notices as may be required by Applicable Law and cannot be waived, and none of the Administrative Agent, the Issuing Bank and the Lenders shall have any
liability should the proceeds resulting from a private sale be less than the proceeds realizable from a public sale, and the Administrative Agent, on behalf of itself, the Issuing Bank the Lenders or any other Person may be the purchaser of all or
any portion of the Collateral so sold and thereafter hold the same absolutely, free (to the fullest extent permitted by Applicable Law) from any claim or right of whatever kind, including any equity of redemption, of any Credit Party, any such
demand, notice, claim, right or equity being hereby expressly waived and released. At any sale or sales made pursuant to this Article 8, the Administrative Agent, on behalf of itself, the Issuing Bank and the Lenders may bid for or purchase, free
(to the fullest extent permitted by Applicable Law) from any claim or right of whatever kind, including any equity of redemption, of any Credit Party, any such demand, notice, claim, right or equity being hereby expressly waived and released, any
part of or all of the Collateral offered for sale, and may make any payment on account thereof by using any claim for moneys then due and payable to the Administrative Agent, the Issuing Bank and Lenders by any Credit Party hereunder as a credit
against the purchase price. The Administrative Agent, on behalf of itself, the Issuing Bank and the Lenders shall in any such sale make no representations or warranties with respect to the Collateral or any part thereof, and none of the
Administrative Agent, the Issuing Bank and the Lenders shall be chargeable with any of the obligations or liabilities of any Credit Party. Each Credit Party hereby agrees (i) that it will indemnify and hold the Administrative Agent, the Issuing Bank
and the Lenders harmless from and against any and all claims with respect to the Collateral asserted before the taking of actual possession or control of the relevant Collateral by the Administrative Agent pursuant to this Article 8, or arising out
of any act of, or omission to act on the part of, any Person (other than the Administrative Agent, the Issuing Bank or Lenders) prior to such taking of 
  

 77 

 actual possession or control by the Administrative Agent (whether asserted before or after such taking of possession or
control), or arising out of any act on the part of any Credit Party or its Affiliates or agents before or after the commencement of such actual possession or control by the Administrative Agent, but excluding therefrom all claims with respect to the
Collateral resulting from (x) the gross negligence or willful misconduct of any of the Administrative Agent, the Issuing Bank or the Lenders or (y) any claims with respect to the Collateral asserted against an indemnified party by a Credit Party in
which such Credit Party is the prevailing party; and (ii) none of the Administrative Agent, the Issuing Bank and the Lenders shall have any liability or obligation to any Credit Party arising out of any such claim except for acts of willful
misconduct or gross negligence. Subject only to the lawful rights of third parties, any laboratory which has possession of any of the Collateral is hereby constituted and appointed by the Credit Parties as pledgeholder for the Administrative Agent,
on behalf of itself, the Issuing Bank and the Lenders and, upon the occurrence and during the continuation of an Event of Default, each such pledgeholder is hereby authorized (to the fullest extent permitted by Applicable Law) to sell all or any
portion of the Collateral upon the order and direction of the Administrative Agent, and each Credit Party hereby waives any and all claims, for damages or otherwise, for any action taken by such pledgeholder in accordance with the terms of the UCC
not otherwise waived hereunder. In any action hereunder, the Administrative Agent shall be entitled if permitted by Applicable Law to the appointment of a receiver without notice, to take possession of all or any portion of the Collateral and to
exercise such powers as the court shall confer upon the receiver. Notwithstanding the foregoing, upon the occurrence and during the continuation of an Event of Default, the Administrative Agent, the Issuing Bank and the Lenders shall be entitled to
apply, without prior notice to any of the Credit Parties, any cash or cash items constituting Collateral in the possession of the Administrative Agent, the Issuing Bank and the Lenders to payment of the Obligations. 
  
 SECTION 8.7. Application of Proceeds after Event of Default. Upon the
occurrence and during the continuance of an Event of Default, the balances in the JPMorgan Clearing Account, the Collection Account(s), the Cash Collateral Account(s) or in any other account of any Credit Party with a Lender, all other income on the
Collateral, and all proceeds from any sale of the Collateral pursuant hereto shall be applied first toward payment of the reasonable out-of-pocket costs and expenses paid or incurred by the Administrative Agent in enforcing this Credit Agreement, in
realizing on or protecting any Collateral and in enforcing or collecting any Obligations or any Guaranty thereof, including, without limitation, court costs and the attorney’s fees and expenses incurred by the Administrative Agent, and then to
the payment in full of the Obligations in accordance with Section 13.2 hereof; provided, however, that, the Administrative Agent may in its discretion apply funds comprising the Collateral to pay the cost (i) of completing any Item of
Product owned in whole or in part by any Credit Party in any stage of production, and (ii) of making delivery to the distributors of such Item of Product. Any amounts remaining after such payment in full shall be remitted to the appropriate Credit
Party or as a court of competent jurisdiction may otherwise direct. 
  
 SECTION 8.8. Power of Attorney. Upon the occurrence and during the continuance of an Event of Default which is not waived in writing by the Required Lenders, (a) each Credit Party does hereby irrevocably make, constitute and appoint
the Administrative Agent or any of its officers or designees its true and lawful attorney-in-fact with full power in the name of the Administrative Agent, such other Person or such Credit Party to receive, open and 
  

 78 

 dispose of all mail addressed to any Credit Party, and to endorse any notes, checks, drafts, money orders or other
evidences of payment relating to the Collateral that may come into the possession of the Administrative Agent with full power and right to cause the mail of such Persons to be transferred to the Administrative Agent’s own offices or otherwise,
and to do any and all other acts necessary or proper to carry out the intent of this Credit Agreement and the grant of the security interests hereunder and under the Fundamental Documents, and each Credit Party hereby ratifies and confirms all that
the Administrative Agent or its substitutes shall properly do by virtue hereof; and (b) each Credit Party does hereby further irrevocably make, constitute and appoint the Administrative Agent or any of its officers or designees its true and lawful
attorney-in-fact in the name of the Administrative Agent or any Credit Party (i) to enforce all of such Credit Party’s rights under and pursuant to all agreements with respect to the Collateral, all for the sole benefit of the Administrative
Agent for the benefit of the Administrative Agent, the Issuing Bank and the Lenders as contemplated hereby and under the other Fundamental Documents and to enter into such other agreements as may be necessary or appropriate in the judgment of the
Administrative Agent to complete the production, distribution or exploitation of any Item of Product which is included in the Collateral, (ii) to enter into and perform such agreements as may be necessary in order to carry out the terms, covenants
and conditions of the Fundamental Documents that are required to be observed or performed by such Credit Party, (iii) to execute such other and further mortgages, pledges and assignments of the Collateral, and related instruments or agreements, as
the Administrative Agent may reasonably require for the purpose of perfecting, protecting, maintaining or enforcing the security interests granted to the Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank and the
Lenders hereunder and under the other Fundamental Documents, and (iv) to do any and all other things necessary or proper to carry out the intention of this Credit Agreement and the grant of the security interests hereunder and under the other
Fundamental Documents. Each of the Credit Parties hereby ratifies and confirms in advance all that the Administrative Agent as such attorney-in-fact or its substitutes shall properly do by virtue of this power of attorney. 
  
 SECTION 8.9. Financing Statements, Direct Payments. Each Credit Party
hereby authorizes the Administrative Agent to file UCC financing statements and any amendments thereto or continuations thereof, any Copyright Security Agreement, any Copyright Security Agreement Supplement, any Trademark Security Agreement and any
other appropriate security documents or instruments and to give any notices necessary or desirable to perfect the Lien of the Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders in the Collateral, in all cases without
the signature of any Credit Party or to execute such items as attorney-in-fact for any Credit Party; provided, that the Administrative Agent shall provide copies of any such documents or instruments to the Borrower. Each Credit Party further
authorizes the Administrative Agent to notify, at the time that any Event of Default shall have occurred and be continuing, any account debtors that all sums payable to such Credit Party relating to the Collateral shall be paid directly to the
Administrative Agent. 
  
 SECTION 8.10. Further Assurances.
Upon the request of the Administrative Agent, each Credit Party hereby agrees to duly and promptly execute and deliver, or cause to be duly executed and delivered, at the cost and expense of the Credit Parties, such further instruments as may be
necessary or proper, in the reasonable judgment of the Administrative Agent, to carry out the provisions and purposes of this Article 8 or to perfect and preserve the Liens of the Administrative Agent (for the benefit of itself, the Issuing Bank and
the Lenders) hereunder and under the Fundamental Documents in the Collateral or any portion thereof. 
  

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 SECTION 8.11. Termination and Release. The security interests granted under this Article 8 shall
terminate when all the Obligations have been fully and indefeasibly paid and performed and the Commitments shall have terminated. Upon request by the Credit Parties (and at the sole expense of the Credit Parties) after such termination, the
Administrative Agent will promptly take all reasonable action and do all things reasonably necessary, including executing UCC termination statements, Pledgeholder Agreement terminations, termination letters to account debtors and copyright releases,
to terminate the security interest granted to it (for the benefit of the Administrative Agent, the Issuing Bank and the Lenders) hereunder. 
  
 SECTION 8.12. Remedies Not Exclusive. The remedies conferred upon or reserved to the Administrative Agent in this Article 8 are intended to be in
addition to, and not in limitation of, any other remedy or remedies available to the Administrative Agent. Without limiting the generality of the foregoing, the Administrative Agent, the Issuing Bank and the Lenders shall have all rights and
remedies of a secured creditor under Article 9 of the UCC and under any other Applicable Law. 
  
 SECTION 8.13. Quiet Enjoyment. The Administrative Agent, the Issuing Bank and the Lenders acknowledge and agree that their security interest hereunder is subject to the rights of Quiet Enjoyment (as defined
below) of parties (which are not Affiliates of any member of the Credit Group) to Distribution Agreements, 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 member of the Credit Group) under a Distribution Agreement, the Administrative Agent, the Issuing Bank and the Lenders’ agreement that their rights under this Credit Agreement and
the other Fundamental Documents and in the Collateral are subject to the rights of such licensee to distribute, exhibit and/or to exploit the Item of Product licensed to them under such Distribution Agreement, 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 Lenders shall become the owner of the Collateral in case of an Event of Default, the
Lenders’ ownership rights shall be subject to the rights of said parties under such agreement; provided, however, that such licensee shall not be in default under the relevant Distribution Agreement. The Administrative Agent
agrees that, upon the reasonable request of a Credit Party, it will provide written confirmation (in form reasonably acceptable to the Administrative Agent) of such rights of Quiet Enjoyment to licensees under the Distribution Agreements. None of
the foregoing constitutes an agreement by the Administrative Agent, the Issuing Bank or the Lenders to the granting of any security interest to any Person under any Distribution Agreement, except as otherwise permitted pursuant to Section 6.2.

  
 SECTION 8.14. Continuation and Reinstatement. Each
Credit Party further agrees that the security interest granted hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment or any part thereof of any Obligation is rescinded or must otherwise be restored by
the Administrative Agent, the Issuing Bank or the Lenders upon the bankruptcy or reorganization of any member of the Credit Group or otherwise. 
  

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 9. GUARANTY OF GUARANTORS 
  
 SECTION 9.1. Guaranty. 
  
 (a) Each Guarantor unconditionally and irrevocably guarantees to the Administrative Agent, the Issuing Bank and the Lenders the due and punctual payment
by, and performance of, the Obligations (including interest accruing on and after the filing of any petition in bankruptcy or of reorganization of the obligor whether or not post filing interest is allowed in such proceeding). Each Guarantor further
agrees that the Obligations may be increased, extended or renewed, in whole or in part, without notice or further assent from it (except as may be otherwise required herein), and it will remain bound upon this Guaranty notwithstanding any extension
or renewal of any Obligation. 
  
 (b) Each Guarantor waives
presentation to, demand for payment from and protest to, as the case may be, any Credit Party or any other guarantor of any of the Obligations, and also waives notice of protest for nonpayment, notice of acceleration and notice of intent to
accelerate. The obligations of each Guarantor hereunder shall not be affected by (i) the failure of the Administrative Agent, the Issuing Bank or the Lenders to assert any claim or demand or to enforce any right or remedy against the Borrower, the
Parent or any Guarantor or any other guarantor under the provisions of this Credit Agreement or any other agreement or otherwise; (ii) any extension or renewal of any provision hereof or thereof; (iii) the failure of the Administrative Agent, the
Issuing Bank or the Lenders to obtain the consent of the Parent and the Guarantor with respect to any rescission, waiver, compromise, acceleration, amendment or modification of any of the terms or provisions of this Credit Agreement, the Notes or of
any other agreement; (iv) the release, exchange, waiver or foreclosure of any security held by the Administrative Agent for the Obligations or any of them; (v) the failure of the Administrative Agent, the Issuing Bank or the Lenders to exercise any
right or remedy against the Parent, any other Guarantor or any other guarantor of the Obligations; or (vi) the release or substitution of the Parent, any Guarantor or any other guarantor of the Obligations. Without limiting the generality of the
foregoing or any other provision hereof (including, without limitation, Section 14.6 hereof, it being the specific intent of the parties that the choice of law provision in Section 14.6 is to apply to this Credit Agreement), to the extent permitted
by Applicable Law, each Guarantor hereby expressly waives any and all benefits which might otherwise be available to it under California Civil Code Sections 2799, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2845, 2848, 2849, 2850, 2899 and
3433. 
  
 (c) Each Guarantor further agrees that this Guaranty
constitutes a guaranty of performance and of payment when due and not just of collection, and waives any right to require that any resort be had by the Administrative Agent, the Issuing Bank or any Lender to any security held for payment of the
Obligations or to any balance of any deposit, account or credit on the books of the Administrative Agent, the Issuing Bank or any Lender in favor of the Borrower, the Parent or any Guarantor, or to any other Person. 
  
 (d) Each Guarantor hereby expressly assumes all responsibilities to remain
informed of the financial condition of the Borrower, the Parent, the Guarantors and any other guarantors of the Obligations and any circumstances affecting the Collateral or the Pledged Securities or the ability of the Borrower to perform under this
Credit Agreement. 
  

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 (e) Each Guarantor’s obligations under the Guaranty shall not be affected by the genuineness,
validity, regularity or enforceability of the Obligations, the Notes or any other instrument evidencing any Obligations, or by the existence, validity, enforceability, perfection, or extent of any collateral therefor or by any other circumstance
relating to the Obligations which might otherwise constitute a defense to this Guaranty. The Administrative Agent, the Issuing Bank and the Lenders make no representation or warranty with respect to any such circumstances and have no duty or
responsibility whatsoever to the Parent or any Guarantor in respect to the management and maintenance of the Obligations or any collateral security for the Obligations. 
  
 SECTION 9.2. No Impairment of Guaranty, etc. The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (except payment and performance in full of the Obligations), including, without limitation, any claim of waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the
Parent and each Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy under this Credit
Agreement or any other agreement, by any waiver or modification of any provision hereof or thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or thing or omission or delay to
do any other act or thing which may or might in any manner or to any extent vary the risk of such Guarantor or would otherwise operate as a discharge of such Guarantor as a matter of law, unless and until the Obligations are paid in full and the
Commitments have terminated. 
  
 SECTION 9.3. Continuation and
Reinstatement, etc. 
  
 (a) Each Guarantor further agrees
that its guaranty hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Administrative Agent, the Issuing Bank
or the Lenders upon the bankruptcy or reorganization of the Borrower, the Parent or a Guarantor, or otherwise. In furtherance of the provisions of this Article 9, and not in limitation of any other right which the Administrative Agent, the Issuing
Bank or the Lenders may have at law or in equity against the Borrower, the Parent, a Guarantor or any other Person by virtue hereof, upon failure of the Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice or otherwise, each Guarantor hereby promises to and will, upon receipt of written demand by the Administrative Agent on behalf of itself and/or the Issuing Bank and/or the Lenders, forthwith pay or cause to be paid to the
Administrative Agent for the benefit of itself, the Issuing Bank and/or the Lenders (as applicable) in cash an amount equal to the unpaid amount of such unpaid Obligations with interest thereon from the due date at a rate of interest equal to the
rate specified in Section 2.7(a) hereof, and thereupon the Administrative Agent shall assign such Obligation, together with all security interests, if any, then held by the Administrative Agent in respect of such Obligation, to the Guarantor or
Guarantors making such payment; such assignment to be subordinate and junior to the rights of the Administrative Agent on behalf of itself, the Issuing Bank and the Lenders with regard to amounts payable by the Borrower in connection with the
remaining unpaid Obligations and to be pro tanto to the extent to which the Obligation in question was discharged by the Parent, the Guarantor or Guarantors making such payments. 
  

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 (b) All rights of each Guarantor against the Borrower, arising as a result of the payment by such
Guarantor of any sums to the Administrative Agent for the benefit of the Administrative Agent, and/or the Issuing Bank and/or the Lenders or directly to the Lenders hereunder by way of right of subrogation or otherwise, shall in all respects be
subordinated and junior in right of payment to, and shall not be exercised by such Guarantor until and unless, the prior final payment in full of all the Obligations. If any amount shall be paid to such Guarantor for the account of the Borrower,
such amount shall be held in trust for the benefit of the Administrative Agent, segregated from such Guarantor’s own assets, and shall forthwith be paid to the Administrative Agent on behalf of the Administrative Agent and/or the Issuing Bank
and/or the Lenders to be credited and applied to the Obligations, whether matured or unmatured. 
  
 SECTION 9.4. Limitation on Guaranteed Amount, etc. Notwithstanding any other provision of this Article 9, the amount guaranteed by each Guarantor
hereunder shall be limited to the extent, if any, required so that its obligations under this Article 9 shall not be subject to avoidance under Section 548 of the Bankruptcy Code or to being set aside or annulled under any Applicable Law relating to
fraud on creditors. In determining the limitations, if any, on the amount of any Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation or contribution
which the Parent or such Guarantor may have under this Article 9, any other agreement or Applicable Law shall be taken into account. 
  
 1. GUARANTY OF PARENT 
  
 2. Guaranty. 
  
 (a) The Parent unconditionally and irrevocably guarantees to the Administrative Agent, the Issuing Bank and the Lenders (i) the due and punctual payment
by, and performance of, the Obligations (including interest accruing on and after the filing of any petition in bankruptcy or of reorganization of the obligor whether or not post filing interest is allowed in such proceeding); provided,
however, that the liability of the Parent for the Obligations shall not be personal but shall be limited to the securities pledged by it pursuant to Article 11 hereof, (ii) the due and punctual payment by it and its Affiliates of any amounts
payable by any of them to a member of the Credit Group and (iii) the due and punctual performance of the Borrower’s prepayment obligation under Section 2.9(e) hereof and the Borrower’s obligation to furnish additional security under
Section 2.15(j) hereof; provided, however, the Parent shall be liable under this clause (iii) only in the event that (x) the Borrower’s obligation under Section 2.9(e) or Section 2.15(j), as applicable, arises as a result of the
Maximum Allowable Outstanding Amount as calculated based on the audited financial statements of the Credit Group for the fiscal year ending July 31, 2005 being less than the Maximum Allowable Outstanding Amount as calculated based on the unaudited
financial statements of the Credit Group at the fiscal quarter ending April 30, 2005 and (y) as of the date of the delivery of the audited financial statements of the Credit Group for the fiscal year ending July 31, 2005, the Loans then outstanding
under the Credit Agreement exceed the Maximum Allowable Outstanding Amount (all of the obligations guaranteed pursuant to this Section 10.1 
  

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 being hereinafter referred to as the “Parent Guaranteed Obligations”). The Parent further agrees that
the Parent Guaranteed Obligations may be increased, extended or renewed, in whole or in part, without notice or further assent from it (except as may be otherwise required herein), and it will remain bound upon this Guaranty notwithstanding any
extension or renewal of any Parent Guaranteed Obligation. 
  
 3.
The Parent waives presentation to, demand for payment from and protest to, as the case may be, any Credit Party or any other guarantor of any of the Parent Guaranteed Obligations, and also waives notice of protest for nonpayment, notice of
acceleration and notice of intent to accelerate. The obligations of the Parent hereunder shall not be affected by (i) the failure of the Administrative Agent, the Issuing Bank or the Lenders to assert any claim or demand or to enforce any right or
remedy against the Borrower, any Guarantor or any other guarantor under the provisions of this Credit Agreement or any other agreement or otherwise; (ii) any extension or renewal of any provision hereof or thereof; (iii) the failure of the
Administrative Agent, the Issuing Bank or the Lenders to obtain the consent of the Parent with respect to any rescission, waiver, compromise, acceleration, amendment or modification of any of the terms or provisions of this Credit Agreement, the
Notes or of any other agreement; (iv) the release, exchange, waiver or foreclosure of any security held by the Administrative Agent for the Parent Guaranteed Obligations or any of them; (v) the failure of the Administrative Agent, the Issuing Bank
or the Lenders to exercise any right or remedy against any Guarantor or any other guarantor of Parent Guaranteed Obligations; or (vi) the release or substitution of any Guarantor or any other guarantor of the Parent Guaranteed Obligations. Without
limiting the generality of the foregoing or any other provision hereof (including, without limitation, Section 14.6 hereof, it being the specific intent of the parties that the choice of law provision in Section 14.6 is to apply to this Credit
Agreement), to the extent permitted by Applicable Law, Parent hereby expressly waives any and all benefits which might otherwise be available to it under California Civil Code Sections 2799, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839,
2845, 2848, 2849, 2850, 2899 and 3433. 
  
 4. The Parent further
agrees that this guaranty constitutes a guaranty of performance and of payment when due and not just of collection, and waives any right to require that any resort be had by the Administrative Agent, the Issuing Bank or any Lender to any security
held for payment of the Parent Guaranteed Obligations or to any balance of any deposit, account or credit on the books of the Administrative Agent, the Issuing Bank or any Lender in favor of the Borrower, the Parent or any Guarantor, or to any other
Person. 
  
 5. The Parent hereby expressly assumes all
responsibilities to remain informed of the financial condition of the Borrower, the Guarantors and any other guarantors of the Parent Guaranteed Obligations and any circumstances affecting the Collateral or the Pledged Securities or the ability of
the Borrower to perform under this Credit Agreement. 
  
 6. The
Parent obligations under the guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Parent Guaranteed Obligations, the Notes or any other instrument evidencing any Parent Guaranteed Obligations, or by the
existence, validity, enforceability, perfection, or extent of any collateral therefor or by any other circumstance relating to the Parent Guaranteed Obligations which might otherwise constitute a defense to this Guaranty. The Administrative Agent,
the Issuing Bank and the Lenders make no 
  

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 representation or warranty with respect to any such circumstances and have no duty or responsibility whatsoever to the
Parent in respect to the management and maintenance of the Parent Guaranteed Obligations or any collateral security for the Parent Guaranteed Obligations. 
  
 7. No Impairment of Guaranty, etc. The obligations of the Parent hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason (except payment and performance in full of the Parent Guaranteed Obligations), including, without limitation, any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or
set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Parent Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the
Parent shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy under this Credit Agreement or any other agreement, by
any waiver or modification of any provision hereof or thereof, by any default, failure or delay, willful or otherwise, in the performance of the Parent Guaranteed Obligations, or by any other act or thing or omission or delay to do any other act or
thing which may or might in any manner or to any extent vary the risk of the Parent or would otherwise operate as a discharge of the Parent as a matter of law, unless and until the Parent Guaranteed Obligations are paid in full and the Commitments
have terminated. 
  
 8. Continuation and Reinstatement,
etc. 
  
 (b) The Parent further agrees that its guaranty
hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Parent Guaranteed Obligation is rescinded or must otherwise be restored by the Administrative Agent, the Issuing Bank
or the Lenders upon the bankruptcy or reorganization of the Borrower, or a Guarantor, or otherwise. In furtherance of the provisions of this Article 10, and not in limitation of any other right which the Administrative Agent, the Issuing Bank or the
Lenders may have at law or in equity against the Borrower, the Parent, a Guarantor or any other Person by virtue hereof, upon failure of the Borrower to pay any Parent Guaranteed Obligation when and as the same shall become due, whether at maturity,
by acceleration, after notice or otherwise, the Parent hereby promises to and will, upon receipt of written demand by the Administrative Agent on behalf of itself and/or the Issuing Bank and/or the Lenders, forthwith pay or cause to be paid to the
Administrative Agent for the benefit of itself, the Issuing Bank and/or the Lenders (as applicable) in cash an amount equal to the lesser of (i) the unpaid amount of such unpaid Obligations and (ii) the unpaid amount of the Parent Guaranteed
Obligations, in either case with interest thereon from the due date at a rate of interest equal to the rate specified in Section 2.7(a) hereof, and thereupon the Administrative Agent shall assign such Obligation, together with all security
interests, if any, then held by the Administrative Agent in respect of such Obligation, to the Parent making such payment; such assignment to be subordinate and junior to the rights of the Administrative Agent on behalf of itself, the Issuing Bank
and the Lenders with regard to amounts payable by the Borrower in connection with the remaining unpaid Obligations and to be pro tanto to the extent to which the Obligation in question was discharged by the Parent, the Guarantor or Guarantors making
such payments. 
  
 9. All rights of the Parent against the
Borrower, arising as a result of the payment by the Parent of any sums to the Administrative Agent for the benefit of the 
  

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 Administrative Agent, and/or the Issuing Bank and/or the Lenders or directly to the Lenders hereunder by way of right of
subrogation or otherwise, shall in all respects be subordinated and junior in right of payment to, and shall not be exercised by the Parent until and unless, the prior final payment in full of all the Obligations. If any amount shall be paid to the
Parent for the account of the Borrower, such amount shall be held in trust for the benefit of the Administrative Agent, segregated from the Parent’s own assets, and shall forthwith be paid to the Administrative Agent on behalf of the
Administrative Agent and/or the Issuing Bank and/or the Lenders to be credited and applied to the Obligations, whether matured or unmatured. 
  
 10. Representations and Warranties of the Parent. 
  
 (c) Existence and Power. 
  
 (i) The Parent is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is in good standing as a foreign entity in all jurisdictions where (x) the nature of its properties or business so requires, or (y) the failure to be so qualified or be in good standing, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect (a list of such jurisdictions as of the date hereof is attached hereto as Schedule 3.1). 
  
 (ii) The Parent has the power and authority (x) to own its respective properties and carry on its respective
business as now being conducted or as intended to be conducted, (y) to execute, deliver and perform, as applicable, its obligations under the Fundamental Documents and any other documents contemplated thereby to which it is or will be a party, and
(z) to grant to the Administrative Agent, for the benefit of the Administrative Agent, the Issuing Bank and the Lenders, a security interest in the Group 1 Pledged Securities as contemplated by Article 11 hereof; and, to guaranty the Obligations as
contemplated this Article 10. 
  
 (d) Authority and No
Violation. 
  
 (i) The execution, delivery
and performance of this Credit Agreement and the other Fundamental Documents to which it is a party, by the Parent, the grant to the Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank and the Lenders of the security
interest in the Pledged Securities as contemplated herein and by the other Fundamental Documents and, in the case of the Parent, the guaranty of the Obligations as contemplated in this Article 10, (u) have been duly authorized by all necessary
corporate action (or similar action) on the part of the Parent, (v) will not constitute a violation of any provision of Applicable Law in any material respect or any order of any Governmental Authority applicable to the Parent, or any of its
properties or assets in any material respect, (w) will not violate any provision of the Certificate of Incorporation, By–Laws, operating agreement or any other organizational document of the Parent, (x) will not violate any provision of any
Distribution Agreement, indenture, agreement, bond, note or other similar instrument to which the Parent or by which the Parent or any of its properties or assets are bound, other than where any such violation could not, individually or in the
aggregate, reasonably be expected to have a Material 
  

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 Adverse Effect, (y) will not be in conflict with, result in a breach of, or constitute (with due notice
or lapse of time or both) a default under, or create any right to terminate, any such Distribution Agreement, indenture, agreement, bond, note or other similar instrument, other than where any such violation could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and (z) will not result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of any of the Parent other
than pursuant to this Credit Agreement or the other Fundamental Documents. 
  
 (ii) Other than the restrictions listed on Schedule 3.2(b), there are no restrictions on the transfer of any of the Pledged Securities other than as a result of this Credit Agreement or applicable securities
laws and the regulations promulgated thereunder. 
  
 (e)
Financial Statements. The (i) unaudited consolidated balance sheet of the Parent and its Consolidated Subsidiaries for the quarter ended January 31, 2005 and (ii) unaudited combined balance sheet of the Credit Group for the quarter ended
January 31, 2005, in each case, together with the related statements of income, have been prepared in accordance with GAAP in effect as of such date consistently applied, except as otherwise indicated in the notes to such financial statements and
subject to changes resulting from year-end and audit adjustments. All of such financial statements (x) are true and correct in all material respects, (y) fairly present the financial position or the results of operations of the Parent and its
Consolidated Subsidiaries or the Credit Group, as applicable, on a consolidated basis at the dates or for the periods indicated, subject to year-end and audit adjustments, and (z) reflect all known liabilities, contingent or otherwise, that GAAP
require, as of such dates, to be shown or reserved against. 
  
 (f) No Material Adverse Change. There has been no material adverse change with respect to the business, operations, performance, assets, properties or financial condition of the Parent taken as a whole from July 31, 2004. 

 
 (g) Ownership of Pledged Securities. The Parent directly owns all
of the voting stock and other Equity Interests, if any, of the Borrower, Manga UK and New Arc. Manga UK directly owns all of the voting stock and other Equity Interests, if any, of Manga. The Parent indirectly owns all of the voting stock and other
Equity Interests, if any, of TLL. TLL directly owns all of the voting stock and other Equity Interests, if any, of the Top-Tier Foreign Anchor Bay Companies. The Top-Tier Foreign Anchor Bay Companies directly own all of the voting stock and other
Equity Interests, if any, of the Second-Tier Foreign Anchor Bay Companies. All of the entities comprising the “Anchor Bay”, “Manga” and “New Arc” businesses are listed on Schedule 3.7(a), and the financial
statements and Initial Projections heretofore delivered to the Administrative Agent reflect information relating to all such Persons and no other Persons. 
  
 (h) Litigation. Schedule 3.12 sets forth a list as of the Closing Date of all actions, suits or other proceedings at law or in equity
by or before any arbitrator, arbitration panel or Governmental Authority, and to the Parent’s knowledge, any investigation by any Governmental Authority of the affairs of, or threatened action, suit or other proceeding against or affecting, the
Parent or any of its respective properties or rights. Except as set forth in Schedule 3.12, 
  

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 there are no actions, suits or other proceedings at law or in equity by or before any arbitrator, arbitration panel or
Governmental Authority (including, but not limited to, matters relating to environmental liability) or, to the best of the Parent’s knowledge, any investigation by any Governmental Authority of the affairs of, or threatened action, suit or
other proceeding against or affecting, the Parent or of any of its respective properties or rights which either (A) if adversely determined, could reasonably be expected to have a Material Adverse Effect, or (B) relate to this Credit Agreement, any
other Fundamental Documents or any of the transactions contemplated hereby. The Parent is not in default with respect to any order, writ, injunction, decree, rule or regulation of any Governmental Authority binding upon such Person. 
  
 (i) Security Interest. This Credit Agreement and the other Fundamental
Documents, when executed and delivered and, upon the making of the initial Loan hereunder, will create and grant to the Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank and the Lenders (upon the delivery of the
Pledged Securities and (in the case of Pledged Securities comprising capital stock) the appropriate stock powers to the Administrative Agent) valid and first priority perfected security interests in the Pledged Securities. The Parent’s taxpayer
identification number and organizational identification number is listed on Schedule 3.18 hereto. 
  
 (j) Disclosure. Neither this Agreement nor any other Fundamental Document nor any material agreement, document, certificate or statement (other
than the Initial Projections) furnished to the Agent and the Lenders by or on behalf of the Parent in connection with the transactions contemplated hereby, at the time it was furnished contained any untrue statement of a material fact or omitted to
state a material fact, under the circumstances under which it was made, necessary in order to make the statements contained herein or therein not misleading (considered in the context of all other information provided to the Lenders). The Initial
Projections, unless otherwise disclosed, were prepared in good faith based upon reasonable assumptions. At the date hereof, there is no fact known to the Parent (other than general industry conditions) which materially and adversely affects, or in
the future may reasonably be expected to materially and adversely affect the business, properties, assets, operations or financial condition of the Parent, taken as a whole. 
  
 SECTION 9.5. Affirmative Covenants of the Parent. 
  
 From the date hereof and for so long as the Commitments shall be in effect, any amount shall remain outstanding under any
Note, any Letter of Credit shall remain outstanding or any other Obligation shall remain unpaid or unsatisfied, the Parent agrees that, unless the Required Lenders shall otherwise consent in writing, each of them will, and will cause each of its
Subsidiaries to: 
  
 (a) Financial Statement. Furnish or
cause to be furnished to the Administrative Agent and each of the Lenders: 
  
 (i) Within one hundred twenty (120) days after the end of each fiscal year of the Parent commencing with the fiscal year ending July 31, 2006, the audited consolidated balance sheet of Parent and its Consolidated
Subsidiaries, as at the end of, and the related consolidated statements of income, stockholders’ equity and cash flows 
  

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 for, such year, and, commencing with the fiscal year ending July 31, 2007, the corresponding figures as
at the end of, and for, the preceding fiscal year, accompanied by an unqualified report and opinion of Ernst & Young LLP or such other independent public accountant of nationally recognized standing as shall be retained by Parent and be
reasonably satisfactory to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards relating to reporting and which report and opinion shall contain no material exceptions or
qualifications except for qualifications relating to accounting changes (with which such independent public accountants concur) in response to FASB releases or other authoritative pronouncements, together with a certificate signed by an Authorized
Officer of the Parent, to the effect that such financial statements fairly present the financial position of the Parent and its Consolidated Subsidiaries as at the dates indicated and the results of its operations for the periods indicated in
conformity with GAAP; 
  
 (ii) Within sixty (60)
days after the end of each of the first three fiscal quarters of each of fiscal year of the Parent, the unaudited consolidated balance sheets of Parent and its Consolidated Subsidiaries, in each case as at the end of, and the related unaudited
consolidated statements of income, stockholders’ equity and cash flow for, such quarter, and for the portion of the fiscal year through the end of such quarter, and the corresponding figures as at the end of such quarter, and for the
corresponding period, in the preceding fiscal year, together with a certificate signed by an Authorized Officer of the Parent, to the effect that such financial statements, while not examined by independent public accountants, reflect, in the
opinion of Parent, all adjustments necessary to present fairly in all material respects the financial position of the Parent and its Consolidated Subsidiaries as at the end of the fiscal quarter and the results of operations for the quarter then
ended in conformity with GAAP, subject to normal year-end audit adjustments and the absence of footnotes; 
  
 (iii) Within 10 Business Days of receipt thereof by a Credit Party, copies of all management letters issued to such Person by its
auditors; 
  
 (iv) Promptly upon their becoming
available, copies of (x) all registration statements, proxy statements, notices and reports which Parent shall file with any securities exchange or with the Securities and Exchange Commission or any successor agency, and (y) all reports, financial
statements, press releases and other information which the Parent shall release, send or make available to its common stockholders generally; 
  
 (v) Promptly upon request therefor, any information required by the Administrative Agent, the Issuing Bank or any Lender under or in
connection with the USA Patriot Act; and 
  
 (vi)
From time to time such additional information regarding the financial condition or business of the Parent, any member of the Credit Group, as the Administrative Agent or any Lender acting through the Administrative Agent may reasonably request.

  

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 (b) Corporate Existence; Compliance with Laws. Do or cause to be done all things necessary (i) to
preserve, renew and keep in full force and effect its legal existence, rights, licenses, permits and franchises and (ii) to comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, any Governmental
Authority. 
  
 (c) Liens. Defend the Pledged Securities of
the Parent against any and all Liens howsoever arising, other than Permitted Encumbrances, and in any event defend against any attempted foreclosure. 
  
 (d) Litigation. Promptly inform Administrative Agent of all actions, suits or other proceedings at law or in equity by or before any arbitrator,
arbitration panel or Governmental Authority and any investigation by any Governmental Authority of the affairs of, or threatened action, suit or other proceeding against or affecting, the Parent or any of its respective properties or rights.

  
 (e) Dividends. Return to the relevant Credit Party any
dividend (or portion thereof) the Parent receives pursuant to Section 6.5(c) hereof as a result of the Borrower satisfying the liquidity test set forth in the proviso therein based on the Maximum Allowable Outstanding Amount as calculated based on
the unaudited financial statements of the Credit Group at the fiscal quarter ending April 30, 2005, if (i) the Borrower would not have satisfied such liquidity test on the date of the relevant dividend issuance based on the Maximum Allowable
Outstanding Amount as calculated based on the audited financial statements of the Credit Group for the fiscal year ending July 31, 2005 and (ii) at the time of the delivery of such audited financial statements, the Borrower would not satisfy such
liquidity test (other than as a result of Loans made hereunder for working capital purposes during the intervening period). 
  
 10. PLEDGE 
  
 SECTION 10.1. Pledge. Each Pledgor, as security for the due and punctual payment of the Obligations (including interest accruing on and after the
filing of any petition in bankruptcy or of reorganization of the Borrower whether or not post filing interest is allowed in such proceeding) in the case of the Borrower, and as security for its obligations hereunder in the case of a Pledgor other
than the Borrower, hereby pledges, hypothecates, assigns, transfers, sets over and delivers unto the Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders, a security interest in all Pledged Collateral now owned or
hereafter acquired by it. On the Closing Date, the Pledgors shall deliver to the Administrative Agent the definitive instruments (if any) representing all Group 1 Pledged Securities, accompanied by undated stock powers (in the case of Group 1
Pledged Securities comprising capital stock), duly endorsed or executed in blank by the appropriate Pledgor, and such other instruments or documents as the Administrative Agent or its counsel shall reasonably request. 
  
 SECTION 10.2. Covenant. Each Pledgor covenants that as the owner of
Equity Interests in each of its respective Subsidiaries it will not take any action to allow any additional shares of common stock, preferred stock or other Equity Interests of any of its respective Subsidiaries or any securities convertible or
exchangeable into common or preferred stock or other Equity Interests of such Subsidiaries to be issued, or grant any options or warrants, unless all of such securities (or, in the case of a Subsidiary that is a Controlled Foreign Subsidiary, 66%

  

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 of such securities) are pledged to the Administrative Agent (for the benefit of itself, the Issuing Bank and the Lenders)
as security for the Obligations and, if applicable, such Pledgor’s obligations under Article 9 hereof. 
  
 SECTION 10.3. Registration in Nominee Name; Denominations. The Administrative Agent shall have the right (in its sole and absolute discretion) to
hold the certificates representing any Group 1 Pledged Securities (a) in its own name (on behalf of the Administrative Agent, the Issuing Bank and the Lenders) or in the name of its nominee, or (b) in the name of the appropriate Pledgor, endorsed or
assigned in blank or in favor of the Administrative Agent. The Administrative Agent shall have the right to exchange the certificates representing any of the Group 1 Pledged Securities for certificates of smaller or larger denominations for any
purpose consistent with this Credit Agreement. 
  
 SECTION 10.4.
Voting Rights; Dividends; etc. 
  
 (a) The appropriate
Pledgor shall be entitled to exercise any and all voting and/or consensual rights and powers accruing to an owner of the Group 1 Pledged Securities being pledged by it hereunder or any part thereof for any purpose not inconsistent with the terms
hereof, at all times, except as expressly provided in paragraph (c) below. 
  
 (b) All dividends or distributions of any kind whatsoever (other than cash dividends or cash distributions paid while no Event of Default is continuing) received by a Pledgor, whether resulting from a subdivision,
combination, or reclassification of the outstanding capital stock or Equity Interests of the issuer or received in exchange for Group 1 Pledged Securities or any part thereof or as a result of any merger, consolidation, acquisition, or other
exchange of assets to which the issuer may be a party, or otherwise, shall be and become part of the Group 1 Pledged Securities pledged hereunder and shall immediately be delivered to the Administrative Agent to be held subject to the terms hereof.
All dividends and distributions which are received contrary to the provisions of this subsection (b) shall be received in trust for the benefit of the Administrative Agent, the Issuing Bank and the Lenders, segregated from such Pledgor’s own
assets, and shall be delivered to the Administrative Agent. 
  
 (c) Upon the occurrence and during the continuance of an Event of Default and notice from the Administrative Agent of the transfer of such rights to the Administrative Agent, all rights of such Pledgor (i) to exercise the voting and/or
consensual rights and powers which it is entitled to exercise pursuant to this Section, and (ii) to receive and retain cash dividends and cash distributions shall cease, and all such rights shall thereupon become vested in the Administrative Agent,
which shall have the sole and exclusive right and authority to exercise such voting and/or consensual rights and receive such cash dividends and cash distributions until such time as such Event of Default has been cured or waived. 
  
 SECTION 10.5. Remedies Upon Default. If an Event of Default shall have
occurred and be continuing, the Administrative Agent, on behalf of itself, the Issuing Bank and the Lenders, may sell the Group 1 Pledged Securities, or any part thereof, at public or private sale or at any broker’s board or on any securities
exchange, for cash, upon credit or for future delivery as the Administrative Agent shall deem appropriate subject to the terms hereof or as otherwise provided in the UCC. The Administrative Agent shall be authorized at any such sale 
  

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 (if it deems it advisable to do so) to restrict to the full extent permitted by Applicable Law the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing the Group 1 Pledged Securities for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale, the
Administrative Agent shall have the right to assign, transfer, and deliver to the purchaser or purchasers thereof the Group 1 Pledged Securities so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any
claim or right on the part of any Pledgor. The Administrative Agent shall give the Pledgors ten (10) days’ prior written notice of any such public or private sale, or sale at any broker’s board or on any such securities exchange, or of any
other disposition of the Group 1 Pledged Securities. Such notice, in the case of public sale, shall state the time and place for such sale and, in the case of sale at a broker’s board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Group 1 Pledged Securities, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Administrative Agent may fix and shall state in the notice of such sale. At any such sale, the Group 1 Pledged Securities, or portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Administrative Agent may (in its sole and absolute discretion) determine. The Administrative Agent shall not be obligated to make any sale of the Group 1 Pledged Securities if it shall determine not to do so, regardless of
the fact that notice of sale of the Group 1 Pledged Securities may have been given. The Administrative Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case the sale of all or any part of the Group 1 Pledged Securities is made on credit or for future
delivery, the Group 1 Pledged Securities so sold shall be retained by the Administrative Agent until the sale price is paid by the purchaser or purchasers thereof, but the Administrative Agent shall not incur any liability in case any such purchaser
or purchasers shall fail to take up and pay for the Group 1 Pledged Securities so sold and, in case of any such failure, such Group 1 Pledged Securities may be sold again upon like notice. At any sale or sales made pursuant to this Section 11.5, the
Administrative Agent (on behalf of itself, and/or the Issuing Bank and/or the Lenders) may bid for or purchase, free from any claim or right of whatever kind, including any equity of redemption, of the Pledgors, any such demand, notice, claim, right
or equity being hereby expressly waived and released, any or all of the Group 1 Pledged Securities offered for sale, and may make any payment on the account thereof by using any claim for moneys then due and payable to the Administrative Agent or
any consenting Lender by any Credit Party as a credit against the purchase price; and the Administrative Agent, upon compliance with the terms of sale, may hold, retain and dispose of the Group 1 Pledged Securities without further accountability
therefor to any Pledgor or any third party (other than the Lenders). The Administrative Agent shall in any such sale make no representations or warranties with respect to the Group 1 Pledged Securities or any part thereof, and shall not be
chargeable with any of the obligations or liabilities of the Pledgors with respect thereto. Each Pledgor hereby agrees (i) it will indemnify and hold the Administrative Agent, the Issuing Bank and the Lenders harmless from and against any and all
claims with respect to the Group 1 Pledged Securities asserted before the taking of actual possession or control of the Group 1 Pledged Securities by the Administrative Agent pursuant to this Credit Agreement, or arising out of any act of, or
omission to act on the part of, any Person prior to such taking of actual 
  

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 possession or control by the Administrative Agent (whether asserted before or after such taking of possession or
control), or arising out of any act on the part of any Pledgor, its agents or Affiliates before or after the commencement of such actual possession or control by the Administrative Agent but excluding from therefrom all claims with respect to the
Group 1 Pledged Securities resulting from (x) the gross negligence or willful misconduct of any of the Administrative Agent. the Issuing Bank or the Lenders, or (y) any claims with respect to the Group 1 Pledged Securities asserted against an
indemnified party by a Credit Party in which such Credit Party is the prevailing party, and the Administrative Agent, the Issuing Bank and the Lenders shall have no liability or obligation arising out of any such claim except for acts of willful
misconduct or gross negligence. As an alternative to exercising the power of sale herein conferred upon it, the Administrative Agent may proceed by a suit or suits at law or in equity to foreclose upon the Collateral and Group 1 Pledged Securities
under this Credit Agreement and to sell the Group 1 Pledged Securities, or any portion thereof, pursuant to a judgment or decree of a court or courts having competent jurisdiction. 
  
 SECTION 10.6. Application of Proceeds of Sale and Cash. The proceeds of sale of the Group 1 Pledged Securities sold
pursuant to Section 11.5 hereof shall be applied by the Administrative Agent on behalf of itself, the Issuing Bank and the Lenders as follows: 
  

	 	(i)	to the payment of all out-of-pocket costs and expenses paid or incurred by the Administrative Agent in connection with such sale, including, without limitation, all court costs and
the fees and expenses of counsel for the Administrative Agent in connection therewith, and the payment of all out-of-pocket costs and expenses paid or incurred by the Administrative Agent in enforcing this Credit Agreement, in realizing or
protecting any Collateral and in enforcing or collecting any Obligations or any guaranty thereof, including, without limitation, court costs and the attorney’s fees and expenses incurred by the Administrative Agent in connection therewith; and

  

	 	(ii)	to the payment in full of the Obligations in accordance with Section 13.2 hereof; 

  
 provided, however, that the Administrative Agent may in its discretion apply funds comprising the proceeds of sale of the
Group 1 Pledged Securities to pay the cost (i) of completing any Item of Product owned in whole or in part by any Credit Party in any stage of production, and (ii) of making delivery to the distributors of such Item of Product. Any amounts remaining
after such payment in full shall be remitted to the appropriate Pledgor, or as a court of competent jurisdiction may otherwise direct. 
  
 SECTION 10.7. Securities Act, etc. In view of the position of each Pledgor in relation to the Group 1 Pledged Securities pledged by it, or because
of other present or future circumstances, a question may arise under the Securities Act of 1933, as amended, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar
statute as from time to time in effect being hereinafter called the “Federal Securities Laws”), with respect to any disposition of the Group 1 Pledged Securities permitted hereunder. Each Pledgor understands that compliance with the
Federal Securities 
  

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 Laws may very strictly limit the course of conduct of the Administrative Agent if the Administrative Agent were to
attempt to dispose of all or any part of the Group 1 Pledged Securities, and may also limit the extent to which or the manner in which any subsequent transferee of any Group 1 Pledged Securities may dispose of the same. Similarly, there may be other
legal restrictions or limitations affecting the Administrative Agent in any attempt to dispose of all or any part of the Group 1 Pledged Securities under applicable Blue Sky or other state securities laws, or similar laws analogous in purpose or
effect. Under Applicable Law, in the absence of an agreement to the contrary, the Administrative Agent may perhaps be held to have certain general duties and obligations to a Pledgor to make some effort towards obtaining a fair price even though the
Obligations may be discharged or reduced by the proceeds of a sale at a lesser price. Each Pledgor waives to the fullest extent permitted by Applicable Law any such general duty or obligation to it, and the Pledgors and/or the Credit Parties will
not attempt to hold the Administrative Agent responsible for selling all or any part of the Group 1 Pledged Securities at an inadequate price, even if the Administrative Agent shall accept the first offer received or does not approach more than one
possible purchaser. Without limiting the generality of the foregoing, the provisions of this Section 11.7 would apply if, for example, the Administrative Agent were to place all or any part of the Group 1 Pledged Securities for private placement by
an investment banking firm, or if such investment banking firm purchased all or any part of the Group 1 Pledged Securities for its own account, or if the Administrative Agent placed all or any part of the Group 1 Pledged Securities privately with a
purchaser or purchasers. 
  
 SECTION 10.8. Continuation and
Reinstatement. Each Pledgor further agrees that its pledge hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored
by the Administrative Agent or the Lenders upon the bankruptcy or reorganization of any Pledgor or otherwise. 
  
 SECTION 10.9. Termination. The pledge referenced herein shall terminate when all of the Obligations shall have been fully paid and performed and
the Commitments shall have terminated, at which time the Administrative Agent shall promptly assign and deliver to the appropriate Pledgor, or to such Person or Persons as such Pledgor shall designate, against receipt, such of the Group 1 Pledged
Securities (if any) as shall not have been sold or otherwise applied by the Administrative Agent pursuant to the terms hereof and shall still be held by it hereunder, together with appropriate instruments of reassignment and release. Any such
reassignment shall be free and clear of all Liens, arising by, under or through the Administrative Agent but shall otherwise be without recourse upon or warranty by the Administrative Agent and at the expense of the Pledgors. 
  
 11. CASH COLLATERAL 
  
 SECTION 11.1. Cash Collateral Accounts. On or prior to the Closing Date, there shall be established with the
Administrative Agent a collateral account in the name of the Administrative Agent (the “Cash Collateral Account”), into which the appropriate Credit Parties shall from time to time deposit amounts pursuant to the express provisions
of this Credit Agreement requiring or permitting such deposits. Except to the extent otherwise provided in this Article 12, the Cash Collateral Accounts shall be under the sole dominion and control of the Administrative Agent. 
  

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 SECTION 11.2. Investment of Funds. 
  
 (a) The Administrative Agent is hereby authorized and directed to invest and reinvest the funds from time to time
transferred or deposited into the Cash Collateral Account, so long as no Event of Default has occurred and is continuing, on the instructions of the Borrower (provided, that any such instructions given orally shall be confirmed promptly in
writing) or, if the Borrower shall fail to give such instructions upon delivery of any such funds, in the sole discretion of the Administrative Agent, provided that in no event may the Borrower give instructions to the Administrative Agent to, or
may the Administrative Agent in its discretion, invest or reinvest funds in the Cash Collateral Account in other than Cash Equivalents. 
  
 (b) Any net income or gain on the investment of funds from time to time held in the Cash Collateral Account, shall be promptly reinvested by the
Administrative Agent as a part of the Cash Collateral Account; and any net loss on any such investment shall be charged against the Cash Collateral Account. 
  
 (c) None of the Administrative Agent, the Issuing Bank or the Lenders shall be a trustee for any member of the Credit Group, or shall have any obligations
or responsibilities, or shall be liable for anything done or not done, in connection with the Cash Collateral Account except for any acts of gross negligence or willful misconduct, except as expressly provided herein and except that the
Administrative Agent shall have the obligations of a secured party under the UCC. The Administrative Agent, the Issuing Bank and the Lenders shall not have any obligation or responsibility and shall not be liable in any way for any investment
decision made in accordance with this Section 12.2 or for any decrease in the value of the investments held in the Cash Collateral Account except for any acts of gross negligence or willful misconduct. 
  
 SECTION 11.3. Grant of Security Interest. For value received and to
induce the Issuing Bank to issue the Letters of Credit and the Lenders to participate in such Letters of Credit and make Loans to the Borrower as provided for in this Credit Agreement, as security for the payment of all of the Obligations, each of
the Credit Parties hereby assigns to the Administrative Agent (for the benefit of itself, the Issuing Bank and the Lenders) and grants to the Administrative Agent (for the benefit of itself, the Issuing Bank and the Lenders), a first and prior Lien
upon all of such Credit Party’s rights in and to the Cash Collateral Account, all cash, documents, instruments and securities from time to time held therein, and all rights pertaining to investments of funds in the Cash Collateral Account and
all products and proceeds of any of the foregoing. All cash, documents, instruments and securities from time to time on deposit in the Cash Collateral Account, and all rights pertaining to investments of funds in the Cash Collateral Account shall
immediately and without any need for any further action on the part of any of the Credit Parties, any Lender, the Issuing Bank or the Administrative Agent, become subject to the Lien set forth in this Section 12.3, be deemed Collateral for all
purposes hereof and be subject to the provisions of this Credit Agreement. 
  
 SECTION 11.4. Remedies. At any time during the continuation of an Event of Default, the Administrative Agent may sell any documents, instruments and securities held in the Cash Collateral Account and may
immediately apply the proceeds thereof and any other cash held in the Cash Collateral Account in accordance with Section 8.7. 
  

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 12. THE ADMINISTRATIVE AGENT AND THE ISSUING BANK 
  
 SECTION 12.1. Administration by the Administrative Agent. 
  
 (a) The general administration of the Fundamental Documents and any other
documents contemplated by this Credit Agreement or any other Fundamental Document shall be by the Administrative Agent or its designees. Except as otherwise expressly provided herein, each of the Lenders hereby irrevocably authorizes the
Administrative Agent, at its discretion, to take or refrain from taking such actions as agent on its behalf and to exercise or refrain from exercising such powers under the Fundamental Documents, the Notes and any other documents contemplated by
this Credit Agreement or any other Fundamental Document as are expressly delegated by the terms hereof or thereof, as appropriate, together with all powers reasonably incidental thereto. The Administrative Agent shall have no duties or
responsibilities except as set forth in the Fundamental Documents. 
  
 (b) The Lenders and, where applicable, the Issuing bank hereby authorize the Administrative Agent (in its sole discretion): 
  

	 	(i)	in connection with the sale or other disposition of any asset included in the Collateral or the capital stock of any Guarantor, to the extent undertaken in accordance with the terms
of this Credit Agreement, to release a Lien granted to it (for the benefit of the Administrative Agent, the Issuing Bank and the Lenders) on such asset or capital stock and/or to release such Guarantor from its obligations hereunder;

  

	 	(ii)	to determine that the cost to the Borrower or another Credit Party is disproportionate to the benefit to be realized by the Administrative Agent, the Issuing Bank and the Lenders by
perfecting a Lien in a given asset or group of assets included in the Collateral and that the Borrower or other Credit Party should not be required to perfect such Lien in favor of the Administrative Agent (for the benefit of itself, the Issuing
Bank and the Lenders); 

  

	 	(iii)	to appoint subagents to be the holder of record of a Lien to be granted to the Administrative Agent (for the benefit of the Administrative Agent, the Issuing Bank and the Lenders);

  

	 	(iv)	to confirm in writing the right of Quiet Enjoyment of licensees pursuant to the terms of Section 8.13; 

  

	 	(v)	in connection with an Item of Product being produced by a member of the Credit Group, the principal photography of which is being done outside the United States of America, to
approve arrangements with such member of the Credit Group as shall be satisfactory to the Administrative Agent with respect to the temporary storage of the original negative film, the original sound track materials or other Physical Materials of
such Item of Product in a production laboratory located outside the United States of America; 

  

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	 	(vi)	to enter into and perform its obligations under the other Fundamental Documents; 

  

	 	(vii)	to enter into intercreditor and/or subordination agreements on terms acceptable to the Administrative Agent with (A) 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 the collective bargaining agreements, (B) any licensee or licensor having any rights to any Item of Product, (C) Persons providing any services in connection with any
Item of Product, or (D) Persons providing tax benefit and/or production subsidies or co-financing for Items of Product; 

  

	 	(viii)	to accept (and, subject to compliance with Section 14.10 (c), the Administrative Agent shall accept) commitments from Persons which satisfy the definition of “Eligible
Assignee” for an additional $25,000,000 of Commitments not committed to as of the date hereof as contemplated by Section 14.10(c) hereof, by (i) obtaining an executed counterpart of this Credit Agreement from each such Person, (ii) amending the
Schedule of Commitments to add each such Person’s name and Commitment and circulating the amended Schedule of Commitments to the Lenders, the Issuing Bank and the Borrower, and (iii) recording in the Register (as defined in Section 14.3(e)
hereof) the name and address of each such Person and the Commitment of, and principal amount of the Loans owing to it, whereupon (x) the Borrower shall execute and deliver to the Administrative Agent a Note (substantially in the form of Exhibit
A hereto) to the order of each such Person in an amount equal to its Commitment, and (y) each such Person shall be a party hereto, have the rights and obligations of a Lender hereunder and under the other Fundamental Documents and shall be bound
by the provisions hereof; and 

  

	 	(ix)	upon the acceptance of additional commitments pursuant to Section 13.1(b)(viii) hereof, to allocate equitably among the Lenders the Alternate Base Rate Loans and LIBOR Loans so as
to achieve pro rata status. 

  
 SECTION 12.2.
Payments. As between the Administrative Agent, the Issuing Bank and the Lenders, any amounts received by the Administrative Agent in connection with the Fundamental Documents, the application of which is not otherwise provided for, shall be
applied, first, to pay the accrued but unpaid Commitment Fees in accordance with each Lender’s Percentage, second, to pay accrued but unpaid interest on the Notes in accordance with the amount of outstanding Loans owed to each
Lender, third, to pay the principal balance outstanding on the Notes (with amounts payable on the principal balance outstanding on the Notes in accordance with the amount of outstanding Loans owed to each Lender) and amounts outstanding under
Swap Agreements, and fourth, to pay any other amounts then due under this Credit Agreement. All amounts to be paid to any Lender by the Administrative Agent shall be credited to that Lender, after collection by the Administrative Agent, in
immediately available funds either by wire transfer or deposit in such Lender’s correspondent account with the Administrative Agent, or as such Lender and the Administrative Agent shall from time to time agree. 
  

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 SECTION 12.3. Sharing of Setoffs and Cash Collateral. Each of the Lenders agrees that if it shall,
through the exercise of a right of banker’s Lien, setoff or counterclaim against any member of the Credit Group (including, but not limited to, a secured claim under Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim and received by such Lender under any applicable bankruptcy, insolvency or other similar law) or otherwise, obtain payment in respect of its Loans as a result of which the unpaid portion of
its Loans and L/C Exposure is proportionately less than the unpaid portion of Loans and L/C Exposure of any of the other Lenders (a) it shall promptly purchase at par (and shall be deemed to have thereupon purchased) from such other Lenders a
participation in the Loans or Letters of Credit of such other Lenders, so that the aggregate unpaid principal amount of each of the Lender’s Loans and its participation in Loans and Letters of Credit of the other Lenders shall be in the same
proportion to the aggregate unpaid principal amount of all Loans then outstanding and L/C Exposure as the principal amount of its Loans and L/C Exposure prior to the obtaining of such payment was to the principal amount of all Loans outstanding
prior to the obtaining of such payment, and (b) such other adjustments shall be made from time to time as shall be equitable to ensure that the Lenders share such payment pro rata. If all or any portion of such excess payment is thereafter recovered
from the Lender which originally received such excess payment, such purchase (or portion thereof) shall be canceled and the purchase price restored to the extent of such recovery. The Credit Parties expressly consent to the foregoing arrangements
and agree that any Lender or Lenders holding (or deemed to be holding) a participation in a Note or Letter of Credit may exercise any and all rights of banker’s Lien, setoff or counterclaim with respect to any and all moneys owing by the
Borrower to such Lender or Lenders as fully as if such Lender or Lenders held a Note and was the original obligee thereon, in the amount of such participation. 
  

SECTION 12.4. Notice to the Lenders. Upon receipt by the Administrative Agent from any of the Credit Parties of any communication calling for an
action on the part of the Lenders, or upon notice to the Administrative Agent of any Event of Default, the Administrative Agent will in turn immediately inform the other Lenders in writing (which shall include facsimile communications) of the nature
of such communication or of the Event of Default, as the case may be. 
  
 SECTION 12.5. Liability of the Administrative Agent and Issuing Bank. 
  
 (a) The Administrative Agent or the Issuing Bank, when acting on behalf of the Lenders, may execute any of its duties under this Credit Agreement or the other Fundamental Documents by or through its officers, agents
or employees and neither the Administrative Agent, the Issuing Bank nor officers, agents or employees shall be liable to the Lenders or any of them for any action taken or omitted to be taken in good faith, nor be responsible to the Lenders or to
any of them for the consequences of any oversight or error of judgment, or for any loss, unless the same shall happen through its gross negligence or willful misconduct. The Administrative Agent, the Issuing Bank and their respective directors,
officers, agents, and employees shall in no event be liable to the Lenders or to any of them for any action taken or omitted to be taken by it pursuant to instructions received by it from the Required Lenders or in reliance upon the 
  

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 advice of counsel selected by it with reasonable care. Without limiting the foregoing, neither the Administrative Agent,
the Issuing Bank nor any of their respective directors, officers, employees, or agents shall be responsible to any of the Lenders for the due execution, validity, genuineness, effectiveness, sufficiency, or enforceability of, or for any statement,
warranty, or representation in, or for the perfection of any security interest contemplated by, this Credit Agreement, any other Fundamental Document or any related agreement, document or order, or for freedom of any of the Collateral or any of the
Group 1 Pledged Securities from prior Liens or security interests, or shall be required to ascertain or to make any inquiry concerning the performance or observance by the Borrower or any other member of the Credit Group of any of the terms,
conditions, covenants, or agreements of this Credit Agreement, any other Fundamental Document, or any related agreement or document. 
  
 (b) None of the Administrative Agent (in its capacity as agent for the Lenders), the Issuing Bank or any of their respective directors, officers,
employees or agents shall have any responsibility to the Borrower or any other member of the Credit Group on account of the failure or delay in performance or breach by any of the Lenders (other than JPMorgan Chase Bank, N.A.) of any of such
Lender’s obligations under this Credit Agreement, the other Fundamental Documents or any related agreement or document or in connection herewith or therewith. No Lender nor any of its directors, officers, employees or agents shall have any
responsibility to the Borrower or any other member of the Credit Group on account of the failure or delay in performance or breach by any other Lender of such other Lender’s obligations under this Credit Agreement, the other Fundamental
Documents or any related agreement or document or in connection herewith or therewith. 
  
 (c) Each of the Administrative Agent, in its capacity as agent for the Lenders hereunder, and the Issuing Bank shall be entitled to rely on any communication, instrument or document believed by it to be genuine or
correct and to have been signed or sent by a Person or Persons believed by it to be the proper Person or Persons, and it shall be entitled to rely on advice of legal counsel, independent public accountants, and other professional advisers and
experts selected by it. 
  
 SECTION 12.6. Reimbursement and
Indemnification. Each of the Lenders agrees (i) to reimburse the Administrative Agent for such Lender’s Pro Rata Share of any expenses and fees incurred for the benefit of the Lenders under the Fundamental Documents, including, without
limitation, counsel fees and compensation of agents and employees paid for services rendered on behalf of the Lenders, and any other expense incurred in connection with the operations or enforcement thereof not reimbursed by or on behalf of the
Borrower, (ii) to indemnify and hold harmless the Administrative Agent and any of its directors, officers, employees, or agents, on demand, in accordance with such Lender’s Percentage, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against, it or any of them in any way relating to or arising out of any of the
Fundamental Documents or any related agreement or document, or any action taken or omitted by it or any of them under any Fundamental Documents or any related agreement or document, to the extent not reimbursed by or on behalf of the Borrower or any
other member of the Credit Group (except such as shall result from its gross negligence or willful misconduct) and (iii) to indemnify and hold harmless the Issuing Bank and any of its directors, officers, 
  

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 employees, or agents, on demand, in the amount of its Percentage, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against it or any of them in any way relating to or arising out of the issuance
of any Letters of Credit or the failure to issue Letters of Credit if such failure or issuance was at the direction of Required Lenders (except as shall result from the gross negligence or willful misconduct of the Person to be reimbursed,
indemnified or held harmless, as applicable). To the extent indemnification payments made by the Lenders pursuant to this Section 13.6 are subsequently recovered by the Administrative Agent from a Credit Party, the Administrative Agent will promptly
refund such previously paid indemnity payments to the Lenders. 
  
 SECTION 12.7. Rights of Administrative Agent. It is understood and agreed that the Administrative Agent shall have the same duties, rights and powers as a Lender hereunder (including the right to give such instructions) as any of the
other Lenders and may exercise such rights and powers, as well as its rights and powers under other agreements and instruments to which it is or may be party, and engage in other transactions with any member of the Credit Group or Affiliate thereof,
as though it were not the Administrative Agent of the Lenders under this Credit Agreement and the other Fundamental Documents. 
  
 SECTION 12.8. Independent Investigation by Lenders. Each of the Lenders acknowledges that it has decided to enter into this Credit Agreement and
the other Fundamental Documents and to make the Loans and participate in Letters of Credit hereunder based on its own analysis of the transactions contemplated hereby and of the creditworthiness of the Credit Parties and agrees that the
Administrative Agent shall not bear any responsibility therefor. 
  
 SECTION 12.9. Agreement of Required Lenders. Except as set forth in Section 14.11 hereof, upon any occasion requiring or permitting an approval, consent, waiver, election or other action on the part of the Lenders, action shall be
taken by the Administrative Agent for and on behalf of, or for the benefit of, all Lenders upon the direction of the Required Lenders and any such action shall be binding on all Lenders. No amendment, modification, consent or waiver shall be
effective except in accordance with the provisions of Section 14.11 hereof. 
  
 SECTION 12.10. Notice of Transfer. The Administrative Agent may deem and treat any Lender which is a party to this Credit Agreement as the owner of such Lender’s respective portions of the Loans for all
purposes, unless and until a written notice of the assignment or transfer thereof executed by any such Lender shall have been received by the Administrative Agent and become effective in accordance with Section 14.3 hereof. 
  
 SECTION 12.11. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving ten days’ prior written notice thereof to the Lenders and the Borrower, but such resignation shall not become effective until acceptance by a successor agent of its appointment pursuant hereto. Upon any
such resignation, the retiring Administrative Agent shall consult with the Borrower and promptly appoint a successor agent from among the Lenders which successor shall be experienced and sophisticated in entertainment industry lending;
provided, that such replacement is reasonably acceptable (as evidenced in writing) to the Required Lenders and the Borrower; provided, however, that such approval by the Borrower shall not be required at any time when a Default
or Event of Default is continuing. If no 
  

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 successor agent shall have been so appointed by the retiring Administrative Agent and shall have accepted such
appointment, within 30 days after the retiring agent’s giving of notice of resignation, the Borrower may appoint a successor agent (which successor may be replaced by the Required Lenders; provided, that such successor is experienced and
sophisticated in entertainment industry lending and reasonably acceptable to the Borrower), which shall be either a Lender or a commercial bank organized under the laws of the United States of America or of any State thereof and shall have a
combined capital and surplus of at least $250,000,000 and shall be experienced and sophisticated in entertainment industry lending. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor agent, such successor agent
shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Credit
Agreement, the other Fundamental Documents and any other credit documentation. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article 13 and Article 14 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Credit Agreement. 
  
 SECTION 12.12. Successor Issuing Bank. The Issuing Bank may resign at any time by giving ten days’ prior written notice thereof to the Lenders
and the Borrower, but such resignation shall not become effective until acceptance by a successor Issuing Bank of its appointment pursuant hereto. Upon any such resignation, the retiring Issuing Bank shall consult with the Borrower and promptly
appoint a successor Issuing Bank from among the Lenders which is experienced and sophisticated in entertainment industry lending, provided that such replacement is reasonably acceptable (as evidenced in writing) to the Required Lenders and
the Borrower and has a credit rating at least as high as that of the Issuing Bank; provided, however, that such approval by the Borrower shall not be required at any time when a Default or Event of Default shall have occurred and be
continuing. If no successor Issuing Bank shall have been so appointed by the retiring Issuing Bank and shall have accepted such appointment within 30 days after the retiring Issuing Bank’s giving of notice of resignation, the Borrower may
appoint a successor Issuing Bank (which successor may be replaced by the Required Lenders; provided that such successor is reasonably acceptable to the Borrower), which shall be either a Lender or a commercial bank organized, licensed,
carrying on business under the laws of the United States of America or of any State thereof and shall have a combined capital and surplus of at least US$250,000,000. Upon the acceptance of any appointment as Issuing Bank hereunder by a successor
Issuing Bank, such successor Issuing Bank shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Issuing Bank, and the retiring Issuing Bank shall be discharged from its duties and obligations
under this Credit Agreement, the other Fundamental Documents and any other credit documentation, except with respect to Letters of Credit which are outstanding at the time of the resignation unless the successor Issuing Bank replaces the retiring
Issuing Bank as the issuing bank on such Letters of Credit. The Borrower and each Lender hereby agrees that each will use its commercially reasonable efforts to replace any such outstanding Letters of Credit issued by the retiring Issuing Bank.
After any retiring Issuing Bank’s resignation hereunder as Issuing Bank, the provisions of this Article 13 and Article 14 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Issuing Bank under this
Credit Agreement. 
  

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 13. MISCELLANEOUS 
  

SECTION 13.1. Notices. 
  
 (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices
and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 
  

	 	(i)	if to any Credit Party, to it at Anchor Bay Entertainment, Inc., c/o IDT Entertainment, Inc., 520 Broad Street, Newark, NJ 07102 (Telecopy No. (973) 438-1741), Attention: Sam
Abraham, with a copy to O’Melveny and Myers LLP, 1999 Avenue of the Stars, Suite 700, Los Angeles, California 90067, Attention: Stephen Scharf and Lesley G. Freeman, (Telecopy No. (310) 246-6779); 

  

	 	(ii)	if to the Administrative Agent or to JPMorgan Chase Bank, N.A., to (x) JPMorgan Chase Bank, N.A., 277 Park Avenue, New York, New York 10172, Attention: Garrett J. Verdone (Telecopy
No. (646) 534-3079), with copies to (y) JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention: Pearl Esparza (Telecopy No. (713) 750-2358) and to (z) J.P. Morgan Securities Inc., 1999
Avenue of the Stars, 27th Floor, Los Angeles, California 90067, Attention: Jason Somerville (Telecopy No. (310) 860-7260); and 

  

	 	(iii)	if to any other Lender, to it at its address (or telecopy number) set forth on the signature pages hereto. 

  
 (b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided, that the foregoing shall not apply to notices pursuant to Article 2 unless otherwise agreed by the Administrative
Agent, the Issuing Bank (if applicable) and the applicable Lender. Each of the Administrative Agent, the Issuing Bank and the Borrower may, each in its discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided, that approval of such procedures may be limited to particular notices or communications. 
  

(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to all of the other parties
hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Credit Agreement shall be deemed to have been given on the date of receipt. 
  
 SECTION 13.2. Survival of Agreement, Representations and Warranties,
etc. All warranties, representations and covenants made by the Parent, TLL or any of the Credit Parties herein, in any other Fundamental Document or in any certificate or other instrument delivered by it or on its behalf in connection with this
Credit Agreement or any other Fundamental Document shall be considered to have been relied upon by the Administrative 
  

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 Agent, the Issuing Bank and the Lenders and, except for any terminations, amendments, modifications or waivers thereof in
accordance with the terms hereof, shall survive the making of the Loans herein contemplated and the execution and delivery to the Administrative Agent of the Notes regardless of any investigation made by the Administrative Agent, the Issuing Bank or
the Lenders or on their behalf and shall continue in full force and effect so long as any Obligation is outstanding and unpaid and so long as the Commitments have not been terminated. All statements in any such certificate or other instrument shall
constitute representations and warranties by the Credit Parties hereunder. 
  
 SECTION 13.3. Successors and Assigns; Syndications; Loan Sales; Participations. 
  
 (a) Whenever in this Credit Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of
such party; provided, however, that neither the Borrower nor any other Credit Party may assign its rights hereunder without the prior written consent of the Administrative Agent and all Lenders, and all covenants, promises and
agreements by or on behalf of any of the Credit Parties which are contained in this Credit Agreement shall inure to the benefit of the successors and assigns of the Administrative Agent, the Issuing Bank and the Lenders. 
  
 (b) Each of the Lenders may (but only with the prior written consent of the
Administrative Agent and the Issuing Bank, which consent shall not be unreasonably withheld or delayed and, at any time prior to the occurrence of a Default or Event of Default, with the prior written consent of the Borrower, which consent will not
be unreasonably withheld or delayed) assign to an Eligible Assignee all or a portion of its interests, rights and obligations under this Credit Agreement (including, without limitation, all or a portion of its Commitment and the same portion of all
Loans at the time owing to it, the Notes held by it and its rights and obligations with regard to any Letters of Credit); provided, however, that (i) each assignment shall be of a constant, and not a varying, percentage of the
assigning Lender’s interests, rights and obligations under this Credit Agreement, (ii) each assignment shall be in a minimum Commitment amount (or at any time after the Commitment Termination Date, minimum aggregate amount of Loans and L/C
Exposure) equal to $2,500,000, and (iii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register (as defined below), an Assignment and Assumption, together with the
assigning Lender’s original Note and a processing and recordation fee of $3,500 to be paid to the Administrative Agent by the assigning Lender or the assignee. Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Assumption, which effective date shall not (unless otherwise agreed to by the Administrative Agent) be earlier than five Business Days after the date of acceptance and recording by the Administrative
Agent, (x) the assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Assumption, have the rights and obligations of a Lender hereunder and under the other Fundamental Documents and shall be bound by the
provisions hereof, and (y) the assigning Lender thereunder shall, to the extent provided in such Assignment and Assumption, relinquish its rights and be released from its obligations under this Credit Agreement except that, notwithstanding such
assignment, any rights and remedies available to the Borrower for any breaches by such assigning Lender of its obligations hereunder while a Lender shall be preserved after such assignment and such Lender shall not be relieved of any liability to
the Borrower due 
  

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 to any such breach. In the case of an Assignment and Assumption covering all or the remaining portion of the assigning
Lender’s rights and obligations under this Credit Agreement, such assigning Lender shall cease to be a party hereto. 
  
 (c) Notwithstanding any provision herein otherwise requiring the consent of the Borrower, each Lender may at any time make an assignment of its interests,
rights and obligations under this Credit Agreement without the consent of the Borrower, to (i) any Affiliate of such Lender, (ii) any Person, or Affiliate of a Person, that manages such Lender (a “Related Fund”) or (iii) any other
Lender hereunder. Any such assignment to any Affiliate of the assigning Lender, a Related Fund or any other Lender hereunder shall not be subject to the requirement of Section 14.3(b) that the amount of the Commitment (or Loans or L/C Exposure if
applicable) of the assigning Lender subject to each assignment be in a minimum principal amount of $2,500,000, and any such assignment to any Affiliate of the assigning Lender shall not release the assigning Lender of its remaining obligations
hereunder, if any. 
  
 (d) By executing and delivering an
Assignment and Assumption, the assigning Lender thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than the representation and warranty that it is the legal and beneficial
owner of the interest being assigned thereby and that such interest is free and clear of any adverse claim, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or any other Fundamental Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Fundamental Documents or any other instrument or
document furnished pursuant hereto or thereto; (ii) such assignor Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any member of the Credit Group or the performance or observance by
any member of the Credit Group of any of their obligations under the Fundamental Documents or any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it has received a copy of this Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Sections 5.1(a) and 5.1(b) (if such financial statements shall have theretofore been delivered) and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and Assumption; (iv) such assignee agrees that it will, independently and without reliance upon the assigning Lender, the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Credit Agreement or any other Fundamental Document; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as the agent on its behalf and to exercise such powers under this Credit Agreement as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will be bound by the provisions of this Credit Agreement and will perform in accordance with their terms all of the obligations which by the terms of this Credit Agreement are required to be performed
by it as a Lender. 
  
 (e) The Administrative Agent (acting for
this purpose on behalf of the Borrower) shall maintain at its address at which notices are to be given to it pursuant to Section 14.1 a copy of each Assignment and Assumption and a register for the recordation of the names 
  

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 and addresses of the Lenders and the Commitments of, and principal amount of the Loans owing to, each Lender from time to
time (the “Register”). The entries in the Register shall be conclusive, in the absence of manifest error, and the Credit Parties, the Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of the Fundamental Documents. The Register shall be available for inspection by any Credit Party or any Lender at any reasonable time and from time to time upon reasonable prior notice.

  
 (f) Subject to the foregoing, upon its receipt of an
Assignment and Assumption executed by an assigning Lender and an assignee together with the assigning Lender’s original Note and the processing and recordation fee, the Administrative Agent shall, if such Assignment and Assumption has been
completed, is in the form of Exhibit I hereto, and has been consented to in writing by the Issuing Bank and, if applicable, the Borrower, (i) accept such Assignment and Assumption, and (ii) record the information contained therein in the
Register. Within five (5) Business Days after receipt of the notice, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent, in exchange for the surrendered Note, a new Note to the order of such assignee in an amount
equal to the Commitment assumed by it pursuant to such Assignment and Assumption and if the assigning Lender has retained a Commitment hereunder a new Note to the order of the assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Notes shall be in an aggregate principal amount equal to the aggregate principal amount of the surrendered Note and shall otherwise be in substantially the form of Exhibit A hereto. In addition the Credit Parties will
promptly, at their own expense, execute such amendments to the Fundamental Documents to which each is a party and such additional documents, and take such other actions as the Administrative Agent or the assignee Lender may reasonably request in
order to give such assignee Lender the full benefit of the Liens contemplated by the Fundamental Documents. 
  
 (g) Each of the Lenders may, without the consent of any of the Credit Parties, the Administrative Agent, the Issuing Bank or the other Lenders, sell
participations to one or more banks or other entities in all or a portion of its rights and obligations under this Credit Agreement (including, without limitation, all or a portion of its Commitment and the Loans owing to it and the Note held by
it); provided, however, that (i) such Lender’s obligations under this Credit Agreement shall remain unchanged, (ii) such participant shall not be granted any voting rights or any right to control the vote of such Lender under this
Credit Agreement, except with respect to proposed changes to interest rates, amount of Commitments, final maturity of any Loan, releases of all or substantially all the Collateral and fees (in each case, only as applicable to such participant),
(iii) any such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iv) the participating banks or other entities shall be entitled to the cost protection provisions contained in Sections 2.9,
2.10, 2.11, 2.13 (subject to the last sentence of this Section 14.3(g)) and 14.3 hereof but a participant shall not be entitled to receive pursuant to such provisions an amount larger than its share of the amount to which the Lender granting such
participation would have been entitled to receive, and (v) the Credit Parties, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s and its
participants’ rights and obligations under this Credit Agreement. No holder of a participating interest shall be entitled to the benefits of Section 2.13 with respect to withholding taxes under the law of the jurisdiction in which the Borrower
is located, unless the Borrower is notified of the participation sold to such holder and such holder agrees, for the benefit of the Borrower, to comply with Section 2.13(e) and Section 2.13(f) as though it were a Lender. 
  

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 (h) A Lender may, in connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 14.3, disclose to the assignee or participant or proposed assignee or participant, any information relating to any member of the Credit Group furnished to the Administrative Agent or such Lender by or on behalf
of the Borrower or another member of the Credit Group (provided that such proposed assignee or participant agrees to hold such information confidential in accordance with Section 14.18 hereof). 
  
 (i) Any assignment pursuant to paragraph (b) or (c) of this Section 14.3
shall constitute an amendment of the Schedule of Commitments as of the effective date of such assignment without any other further action required. 
  
 (j) The Credit Parties consent that any Lender may at any time and from time to time pledge or otherwise grant a security interest in any Loan or in any
Note evidencing the Loans (or any part thereof) to any Federal Reserve Bank. 
  
 SECTION 13.4. Expenses; Documentary Taxes. Whether or not the transactions hereby contemplated shall be consummated, the Borrower agrees to pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or the Arranger in connection with, or growing out of, the performance of due diligence, the syndication of the credit facility contemplated hereby, the negotiation, preparation, execution, delivery, waiver or modification and
administration of this Credit Agreement and any other documentation contemplated hereby, the making of the Loans, the issuance of the Letters of Credit, the Collateral, the Pledged Securities or any Fundamental Document, including but not limited
to, the reasonable out-of-pocket costs and reasonable internally allocated charges of audit or field examinations of the Administrative Agent in connection with the administration of this Credit Agreement, the verification of financial data and the
transactions contemplated hereby, and the reasonable fees and disbursements of Morgan, Lewis & Bockius, LLP, counsel for the Administrative Agent and any other local counsel that the Administrative Agent shall retain, and (ii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent or the Lenders in the enforcement or protection (as distinguished from administration) of the rights and remedies of the Lenders in connection with this Credit Agreement, the Notes, the
Letters of Credit or the other Fundamental Documents, or as a result of any transaction, action or non-action arising from any of the foregoing, including, but not limited to, the fees and disbursements of any counsel for the Administrative Agent or
the Lenders. Such payments shall be made on the date this Credit Agreement is executed by the Borrower and thereafter on demand. The Borrower agrees that it shall indemnify the Administrative Agent, the Issuing Bank and the Lenders from and hold
them harmless against any documentary taxes, assessments or charges made by any Governmental Authority by reason of the execution and delivery of this Credit Agreement or the Notes or the issuance of any Letters of Credit. The obligations of the
Borrower under this Section shall survive the termination of this Credit Agreement, the payment of the Loans and the expiration of the Letters of Credit. 
  

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 SECTION 13.5. Indemnity. The Credit Parties agree (a) to indemnify and hold harmless the
Administrative Agent, the Issuing Bank, the Arranger and the Lenders and their respective directors, officers, employees and agents (each an “Indemnified Party”) (to the full extent permitted by Applicable Law) from and against any
and all claims, demands, losses, judgments, damages and liabilities (including liabilities for penalties) incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not any Lender, the Administrative Agent, the Issuing Bank or the Arranger is a party thereto) related to the entering into and/or performance of any Fundamental Document or the use of the proceeds of any Loans or Letters of
Credit hereunder or the consummation of the transaction contemplated in any Fundamental Document, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other
proceeding (but excluding (i) any such losses, liabilities, claims, damages or expenses of an Indemnified Party to the extent they are found in a final judgment of a court to have been incurred by reason of the gross negligence or willful misconduct
of such Indemnified Party, (ii) litigation solely between a Credit Party or Credit Parties, on the one hand, and the Administrative Agent, the Issuing Bank or the Lenders, on the other hand, in connection with this Credit Agreement or the other
Fundamental Documents or in any way relating to the transactions contemplated hereby or thereby if, after final non-appealable judgment, the Administrative Agent, the Issuing Bank or the Lenders are not the prevailing party or parties in such
litigation and (iii) litigation among the Lenders or between the Administrative Agent and/or the Issuing Bank and the Lenders in connection with this Credit Agreement, the Fundamental Documents or in any way relating to the transactions contemplated
thereby or hereby). If any proceeding, including any governmental investigation, shall be instituted involving any Indemnified Party, in respect of which indemnity may be sought against the Credit Parties, such Indemnified Party shall promptly
notify the Borrower in writing. The foregoing indemnity agreement includes any costs incurred by an Indemnified Party in connection with any action or proceeding in connection with which any officer or employee of the Administrative Agent, the
Issuing Bank, the Arranger or the Lenders is called as a witness or deponent, including, but not limited to, the reasonable fees and disbursements of Morgan, Lewis & Bockius LLP, counsel to the Administrative Agent, the Issuing Bank and the
Arranger and any reasonable out-of-pocket costs incurred by the Administrative Agent, the Issuing Bank, the Arranger or the Lenders in appearing as a witness or in otherwise complying with legal process served upon them. The obligations of the
Borrower under this Section 13.5 shall survive the termination of this Credit Agreement, the payment of the Loans and the reimbursement of all L/C Exposure and shall inure to the benefit of any Person who was a Lender notwithstanding such
Person’s assignment of all its Loans, L/C Exposure and Commitment hereunder. 
  
 If the Parent, TLL or a Credit Party shall fail to do any act or thing which it has covenanted to do hereunder or under a Fundamental Document, or any representation or warranty of the Parent, TLL or a Credit Party
shall be breached, the Administrative Agent may (but shall not be obligated to) do the same or cause it to be done or remedy any such breach and there shall be added to the Obligations hereunder the cost or expense incurred by the Administrative
Agent in so doing, and any and all amounts expended by the Administrative Agent in taking any such action shall be repayable to it upon its demand therefor and shall bear interest at a rate per annum of 2% in excess of the rate then in effect for
Alternate Base Rate Loans from time to time in effect from the date advanced to the date of repayment. 
  

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 SECTION 13.6. CHOICE OF LAW. THIS CREDIT AGREEMENT AND THE NOTES SHALL IN ALL RESPECTS
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK WHICH ARE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE AND, IN THE CASE OF PROVISIONS RELATING TO INTEREST RATES, ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS
AND PRACTICES FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE “UNIFORM CUSTOMS”) AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.

  
 SECTION 13.7. WAIVER OF JURY TRIAL. TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH CREDIT PARTY HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY
ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS CREDIT AGREEMENT, THE SUBJECT MATTER HEREOF, ANY OTHER FUNDAMENTAL DOCUMENT OR THE SUBJECT MATTER THEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND
WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH CREDIT PARTY ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THE PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH OTHER PARTIES HAVE RELIED, ARE
RELYING AND WILL RELY IN ENTERING INTO THIS CREDIT AGREEMENT AND ANY OTHER FUNDAMENTAL DOCUMENT. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 14.7 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY CREDIT PARTY TO THE
WAIVER OF ITS RIGHTS TO TRIAL BY JURY. 
  
 SECTION
13.8. WAIVER WITH RESPECT TO DAMAGES. EACH CREDIT PARTY ACKNOWLEDGES THAT NEITHER THE ADMINISTRATIVE AGENT, THE ARRANGER, THE ISSUING BANK NOR ANY LENDER HAS ANY FIDUCIARY RELATIONSHIP WITH, OR FIDUCIARY DUTY TO, ANY CREDIT PARTY ARISING
OUT OF OR IN CONNECTION WITH THIS CREDIT AGREEMENT OR ANY OTHER FUNDAMENTAL DOCUMENT AND THE RELATIONSHIP BETWEEN THE ADMINISTRATIVE AGENT, THE ARRANGER, THE ISSUING BANK AND THE LENDERS, ON THE ONE HAND, AND THE CREDIT PARTIES, ON THE OTHER HAND,
IN CONNECTION THEREWITH IS SOLELY THAT OF DEBTOR AND CREDITOR. TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO CREDIT PARTY SHALL ASSERT, AND EACH CREDIT PARTY HEREBY WAIVES, ANY CLAIMS AGAINST THE ADMINISTRATIVE AGENT, THE ARRANGER, THE ISSUING BANK
AND THE LENDERS ON ANY THEORY OF 
  

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 LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING
OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS CREDIT AGREEMENT, ANY FUNDAMENTAL DOCUMENT, ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
  
 SECTION 13.9. No Waiver. No failure on the part of the Administrative
Agent, the Issuing Bank or any Lender to exercise, and no delay in exercising, any right, power or remedy hereunder, under the Notes or any other Fundamental Document shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law. 
  
 SECTION 13.10. Amendments, etc. 
  
 (a) No modification, amendment or waiver of any provision of this Credit
Agreement, and no consent to any departure by a Credit Party herefrom, shall in any event be effective unless the same shall be in writing and signed by the Required Lenders and the Administrative Agent, and acknowledged and agreed to by the
Borrower and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that (A) no such modification, amendment, waiver or consent shall, without the
written consent of all Lenders, (i) amend or modify any provision of this Credit Agreement which provides for the unanimous consent or approval of the Lenders, (ii) release any material amount of Collateral or any of the Pledged Securities (except
as contemplated herein) or release any Guarantor from its obligations hereunder (except as contemplated herein), (iii) alter the final scheduled maturity or principal amount of any Loan, or decrease the rate of interest payable thereon, or decrease
the rate at which the Commitment Fees accrue, or delay the fixed scheduled maturity of any payment required to be made under this Credit Agreement, (iv) subordinate the Obligations hereunder to other Indebtedness or subordinate the security
interests of the Administrative Agent in the Collateral except as permitted by Section 13.1, (v) amend the definition of “Required Lenders” to decrease the percentage of Lenders referred to therein, (vi) materially amend the definition of
“Collateral”, (vii) amend or modify this Section 14.11(a), (B) no such modification, amendment, waiver or consent shall increase the Commitment of any Lender without the written consent of such Lender, and (C) no such modification,
amendment, waiver or consent shall amend Section 2.2 hereof without the written consent of the Administrative Agent. No such amendment or modification may adversely affect the rights and obligations of the Administrative Agent hereunder without its
prior written consent. No notice to or demand on any of the Credit Parties shall entitle such Credit Party to any other or further notice or demand in the same, similar or other circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not such Note shall have been marked to indicate such amendment, modification, waiver or consent and any consent by any holder of such Note shall bind any Person subsequently
acquiring such Note, whether or not such Note is so marked. 
  

 109 

 (b) If any Lender (i) requests compensation under Sections 2.7(b), 2.10 or 2.13, or (ii) defaults in its
obligation to fund Loans hereunder or (iii) does not consent to any waiver, consent or modification requested by the Borrower (but only where the consent of all the Lenders is required for such waiver, consent or modification and the Borrower
obtains the waiver, consent or modification from all other Lenders), then the Borrower may, at its sole expense and effort and upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 14.3), all of its interests, rights and obligations under this Credit Agreement to another Lender or an Eligible Assignee which shall assume such obligations and which accepts such
assignment; provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent and the Issuing Bank in each’s sole and absolute discretion, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and L/C Exposure, accrued interest thereon, accrued fees and all other amounts then payable to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest and fees)
or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.10 or payments required to be made pursuant to Sections 2.7(b) or 2.13, such assignment will
result in a reduction in such compensation or payment on an ongoing basis. No Lender shall be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply. 
  
 (c) Subject to compliance with the procedures described in Section 13.1(b)(viii) and (ix) hereof, the Borrower may request that the Administrative Agent increase the Total Commitments subsequent to the Closing Date by up to $25,000,000,
provided that (i) no Default or Event of Default shall have occurred and be continuing or will exist after giving effect to such increase, (ii) the Borrower are in pro forma compliance with all covenants on the date of such
increase and for the most recently completed covenant testing period, after giving effect to such increase and any other appropriate pro forma adjustments acceptable to the Administrative Agent and (iii) the new lender proposed by the
Borrower is approved by the Administrative Agent and the Issuing Bank, such approval not to be unreasonably withheld. 
  
 SECTION 13.11. Severability. Any provision of this Credit Agreement or of the Notes which is invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without invalidating the remaining provisions hereof, and any such invalidity, illegality or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction. 
  
 SECTION 13.12. SERVICE OF PROCESS. EACH CREDIT PARTY (EACH A “SUBMITTING PARTY”) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW YORK IN NEW
YORK COUNTY AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON THIS CREDIT AGREEMENT, THE SUBJECT MATTER HEREOF,
ANY OTHER FUNDAMENTAL DOCUMENT AND THE SUBJECT MATTER THEREOF. EACH SUBMITTING PARTY TO THE EXTENT PERMITTED BY APPLICABLE LAW (A) 
  

 110 

 HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR
OTHER PROCEEDING BROUGHT IN THE ABOVE-NAMED COURTS, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF SUCH COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS CREDIT AGREEMENT, THE SUBJECT MATTER HEREOF, THE OTHER FUNDAMENTAL DOCUMENTS OR THE SUBJECT MATTER THEREOF (AS APPLICABLE) MAY NOT BE ENFORCED IN OR BY
SUCH COURT, (B) HEREBY WAIVES THE RIGHT TO REMOVE ANY SUCH ACTION, SUIT OR PROCEEDING INSTITUTED BY THE ADMINISTRATIVE AGENT OR A LENDER IN STATE COURT TO FEDERAL COURT, AND (C) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY SUCH ACTION, SUIT OR
PROCEEDING ANY OFFSETS OR COUNTERCLAIMS EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE FROM THE SAME SUBJECT MATTER. EACH SUBMITTING PARTY HEREBY CONSENTS TO SERVICE OF PROCESS BY MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN TO
IT PURSUANT TO SECTION 14.1 HEREOF. EACH SUBMITTING PARTY AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF EACH OF THE OTHER SUBMITTING PARTIES. FINAL JUDGMENT AGAINST ANY
SUBMITTING PARTY IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN ANY OTHER JURISDICTION (X) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT
AND OF THE AMOUNT OF INDEBTEDNESS OR LIABILITY OF THE SUBMITTING PARTY THEREIN DESCRIBED, OR (Y) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE ADMINISTRATIVE AGENT OR A
LENDER MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST A SUBMITTING PARTY OR ANY OF ITS ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED STATES OF AMERICA OR OF ANY COUNTRY OR PLACE WHERE THE SUBMITTING PARTY OR SUCH
ASSETS MAY BE FOUND. 
  
 SECTION 13.13. Headings.
Section headings used herein and the Table of Contents are for convenience only and are not to affect the construction of or be taken into consideration in interpreting this Credit Agreement. 
  
 SECTION 13.14. Execution in Counterparts. This Credit Agreement may be
executed by facsimile and in any number of counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same instrument. 
  

 111 

 SECTION 13.15. Subordination of Intercompany Indebtedness, Receivables and Advances. 

 
 (a) Each Credit Party hereby agrees that any intercompany Indebtedness or
other intercompany receivables or intercompany advances of any other Credit Party, directly or indirectly, in favor of such Credit Party of whatever nature at any time outstanding shall be completely subordinate in right of payment to the prior
payment in full of the Obligations, and that no payment on any such Indebtedness, receivable or advance shall be made (i) except intercompany receivables and intercompany advances permitted pursuant to the terms hereof may be repaid and intercompany
Indebtedness permitted pursuant to the terms hereof may be repaid, in each case so long as no Default or Event of Default shall have occurred and be continuing, and (ii) except as specifically consented to by all the Lenders in writing, until the
prior payment in full of all the Obligations and termination of the Commitments. 
  
 (b) In the event that any payment on any such Indebtedness shall be received by such Credit Party other than as permitted by Section 14.15(a) before payment in full of all Obligations and termination of the
Commitments, such Credit Party shall receive such payments and hold the same in trust for, segregate the same from its own assets and shall immediately pay over to, the Administrative Agent on behalf of itself, the Issuing Bank and the Lenders all
such sums to the extent necessary so that the Administrative Agent, the Issuing Bank and the Lenders shall have been paid all Obligations owed or which may become owing. 
  
 SECTION 13.16. USA Patriot Act. Each Lender hereby notifies the Borrower that, pursuant to the requirements of the
USA Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in
accordance with the USA Patriot Act. 
  
 SECTION 13.17. Entire
Agreement. This Credit Agreement (including the Exhibits and Schedules hereto) represents the entire agreement of the parties with regard to the subject matter hereof and the terms of any letters and other documentation entered into between any
of the parties hereto (other than the Fee Letter) prior to the execution of this Credit Agreement which relate to Loans to be made hereunder and the Letters of Credit to be issued hereunder shall be replaced by the terms of this Credit Agreement.

  
 SECTION 13.18. Confidentiality. Each of the
Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to it and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by Applicable Laws or by any subpoena or similar legal process, (d) to any other party to this Credit Agreement, (e) in connection with the exercise
of any remedies hereunder or any suit, action or proceeding relating to this Credit Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any
assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Credit Agreement, or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (g) with the consent of the Borrower, or (h) to the extent such Information (x) becomes publicly 
  

 112 

 available other than as a result of a breach of this Section, or (y) becomes available to the Administrative Agent, the
Issuing Bank or any Lender on a non-confidential basis from a source other than a member of the Credit Group. For the purposes of this Section, “Information” means all information received from any Credit Party relating to any
member of the Credit Group or its business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by such Credit Party; provided, that in
the case of information received from a Credit Party after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

  
 [Signature Pages Follow] 
  

 113 

 IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed as of the
day and the year first written. 
  

			
	BORROWER:
	
	ANCHOR BAY ENTERTAINMENT, INC.
		
	By	 	  

	Name:	 	 
	Title:	 	 
	
	GUARANTORS:
	
	MANGA ENTERTAINMENT LIMITED
		
	By	 	  

	Name:	 	 
	Title:	 	 
	
	MANGA ENTERTAINMENT, INC.
		
	By	 	  

	Name:	 	 
	Title:	 	 
	
	NEW ARC ENTERTAINMENT, INC.
		
	By	 	  

	Name:	 	 
	Title:	 	 

  
 2 
  
 [Signature Page to Credit, Security, Guaranty and Pledge Agreement]

			
	ABE R2COMMUNICATIONS, INC.
		
	By	 	  

	Name:	 	 
	Title:	 	 
	
	ABE R2VIDEO, L.P.
	
	 By ABE R2Communications, Inc.,
 its General
Partner

		
	By	 	  

	Name:	 	 
	Title:	 	 
	
	PARENT:
	
	IDT ENTERTAINMENT, INC.
		
	By	 	  

	Name:	 	 
	Title:	 	 

  
 3 
  
 [Signature Page to Credit, Security, Guaranty and Pledge Agreement]

			
	LENDERS:
	
	JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, individually, as Administrative
Agent and as Issuing Bank
		
	By	 	  

	Name:	 	 
	Title:	 	 

  
 4 
  
 [Signature Page to Credit, Security, Guaranty and Pledge Agreement]

			
	NATIONAL CITY BANK
		
	By	 	  

	Name:	 	 
	Title:	 	 

  
 5 
  
 [Signature Page to Credit, Security, Guaranty and Pledge Agreement]

			
	U.S. BANK NATIONAL ASSOCIATION
		
	By	 	  

	Name:	 	 
	Title:	 	 

  
 6 
  
 [Signature Page to Credit, Security, Guaranty and Pledge Agreement]

			
	BAYERISCHE HYPO-UND VEREINSBANK AG
		
	By	 	  

	Name:	 	 
	Title:	 	 

  
 7 
  
 [Signature Page to Credit, Security, Guaranty and Pledge Agreement]

			
	ISRAEL DISCOUNT BANK OF NEW YORK
		
	By	 	  

	Name:	 	 
	Title:	 	 

  
 8 
  
 [Signature Page to Credit, Security, Guaranty and Pledge Agreement]

 SCHEDULE 1 
  
 Schedule of Commitments 
  

				
	 Lenders

	  	Commitment

	 JPMorgan Chase Bank, N.A.
	  	$	15,000,000
	 National City Bank
	  	$	15,000,000
	 U.S. Bank National Association
	  	$	10,000,000
	 Bayerische Hypo-und Vereinsbank AG
	  	$	5,000,000
	 Israel Discount Bank of New York
	  	$	5,000,000
	 	  	
	

	 TOTAL:
	  	$	50,000,000
	 	  	
	

 SCHEDULE 2 
  
 Guarantors 
  
 Manga Entertainment Limited 
 Manga Entertainment, Inc. 
 New Arc Entertainment, Inc. 
 ABE R2Communications, Inc. 
 ABE R2Video, L.P.Second Amendment to Employment Agreement

 Exhibit 10.1 
  
 SECOND AMENDMENT TO 
 EMPLOYMENT AGREEMENT 
  
 THIS SECOND AMENDMENT is made and entered into as of April 22, 2005 by and between XPEDITE SYSTEMS, INC., a Delaware corporation (the “Company”), and T. LEE PROVOW (the “Employee”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, the Company and the Employee entered into an Employment
Agreement as of August 1, 2003, which was amended by a First Amendment to Employment Agreement as of August 1, 2004 (as so amended, the “Original Agreement”); and 
  
 WHEREAS, the Company and the Employee desire to amend the Original Agreement as set forth herein; and 
  
 WHEREAS, capitalized terms not defined herein shall have the meanings
ascribed to them in the Original Agreement; 
  
 NOW,
THEREFORE, in consideration of and reliance upon the foregoing and other good and valuable consideration, the adequacy and sufficiency of which are hereby acknowledged, the Company and the Employee hereby amend the Original Agreement as follows:

  

	 	1.	All references to “PTEK Holdings, Inc. (“PTEK”)” shall be deemed references to “Premiere Global Services, Inc. (“PGI”)”.

  

	 	2.	Section 2.2 is amended by deleting it in its entirety and replacing it with the following: 

  
 “Section 2.2. Bonus Compensation. In addition to his base salary, the Employee will be entitled to earn an annual bonus
for each calendar year during the term of this Agreement in an amount to be determined based upon performance criteria and targets established from year to year by the Compensation Committee. The Employee’s target bonus for each calendar year
will be equal to one hundred percent (100%) of his annual base salary for such year, with 80% of the target bonus allocated to achievement of quarterly targets (i.e., 20% per quarter) and 20% allocated to achievement of annual targets. The timing of
determination and the date of payment of the bonus would be consistent with the payment dates for the other senior officers of PGI or the Company.” 
  

	 	3.	Except as otherwise provided herein, the terms and conditions of the Original Agreement shall remain in full force and effect. 

 IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment on the date hereof.

  

			
	XPEDITE SYSTEMS, INC.
		
	By:	 	 /s/ L. Scott Askins

	Its:	 	 SVP – Legal

	
	EMPLOYEE
	  
 /s/ T. Lee
Provow

	T. Lee Provow

  
  

 2

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