Document:

Warrant for 8,276 shares of common stock, issued August 5, 2005

 EXHIBIT 10.9 
  
 NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES. 
  
 MODTECH HOLDINGS,
INC. 
  
 WARRANT TO
PURCHASE COMMON STOCK 
  
 Warrant
No.:              
  
 Number of Shares of Common Stock: 8,276 
  
 Date of Issuance: August 5, 2005 (“Issuance Date”) 
  
 Modtech Holdings, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, AMPHORA
LIMITED, the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender
of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after the date hereof (the “Initial
Exercisability Date”), but not after 11:59 p.m., New York Time, on the Expiration Date (as defined below), EIGHT THOUSAND, TWO HUNDRED SEVENTY-SIX (8,276) fully paid nonassessable shares of Common Stock (as defined below) (the
“Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 15. This Warrant is one of the Warrants to purchase Common Stock (the “SPA
Warrants”) issued pursuant to Section 1 of that certain Securities Purchase 
  

	1	Insert number of shares equal to (x) 27% of the principal amount of Initial Notes issued to the Holder pursuant to the Securities Purchase Agreement divided by (y) the arithmetic
average of the Weighted Average Price (as defined in the Notes) of the Common Stock over the 5 trading days ending on the trading day immediately preceding the Subscription Date. 

 Agreement, dated as of December 30, 2004 (the “Subscription Date”), by and among the Company and the
investors (the “Buyers”) referred to therein (the “Securities Purchase Agreement”). 
  
 1. EXERCISE OF WARRANT. 
  
 (a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)),
this Warrant may be exercised by the Holder on any day on or after the Initial Exercisability Date, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”),
of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the
“Aggregate Exercise Price”) in cash or wire transfer of immediately available funds or (B) by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall
not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the first Business Day following the date on which the Company has received each of the Exercise Notice and the Aggregate
Exercise Price (or notice of a Cashless Exercise) (the “Exercise Delivery Documents”), the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Delivery Documents to the Holder and the
Company’s transfer agent (the “Transfer Agent”). On or before the third Business Day following the date on which the Company has received all of the Exercise Delivery Documents (the “Share Delivery Date”), the
Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission System, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of
Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or notification to the Company of a Cashless Exercise referred to in
Section 1(d), the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing
such Warrant Shares. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being
acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to
purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon
the exercise 
  

 - 2 - 

 of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole
number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. 
  

(b) Exercise Price. For purposes of this Warrant, “Exercise Price” means a price equal $8.70, subject to adjustment as
provided herein. 
  
 (c) Company’s Failure to Timely
Deliver Securities. Subject to Section 1(f), if the Company shall fail for any reason or for no reason to issue to the Holder within three (3) Business Days of receipt of the Exercise Delivery Documents, a certificate for the number of shares of
Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is
entitled upon the Holder’s exercise of this Warrant, then, in addition to all other remedies available to the Holder, the Company shall pay in cash to the Holder on each day after such third Business Day that the issuance of such shares of
Common Stock is not timely effected an amount equal to 1.5% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the
shares of Common Stock on the trading day immediately preceding the last possible date which the Company could have issued such shares of Common Stock to the Holder without violating Section 1(a). In addition to the foregoing, if within three (3)
trading days after the Company’s receipt of the facsimile copy of a Exercise Notice the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock on the Company’s share register or credit
the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon such holder’s exercise hereunder, and if on or after such trading day the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company
shall, within three Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such shares of Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the date of exercise. 
  
 (d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary, if a Registration Statement (as defined in the Registration Rights Agreement) covering the Warrant Shares that are the subject of the Exercise Notice (the
“Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (a
“Cashless Exercise”): 
  
 Net Number = (A x
B) - (A x C) 
  
                         B 
  

 - 3 - 

 For purposes of the foregoing formula: 
  
 A= the total number of shares with respect to which this Warrant is then being exercised. 
  
 B= the Closing Sale Price of the shares of Common Stock (as reported by
Bloomberg) on the date immediately preceding the date of the Exercise Notice. 
  
 C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise. 
  
 (e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 12. 
  
 (f) Limitations on Exercises. 
  
 (i) Beneficial Ownership. The Company shall not effect the exercise of this Warrant, and the Holder shall not have the right to exercise this
Warrant, to the extent that after giving effect to such exercise, such Person (together with such Person’s affiliates) would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock
outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Person and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this
Warrant beneficially owned by such Person and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such Person and its affiliates (including, without
limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this
paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. 
  

 - 4 - 

 For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the
Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case
may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of
the Holder, the Company shall within one Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including the SPA Securities and the SPA Warrants, by the Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By
written notice to the Company, the Holder may increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the sixty-first
(61st) day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to
the Holder and not to any other holder of SPA Warrants. 
  
 (ii)
Principal Market Regulation. The Company shall not be obligated to issue any shares of Common Stock upon exercise of this Warrant if the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the
Company may issue upon exercise or conversion, as applicable, of the SPA Warrants and SPA Securities without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “Exchange Cap”),
except that such limitation shall not apply in the event that the Company (A) obtains the approval of its shareholders as required by the applicable rules of the Principal Market for issuances of shares of Common Stock in excess of such amount or
(B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Required Holders. Until such approval or written opinion is obtained, no Buyer shall be
issued in the aggregate, upon exercise or conversion, as applicable, of any SPA Warrants or SPA Securities, shares of Common Stock in an amount greater than the product of the Exchange Cap multiplied by a fraction, the numerator of which is the
total number of shares of Common Stock underlying the SPA Warrants issued to such Buyer pursuant to the Securities Purchase Agreement on the Issuance Date and the denominator of which is the aggregate number of shares of Common Stock underlying

  

 - 5 - 

 the SPA Warrants issued to the Buyers pursuant to the Securities Purchase Agreement on the Issuance Date
(with respect to each Buyer, the “Exchange Cap Allocation”). In the event that any Buyer shall sell or otherwise transfer any of such Buyer’s SPA Warrants, the transferee shall be allocated a pro rata portion of such
Buyer’s Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of SPA Warrants
shall exercise all of such holder’s SPA Warrants into a number of shares of Common Stock which, in the aggregate, is less than such holder’s Exchange Cap Allocation, then the difference between such holder’s Exchange Cap Allocation
and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining holders of SPA Warrants on a pro rata basis in proportion to the shares of Common Stock underlying
the SPA Warrants then held by each such holder. 
  
 (g)
Insufficient Authorized Shares. If at any time while any of the Warrants remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance
upon exercise of the Warrants at least a number of shares of Common Stock equal to the 120% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of the Warrants then outstanding (the
“Required Reserve Amount”) (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to
allow the Company to reserve the Required Reserve Amount for the Warrants then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no
event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such
meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors
to recommend to the stockholders that they approve such proposal. 
  
 2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows: 
  
 (a) Adjustment upon Issuance of shares of Common Stock. If and whenever on or after the Subscription Date the
Company issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding
shares of Common Stock deemed to have been issued by the Company in connection with any Excluded Securities (as defined in the SPA Securities) for a consideration 
  

 - 6 - 

 per share (the “New Issuance Price”) less than a price (the “Applicable Price”) equal
to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be
reduced to an amount equal to the product of (A) the Exercise Price in effect immediately prior to such Dilutive Issuance and (B) the quotient determined by dividing (1) the sum of (I) the product derived by multiplying the Exercise Price in effect
immediately prior to such Dilutive Issuance and the number of shares of Common Stock Deemed Outstanding immediately prior to such Dilutive Issuance plus (II) the consideration, if any, received by the Company upon such Dilutive Issuance, by (2) the
product derived by multiplying (I) the Exercise Price in effect immediately prior to such Dilutive Issuance by (II) the number of shares of Common Stock Deemed Outstanding immediately after such Dilutive Issuance. Upon each such adjustment of the
Exercise Price hereunder, the number of Warrant Shares shall be adjusted to the number of shares of Common Stock determined by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares acquirable
upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. For purposes of determining the adjusted Exercise Price under this Section 2(a), the following
shall be applicable: 
  
 (i) Issuance of Options. If the
Company in any manner grants any Options and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon
exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section 2(a)(i), the “lowest price per share for which one share of Common Stock is issuable upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities” shall be equal
to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion, exercise or
exchange of any Convertible Security issuable upon exercise of such Option. No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities. 
  
 (ii) Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and
the lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have 

 

 - 7 - 

 been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities
for such price per share. For the purposes of this Section 2(a)(ii), the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange” shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security. No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such
Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(a), no further adjustment of the Exercise Price or number of Warrant Shares
shall be made by reason of such issue or sale. 
  
 (iii)
Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the Exercise Price and the number of Warrant Shares in effect at the time of such increase or
decrease shall be adjusted to the Exercise Price and the number of Warrant Shares which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the
date of issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect or a decrease in
the number of Warrant Shares. 
  
 (iv) Calculation of
Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the
parties thereto, the Options will be deemed to have been issued for a consideration of $0.01. If any shares of Common Stock, Options or Convertible Securities 
  

 - 8 - 

 are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor
will be deemed to be the net amount received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company
will be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Company will be the Closing Sale Price of such security on the date of receipt. If any
shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the
fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or
securities will be determined jointly by the Company and the Required Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair
value of such consideration will be determined within five (5) Business Days after the tenth day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination of such
appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company. 
  
 (v) Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a
dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case
may be. 
  
 (vi) Floor Price. Until such time as the
Company receives the Stockholder Approval (as defined in the Securities Purchase Agreement), no adjustment pursuant to this Section 2(a) shall cause the Exercise Price to be less than $8.56 (as adjusted for any stock dividend, stock split, stock
combination, reclassification or similar transaction). 
  
 (b) Adjustment upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common 
  

 - 9 - 

 Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be
proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any
adjustment under this Section 2(b) shall become effective at the close of business on the date the subdivision or combination becomes effective. 
  
 (c) Other Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price
and the number of Warrant Shares so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(c) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to
this Section 2. 
  
 3. RIGHTS UPON DISTRIBUTION OF ASSETS.
If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution
of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the
issuance of this Warrant, then, in each such case: 
  
 (a) any
Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on
such record date, to a price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid Price of the shares of Common Stock on the trading day immediately preceding such record date minus the
value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator shall be the Closing Bid Price of the shares of Common Stock on the trading day
immediately preceding such record date; and 
  
 (b) the number of
Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled
to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph (a); provided that in the event that the Distribution is of shares of Common Stock (or common equity) (“Other Shares of
Common Equity”) of a company whose shares of common equity are traded on a national securities exchange or a national automated quotation system, then the Holder may elect to receive a warrant to purchase Other Shares of Common Equity in
lieu of an increase in the number of Warrant Shares, the terms of 
  

 - 10 - 

 which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of
shares of Other Shares of Common Equity that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of
the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding paragraph (a) and the number of Warrant Shares calculated in accordance with the first part of
this paragraph (b). 
  
 4. PURCHASE RIGHTS; FUNDAMENTAL
TRANSACTIONS. 
  
 (a) Purchase Rights. In addition to
any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of
shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. 
  
 (b) Fundamental Transactions. The Company shall not enter into or be
party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section (4)(b) pursuant to
written agreements in form and substance satisfactory to the Required Holders and approved by the Required Holders prior to such Fundamental Transaction, including agreements to deliver to each holder of Warrants in exchange for such Warrants a
security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, an adjusted exercise price equal to the value for the shares of Common Stock reflected by
the terms of such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on
the exercise of this Warrant) prior to such Fundamental Transaction, and satisfactory to the Required Holders and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant
referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such
Successor Entity had been named as the Company herein. Upon consummation of the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the
consummation of the Fundamental Transaction, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of the Warrant 
  

 - 11 - 

 prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been converted immediately prior to such Fundamental Transaction,
as adjusted in accordance with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are
entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to
receive upon an exercise of this Warrant at any time after the consummation of the Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable
upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been
entitled to receive upon the happening of such Fundamental Transaction had the Warrant been exercised immediately prior to such Fundamental Transaction. Provision made pursuant to the preceding sentence shall be in a form and substance reasonably
satisfactory to the Required Holders. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be applied without regard to any limitations on the exercise of this
Warrant. 
  
 5. NONCIRCUMVENTION. The Company hereby
covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA
Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of the SPA Warrants, 120% of the number of shares of Common
Stock as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise). 
  
 6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s capacity as
a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such
Person’s capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings, receive 
  

 - 12 - 

 dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such
Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or
otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other
information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders. 
  
 7. REISSUANCE OF WARRANTS. 
  
 (a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if
less then the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

  
 (b) Lost, Stolen or Mutilated Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares
then underlying this Warrant. 
  
 (c) Exchangeable for
Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase
the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no
Warrants for fractional shares of Common Stock shall be given. 
  
 (d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the
face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to
the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face
of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant. 
  

 - 13 - 

 8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a
description of such action and the reason therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail,
and certifying, the calculation of such adjustment and (ii) at least fifteen days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with
respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any
Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. 
  
 9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Required Holders and any
such amendment or action so approved shall be binding upon all existing and future Holders of this Warrant; provided that no such action may increase the exercise price of any SPA Warrants or decrease the number of shares or class of stock
obtainable upon exercise of any SPA Warrants without the written consent of the Holder. No such amendment shall be effective to the extent that it applies to less than all of the holders of the SPA Warrants then outstanding. 
  
 10. GOVERNING LAW. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. 
  
 11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly
drafted by the Company and all the Buyers and shall not be construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.

  
 12. DISPUTE RESOLUTION. In the case of a dispute as to
the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two Business Days of receipt of the Exercise Notice
giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed
determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected
by the Company and approved by the Holder 
  

 - 14 - 

 or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant.
The Company shall use reasonable best efforts to cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten
Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

  
 13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or
other injunctive relief), and nothing herein shall limit the right of the Holder right to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be
entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. 
  
 14. TRANSFER. This Warrant may be offered for sale, sold, transferred
or assigned without the consent of the Company, except as may otherwise be required by Section 2(f) of the Securities Purchase Agreement. 
  
 15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings: 
  
 (a) “Bloomberg” means Bloomberg Financial Markets.

  
 (b) “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
  
 (c) “Common Stock” means (i) the Company’s shares of Common Stock, par value $.01 per share, and (ii) any share capital into which
such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock. 
  
 (d) “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and
last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade
price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or 
  

 - 15 - 

 if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask
prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If
the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during the applicable calculation period. 
  
 (e) “Common Stock Deemed Outstanding” means, at any given time, the number of shares of Common Stock actually outstanding at such time, plus the number of shares of Common Stock deemed to be
outstanding pursuant to Sections 2(a)(i) and 2(a)(ii) hereof regardless of whether the Options or Convertible Securities are actually exercisable at such time, but excluding any Common Stock owned or held by or for the account of the Company or
issuable upon conversion or exercise, as applicable, of the SPA Securities and the Warrants. 
  
 (f) “Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock. 
  
 (g) “Eligible Market” means the Principal Market, The New
York Stock Exchange, Inc., the American Stock Exchange, or The Nasdaq SmallCap Market. 
  
 (h) “Expiration Date” means December 31, 2009. 
  
 (i) “Fundamental Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or
(iii) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of either the outstanding shares of Common Stock or the outstanding shares of Class B Common Stock (not including any shares
of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than the 50% of the outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), or (v) reorganize, recapitalize or
reclassify its Common Stock. 
  

 - 16 - 

 (j) “Options” means any rights, warrants or options to subscribe for or purchase shares
of Common Stock or Convertible Securities. 
  
 (k)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one
such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction. 
  
 (l) “Person” means an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof. 
  
 (m) “Principal Market” means the Nasdaq National Market. 
  
 (n) “Registration Rights Agreement” means that certain registration rights agreement by and among the
Company and the Buyers. 
  
 (o) “Required
Holders” means the holders of the SPA Warrants representing at least a majority of shares of Common Stock underlying the SPA Warrants then outstanding. 
  

(p) “SPA Securities” means the Notes issued pursuant to the Securities Purchase Agreement. 
  
 (q) “Successor Entity” means the Person (or, if so elected
by the Required Holders, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which such Fundamental Transaction shall have been
entered into. 
  
 (r) “Trading Day” means any
day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then
traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final
hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time). 
  
 (s) “Weighted Average Price” means, for any security as of
any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York Time (or such other time as the Principal Market publicly announces is the official open of trading),
and ending at 4:00:00 p.m., New York Time (or such 
  

 - 17 - 

 other time as the Principal Market publicly announces is the official close of trading) as reported by Bloomberg through
its “Volume at Price” functions, or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning
at 9:30:01 a.m., New York Time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York Time (or such other time as such market publicly announces is the official close of trading)
as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such
security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Weighted
Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period. 
  
 [Signature Page Follows] 
  
  

 - 18 - 

 IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above. 
  

			
	MODTECH HOLDINGS, INC.
		
	 By:
	  	 /s/ Dennis Shogren

	Name:	  	Dennis Shogren
	Title:	  	Chief Financial Officer

 EXHIBIT A 
  

EXERCISE NOTICE 
  
 TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS 
 WARRANT TO PURCHASE COMMON STOCK 
  
 MODTECH HOLDINGS, INC. 
  
 The undersigned holder
hereby exercises the right to purchase                      of the shares of Common Stock (“Warrant Shares”) of Modtech
Holdings, Inc., a Delaware corporation (the “Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant. 
  
 1. Form of Exercise Price.
The Holder intends that payment of the Exercise Price shall be made as: 
  
                      a “Cash Exercise” with respect to
                     Warrant Shares; and/or 
  
                      a “Cashless
Exercise” with respect to                      Warrant Shares. 
  
 2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the
Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $                     to the
Company in accordance with the terms of the Warrant. 
  
 3.
Delivery of Warrant Shares. The Company shall deliver to the holder                      Warrant Shares in accordance with the terms of the
Warrant. 
  
 Date:
                         ,          
  

			
	  

	 Name of Registered Holder

		
	By:	 	  

	Name:	 	 
	Title:	 	 

 ACKNOWLEDGMENT 
  
 Delivery Via DWAC 
  
 [Company Letterhead] 
  
 Date: 
  
 Via Fax:[201-296-4491] only 
  
 Mellon Investor Services LLC 

DWAC Dept 
 85 Challenger Road, Overpeck Center 
 Ridgefield Park NJ 07660 
  

			
	 Re: DWAC Issuance 001-751-60783C10
	 	Control No. 2005-        
                    

  
 Ladies and Gentlemen: 
  
 You are hereby authorized to issue and deliver the shares of Common Stock as indicated below
via DWAC. The shares are being issued to cover the exercise of the Warrants under the Securities Purchase Agreement, dated as of December     , 2004. 
  

			
	 Number of Shares:
	 	 __________________________________________________

		
	 	 	 __________ Original Issue or

		
	 	 	 __________ Transfer from Treasury Account

		
	 Broker Name:
	 	 __________________________________________________

		
	 Broker’s DTC Number:
	 	 __________________________________________________

		
	 Contact and Phone:
	 	 __________________________________________________

  
 The broker will
initiate the DWAC transaction on (date). 
  
 Sincerely, 
  
 [Company Contact Name] 
 [Title] 
  
 cc: Broker 

 ACKNOWLEDGMENT 
  
 Form for Physical Certificate 
  

[Company Letterhead] 
  
 Via Fax:[201-296-4279 only 
  
 Mellon Investor Services LLC 
 Stock Option Dept 
 85 Challenger Road, Overpeck Center 
 Ridgefield Park NJ 07660 
  

			
	 Re: Option Issuance 001-751-60783C10
	 	Control No. 2005-        
                    

  
 Ladies and Gentlemen: 
  
 You are hereby authorized to issue and deliver the shares of Common Stock as indicated below
via Physical certificate. The shares are being issued to cover the exercise of the Warrants under the Securities Purchase Agreement, dated as of December     , 2004: 
  

			
	Date of Certificate:	 	__________________________________________________
		
	Number of Shares:	 	__________________________________________________
		
	Optionee Name:	 	             __________________________________________________
		
	Social Security Number:	 	             __________________________________________________
		
	Restricted Shares:	 	 ̈  NO     ̈  YES (see attached legend to be affixed to certificate)
		
	Name on Certificate:	 	__________________________________________________
		
	Mailing Address	 	__________________________________________________
		
	for Certificates:	 	__________________________________________________
		
	 	 	__________________________________________________
		
	Method of Delivery:	 	__________________________________________________

  
 Please call [Company contact &
Phone #] if you have any questions. Thank you for your assistance. 
  
 Very truly
yours, 
  
 [Company Contact Name] 
     [Title]Second Amendment and Waiver to the Credit Agreement

 Exhibit 10. 2 
 EXECUTION VERSION 
  
 SECOND AMENDMENT AND WAIVER dated as of August 8, 2005 (this “Amendment”) to the Credit Agreement dated as of August 20, 2004, as amended by the First Amendment dated May 4, 2005 (as further amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among BLOCKBUSTER INC. (the “Borrower”), the Lenders from time to time parties thereto and JPMORGAN CHASE BANK, N.A., as Administrative
Agent and Collateral Agent for such Lenders (in such capacity, the “Administrative Agent”). 
  
 WHEREAS the Borrower and the Lenders have agreed, on the terms and subject to the conditions set forth herein, to amend the Credit Agreement and waive
compliance with certain provisions of the Credit Agreement for a limited period of time, all as set forth herein. 
  
 NOW, THEREFORE, in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows: 
  
 SECTION 1. Defined Terms. Capitalized terms used and not defined herein have the meanings given to them in the Credit Agreement as amended hereby. 
  
 SECTION 2. Amendment to the Credit Agreement. Effective as of the Second Amendment Effective Date (as defined in
Section 6), the Credit Agreement is hereby amended as follows: 
  
 (a) the definitions in Section 1.01 of the Credit Agreement of the terms set forth below are amended to read in their entirety as follows: 
  
 “‘Applicable Margin’ means, for any day with respect to any ABR Loan or Eurodollar
Loan that is a Revolving Loan, a Tranche A Term Loan or a Tranche B Term Loan, the applicable rate per annum set forth below under the caption “Tranche A and Revolving Eurodollar Spread”, “Tranche A and Revolving ABR
Spread”, “Tranche B Eurodollar Spread” or “Tranche B ABR Spread”, as the case may be, based upon the rating by S&P and Moody’s, respectively, applicable on such date to the Index Debt: 

									
	

Index Debt Ratings	 	 
Tranche A &
 Revolving
 ABR Spread
	 	 Tranche A &
 Revolving
 Eurodollar
 Spread
	 	 

Tranche B ABR
 Spread
	 	 
Tranche B
 Eurodollar
 Spread

	 	 	 	 	 
	 Category 1
  
 B+ or B1 or higher
	 	1.75%	 	2.75%	 	2.00%	 	3.00%
	 	 	 	 	 
	 Category 2
  
 B or B2
	 	2.00%	 	3.00%	 	2.25%	 	3.25%
	 	 	 	 	 
	 Category 3
  
 lower than B or B2
	 	2.25%	 	3.25%	 	2.50%	 	3.50%

  
 Notwithstanding the
foregoing, until the Waiver Period End Date, the Applicable Margin will be deemed to be in Category 2 above on any date on which it would otherwise be in Category 1 above. 
  
 For purposes of the foregoing, (i) if either Moody’s or S&P shall not have in effect a rating
for the Index Debt (other than by reason of the circumstances referred to in the last sentence of this paragraph), then such rating agency shall be deemed to have established a rating in Category 3; (ii) if the ratings established or
deemed to have been established by Moody’s and S&P for the Index Debt shall fall within different Categories, the Applicable Margin shall be based on the lower of the two ratings; and (iii) if the ratings established or deemed to have
been established by Moody’s and S&P for the Index Debt shall be changed, such change shall be effective as of the date on which it is first announced by the applicable rating agency. Each change in the Applicable Margin shall apply during
the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of Moody’s or S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and,
pending the effectiveness of any such amendment, the Applicable Margin shall be determined by reference to the rating most recently in effect prior to such change or cessation. 
  

 2 

 “‘Collateral’ means any “Collateral” as such term is
defined in any Security Document and any assets in respect of which a Lien is created in favor of the Collateral Agent pursuant to any Security Document.”; 
  

“‘Collateral and Guarantee Requirement’ means the requirement that: 
  
 (a) the Administrative Agent shall have received from
each Loan Party (i) either (A) a counterpart of the Collateral Agreement duly executed and delivered on behalf of such Loan Party or (B) in the case of any Person that becomes a Loan Party after the Effective Date, a supplement to the
Collateral Agreement, in the form specified therein, duly executed and delivered on behalf of such Loan Party and (ii) either (A) a counterpart of the Security Agreement duly executed and delivered on behalf of such Loan Party or
(B) in the case of any Person that becomes a Loan Party after the Second Amendment Effective Date, a supplement to the Security Agreement, in the form specified therein, duly executed and delivered on behalf of such Loan Party; 
  
 (b) all outstanding Equity Interests of each Domestic
Subsidiary and of each Significant Foreign Subsidiary (other than Blockbuster Australia Pty. Ltd.) owned by or on behalf of any Loan Party shall have been pledged pursuant to the Collateral Agreement or a Foreign Pledge Agreement (except that the
Loan Parties shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Significant Foreign Subsidiary) and the Collateral Agent shall have received certificates or other instruments, if any, representing all
such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank; 
  
 (c) all outstanding non-voting Equity Interests and 65% of the outstanding voting Equity Interests of Blockbuster Australia Pty. Ltd.
shall be subject to a Memorandum of Deposit-Australian Shares in a form and substance acceptable to the Collateral Agent, and the Collateral Agent shall have received certificates or other instruments, if any, representing all such Equity Interests,
together with stock powers or other instruments of transfer with respect thereto endorsed in blank; 
  
 (d) the Administrative Agent shall have received counterparts of the Aircraft Security Agreement required to be entered into after
the Second Amendment Effective Date pursuant to Section 5.12 with respect to the Aircraft duly executed and delivered by the record owner of the Aircraft; 
  

(e) the Administrative Agent shall have received (i) counterparts of any Mortgage required to be entered into after the Second
Amendment Effective Date pursuant to Section 5.12 with respect to each Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally
recognized title insurance company insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens (other than 

  

 3 

 
Permitted Encumbrances), together with such endorsements (other than survey endorsements) as the Administrative Agent may reasonably request, and
(iii) such legal opinions and other documents as the Administrative Agent may reasonably request with respect to any such Mortgage or Mortgaged Property; and 
  
 (f) all documents and instruments required by law or reasonably requested by the Collateral Agent to be
filed, registered or recorded to create the Liens intended to be created by the Security Documents and perfect such Liens to the extent required by, and with the priority required by, the Security Documents, shall have been filed, registered or
recorded or delivered to the Collateral Agent for filing, registration or recording.”; 
  
 “‘Information Memorandum’ means the Confidential Information Memorandum dated July 2004 relating to the Borrower and
the Transactions together with (a) the written presentation materials and projections dated April 21, 2005, and the related written projections dated April 20, 2005, in each case delivered in connection with a conference call on
April 21, 2005 among the Borrower and the Lenders and (b) the written presentation materials and projections dated August 2, 2005, delivered in connection with a conference call on August 2, 2005 among the Borrower and the
Lenders.”; and 
  
 “‘Security
Documents’ means the Collateral Agreement, the Security Agreement, the Aircraft Security Agreement, each Foreign Pledge Agreement, the Mortgages and each other security agreement or other instrument or document executed and delivered
pursuant to Section 5.12 of this Agreement.”. 
  
 (b) Section 1.01 of the Credit Agreement is amended to add definitions of the following terms in appropriate alphabetical order: 
  
 “‘Aircraft’ means the Canadair Challenger Model CL600-2B16 aircraft, bearing Serial Number 5082 and Federal Aviation
Administration registration number N 6BB.”; 
  
 “‘Aircraft Security Agreement’ means an Aircraft Security Agreement between the Borrower and the Collateral Agent reasonably acceptable to the Collateral Agent and the Borrower.”; 
  
 “‘Index Debt’ means senior, secured,
long term indebtedness for borrowed money of the Borrower that is not Guaranteed by any other Person (other than any Subsidiary) or subject to any other credit enhancement; provided that if the Indebtedness under this Agreement is rated by
S&P or Moody’s separately from other Indebtedness that would fall within the foregoing definition, the Index Debt for purposes of ratings established by such rating agency shall be the Indebtedness of the Borrower under this
Agreement.”; 
  
 “‘Mortgage’ means any mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any real property and improvements thereto to secure the Obligations that
is delivered 

  

 4 

 
after the Second Amendment Effective Date pursuant to Section 5.12. Each Mortgage shall be substantially in the form of Exhibit A to the
Second Amendment with such changes as may be appropriate to accommodate local legal requirements.”; 
  
 “‘Mortgaged Property’ means each parcel of real property and improvements thereto located in the United States
and owned by a Loan Party with respect to which a Mortgage is granted pursuant to Section 5.12.”; 
  
 “‘Second Amendment’ means the Second Amendment and Waiver dated as of August 8, 2005 to this Agreement.”;

  
 “‘Second Amendment Effective
Date’ means the date on which the conditions to effectiveness of the Second Amendment were satisfied in accordance with the terms thereof.”; 
  
 “‘Security Agreement’ means the Security Agreement among the Borrower, the Subsidiary Loan Parties and the
Collateral Agent, substantially in the form of Exhibit B to the Second Amendment.”; and 
  
 “‘Waiver Period End Date’ means the date on which the Borrower delivers to the Administrative Agent the
Borrower’s audited consolidated financial statements as of and for the fiscal year ending on December 31, 2005 pursuant to, and in conformity with the requirements of, Section 5.01(a) of this Agreement.”. 
  
 (c) clause (d) of the definition of “Permitted
Encumbrances” in Section 1.01 of the Credit Agreement is amended by inserting the following text immediately after the words “Article VII” and immediately before the text “; and”: 
  
 “provided that no such judgment lien shall have equal or greater
priority than the Liens created under the Loan Documents”. 
  
 (d) clause (ii) of the definition of “Prepayment Event” in Section 1.01 of the Credit Agreement is amended by replacing the amount “$100,000,000” with “$50,000,000”. 

 
 (e) paragraph (c) of Section 2.12 of the Credit
Agreement is amended by replacing the percentage “50%” with “75%” in each instance such percentage appears within such paragraph. 
  
 (f) paragraph (a) of Section 3.18 of the Credit Agreement is amended to read in its entirety as follows: 
  
 “SECTION 3.18. Security Interests. (a) When
executed and delivered, the Security Documents will be effective to create in favor of the Collateral Agent for the ratable benefit of the Secured Parties (as defined in the Collateral 

  

 5 

 
Agreement) a valid and enforceable security interest in the Collateral and (i) when the Collateral constituting certificated securities (as defined in
the Uniform Commercial Code) is delivered to the Collateral Agent thereunder together with instruments of transfer duly endorsed in blank, the security interest of the Collateral Agent therein will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the pledgors in such Collateral, prior and superior in right to any other Person (it being understood that no representation is made under this clause (i) as to (A) any such Collateral that is
subject to a Foreign Pledge Agreement or (B) the perfection or priority of any Lien to the extent that such perfection or priority is determined under the law of a jurisdiction outside the United States, which are covered by paragraph
(b) below), and (ii) (A) when financing statements in appropriate form are filed in the offices specified in the Perfection Certificate delivered on the Effective Date, the security interest of the Collateral Agent will constitute a
fully perfected Lien on and security interest in all right, title and interest of the Grantors (as defined in the Collateral Agreement) in the remaining Collateral (other than (x) the Mortgaged Properties, (y) the Collateral (as defined in
the Security Agreement) created under the Security Agreement and (z) the Collateral (as defined in the Aircraft Security Agreement) created under the Aircraft Security Agreement) to the extent perfection can be obtained by filing Uniform
Commercial Code financing statements, prior and superior to the rights of any other Person and (B) when financing statements in appropriate form are filed in the offices specified in the Perfection Certificate delivered on the Second Amendment
Effective Date, the security interest of the Collateral Agent will constitute a fully perfected Lien on and security interest in all right, title and interest of the Grantors (as defined in the Security Agreement) in the Collateral (as defined in
the Security Agreement) created under the Security Agreement to the extent perfection can be obtained by filing Uniform Commercial Code financing statements, prior and superior to the rights of any other Person subject only to the Liens permitted by
Section 6.02.”. 
  
 (g)
Section 3.18 of the Credit Agreement is amended by inserting the following provisions at the end of such Section: 
  
 “(c) When the Security Agreement or an adequate summary thereof is properly filed in the United States Patent and Trademark Office
and the United States Copyright Office, and, with respect to Collateral in which a security interest cannot be perfected by such filings, upon the proper filing of the financing statements referred to in paragraph (a) above, the Security
Agreement and such financing statements shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in the Intellectual Property (as defined in the Security Agreement), in each case
prior and superior in right to any other Person subject only to Permitted Encumbrances (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to
perfect a lien on registered trademarks and patents, trademark and patent applications and registered copyrights acquired by the grantors after the date hereof). 
  

 6 

 (d) The Aircraft Security Agreement entered into after the Second Amendment Effective
Date pursuant to Section 5.12, when executed and properly filed with the Federal Aviation Administration, shall be effective to constitute, in favor of the Collateral Agent, for the ratable benefit of the Secured Parties (as defined in the
Aircraft Security Agreement), a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in the Aircraft and the proceeds thereof, prior and superior in right to any other Person subject only to
Permitted Encumbrances. 
  
 (e) The Mortgages, if
any, entered into after the Second Amendment Effective Date pursuant to Section 5.12 shall be effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on all of
the applicable Loan Parties’ right, title and interest in and to the Mortgaged Property thereunder and the proceeds thereof, and when such Mortgages are filed in the proper real estate filing offices, such Mortgages shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of the applicable Loan Parties in such Mortgaged Property and the proceeds thereof, in each case prior and superior in right to any other Person subject only to Permitted
Encumbrances.”. 
  
 (h) clause (i) of
paragraph (b) of Section 5.03 of the Credit Agreement is amended by inserting the words “Second Amendment” immediately after the word “the” and immediately before the words “Effective Date”. 
  
 (i) Section 5.12 of the Credit Agreement is amended to
read in its entirety as follows: 
  
 “(a) The Borrower will, and will cause each Subsidiary Loan Party to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording
of financing statements, fixture filings, Mortgages and other documents), that may be required under any applicable law, or that the Administrative Agent may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain
satisfied, all at the expense of the Loan Parties; provided that the Collateral and Guarantee Requirement need not be satisfied with respect to (i) real properties owned by the Borrower or any Subsidiary Loan Party with an individual
fair market value (including fixtures and improvements) that is $500,000 or less, (ii) any real property held by the Borrower or any Subsidiary Loan Party as a lessee under a lease, (iii) the Airplane, until 45 days after the Second
Amendment Effective Date and (iv) any real property owned by the Borrower or any Subsidiary Loan Party on the Second Amendment Effective Date, until 75 days after the Second Amendment Effective Date. The Borrower also agrees to provide to the
Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created under the Security Documents. 
  

 7 

 (b) If any asset (including any real property or improvements thereto or any
interest therein) that has an individual fair market value of more than $500,000 is owned or acquired by the Borrower or any Subsidiary Loan Party after the Second Amendment Effective Date or owned by an entity at the time it becomes a Subsidiary
Loan Party (in each case other than assets constituting Collateral under any Security Document that become subject to the Lien of such Security Document upon acquisition thereof), the Borrower will, to the extent not already done so, notify the
Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, the Borrower will cause such asset to be subjected to a Lien securing the Obligations and will take, and cause the Subsidiary Loan
Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Loan Parties;
provided that the Collateral and Guarantee Requirement need not be satisfied with respect to (i) any real property held by the Borrower or any Subsidiary as a lessee under a lease and (ii) any other assets with respect to which the
Administrative Agent determines that the cost or impracticability of including such assets as Collateral would be excessive in relation to the benefits to the Lenders, (iii) the Airplane, until 45 days after the Second Amendment Effective Date
and (iv) any real property owned by the Borrower or any Subsidiary Loan Party on the Second Amendment Effective Date, until 75 days after the Second Amendment Effective Date.” 
  
 (j) clause (vii) of paragraph (a) of
Section 6.01 is amended by replacing the amount “$100,000,000” with “$50,000,000”. 
  
 (k) clause (xiii) of paragraph (a) of Section 6.01 is amended by replacing the amount “$40,000,000” with
“$15,000,000”. 
  
 (l) the proviso in
paragraph (c) of Section 6.04 is amended by replacing the reference to “$90,000,000 at any time outstanding” with “$30,000,000 outstanding at any time prior to the Waiver Period End Date and $60,000,000 outstanding at any
time after the Waiver Period End Date”. 
  
 (m) clause (j) of Section 6.04 is amended by replacing the reference to “$50,000,000” with “$10,000,000 at any time prior to the Waiver Period End Date and $25,000,000 at any time after the Waiver Period End
Date”. 
  
 (n) clause (v) of paragraph
(a) of Section 6.08 of the Credit Agreement is amended by (i) replacing the amount “$300,000,000” in subclause (x) thereunder with “$100,000,000” and (ii) deleting the words “minus the
cumulative aggregate amount of Repurchase Expenditures made in respect of Subordinated Debt or Permitted Subordinated Indebtedness pursuant to clause (v) of Section 6.08(b)” from subclause (y) thereunder. 
  

 8 

 (o) paragraph (b) of Section 6.08 of the Credit Agreement is amended by
(i) inserting the word “and” at the end of clause (iv) thereunder, (ii) deleting clause (v) thereunder and (iii) redesignating clause (vi) thereunder as clause (v). 
  
 SECTION 3. Waiver of Certain Provisions; Interim Covenants.
(a) Effective as of the Second Amendment Effective Date (as defined in Section 6) and subject to the provisions of paragraph (b) of this Section 3, the Lenders waive compliance by the Borrower with: 
  
 (i) Section 6.12 of the Credit Agreement for the period
of four consecutive fiscal quarters ending on September 30, 2005; and 
  
 (ii) Section 6.13 of the Credit Agreement for the period from and including June 30, 2005 through and including December 30, 2005. 
  
 (b) The waivers set forth in paragraph (a) of this Section 3 will automatically expire and be of no force or
effect, with the same effect as if such waivers had never been granted, and without the necessity of any action by the Administrative Agent or any Lender, if at any time prior to the Waiver Period End Date (i) the Borrower fails to comply or
fails to cause each of the Subsidiaries to comply with any agreement or condition set forth in paragraph (c) of this Section or (ii) any Default or Event of Default otherwise occurs under the Credit Agreement. 
  
 (c) During the period from and including the Second Amendment Effective Date
through the Waiver Period End Date: 
  
 (i) The
Borrower will not request any Swingline Loan or any Revolving Borrowing unless, and it shall be a condition to the Lenders’ obligations under the Credit Agreement to make any Swingline Loans or Revolving Loans that, (x) the Available Cash
(as defined below) on the date of such Borrowing, after giving effect to the receipt of the proceeds of such Borrowing and to any other funds anticipated to be received and any cash expenditures anticipated to be made, in each case on or after the
date of the relevant borrowing request and prior to the close of business on the date of such Borrowing, will not exceed $50,000,000 and (y) the Administrative Agent shall have received at the time of the relevant borrowing request a
certificate of a Financial Officer of the Borrower, in detail reasonably satisfactory to the Administrative Agent, confirming compliance with the condition set forth in clause (x) of this sentence. For purposes of paragraph (c) of this
Section, the term “Available Cash” means, on any date, (i) the fair market value on such date of cash equivalents held in securities accounts of the Borrower and its domestic Subsidiaries and (ii) the amount of available
funds held on such date in bank deposit accounts of the Borrower and its domestic Subsidiaries, including the Borrower’s concentration accounts maintained with Bank of America, N.A., and any other bank account of the Borrower or its domestic
Subsidiaries to which cash is transferred, directly or indirectly, by local depositary banks into which Stores deposit cash, credit card receipts and similar items; provided, however, that funds in bank deposit accounts of domestic

  

 9 

 
Subsidiaries will be included in calculating Available Cash on any date to the extent, but only to the extent, the aggregate amount of such funds exceeds
$5,000,000. The Borrower will not cause or permit such local depositary banks to transfer funds into accounts other than the Borrower’s existing concentration accounts (or such other account maintained with a Lender as may be approved by the
Administrative Agent) or to make available or transfer funds on less favorable terms or schedules than those currently in effect. 
  
 (ii) If, on any date, the Borrower’s Available Cash (other than any amounts that will be applied to the repayment of Term Loans
within the next 10 Business Days pursuant to Section 2.12(c)) exceeds $75,000,000, the Borrower will provide notice to the Administrative Agent on such date and within one Business Day of such date repay Revolving Loans and Swingline Loans in
an amount equal to such excess (or if less, in the amount of all outstanding Revolving Loans and Swingline Loans). 
  
 (iii) The Borrower will, and will cause each of its Subsidiaries to, continue to administer and conduct their existing cash management
system in the ordinary course and consistently with past practice, including without limitation in connection with the making, processing and crediting of credit card and other deposits and the collection and transmission of funds in connection
therewith; provided that the foregoing will not preclude the Borrower from implementing improvements in such cash management systems to achieve faster collection and transmission of funds so long as such improvements are described in
reasonable detail in a notice furnished by the Borrower to the Administrative Agent reasonably in advance of any such implementation. Without limiting the foregoing, the Borrower will, and will cause each of its domestic Subsidiaries to, continue to
deposit cash and credit card receipts into local depositary banks substantially in accordance with their existing practice and schedules, to obtain availability of funds from such depositary banks substantially in accordance with existing schedules
and on existing terms and cause available funds to be transferred by such depositary banks to the Borrower’s concentration accounts (but not other accounts) on such daily or other basis as currently in effect, or, in each case, on such faster
schedules as the Borrower may achieve pursuant to implementing improvements referred to in the immediately preceding sentence. 
  
 (iv) The Borrower will not permit the amount of Consolidated EBITDA for any period set forth below to be less than the amount set forth
opposite such period: 
  

				
	 Period

	  	Minimum Amount

	 For the fiscal quarter ending on September 30, 2005
	  	$	45,000,000
	 For the two fiscal quarters ending on December 31, 2005
	  	$	250,000,000

  

 10 

 (v) (x) Not later than the Wednesday of each calendar week, the Borrower will deliver to
the Administrative Agent a cash flow forecast for the Borrower for the ensuing 13-week period, broken down by week and by domestic operations and otherwise in form and detail reasonably acceptable to the Administrative Agent. 
  
 (y) Not later than November 15, 2005, the Borrower will
deliver to the Administrative Agent a comprehensive business plan for the Borrower and the Subsidiaries, separately covering the month of December 2005, each fiscal quarter thereafter through the quarter ending December 31, 2007, and each
fiscal year thereafter through the fiscal year ending December 31, 2011, which business plan will be in form and detail reasonably satisfactory to the Administrative Agent after consultation with the Borrower. 
  
 (z) Not later than the 20th Business Day after the last day
of any period referred to in subparagraph (c)(iv) above, the Borrower will deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower setting forth a calculation, in detail reasonably acceptable to the Administrative
Agent, of Consolidated EBITDA for such period, which certification may be subject to any end-of-period or audit adjustments not then completed. 
  
 (vi) Not later than the 20th Business Day after the last day of each calendar month from and including July 2005 through November 2005,
the Borrower will deliver to the Administrative Agent unaudited financial statements for such month and for the elapsed portion of the fiscal quarter including such month, in substantially the same format and detail as the quarterly financial
statements delivered pursuant to Section 5.01(b) of the Credit Agreement, and setting forth the amount of the cash Capital Expenditures of the Borrower and its Subsidiaries for such calendar month. 
  
 (vii) The Borrower will not permit cash Capital Expenditures
of the Borrower and the Subsidiaries during any period set forth below to exceed the amount set forth below opposite such period: 
  

				
	 Period

	  	Maximum Amount

	 For the fiscal quarter ending on September 30, 2005
	  	$	40,000,000
	 For the two fiscal quarters ending on December 31, 2005
	  	$	75,000,000

  
 (viii)
The Borrower will not, and will not permit any Subsidiary to, effect any Permitted Acquisition or any other acquisition of (or of any Equity Interests in) any other Person (other than existing Subsidiaries) or any assets constituting a going
concern, operating business or division or unit thereof. 
  

 11 

 (ix) The Borrower will not declare or make any Restricted Payments pursuant to
Section 6.08(a)(v) or (vi) of the Credit Agreement except for the declaration and payment, otherwise in compliance with clause (a)(v) of Section 6.08 of the Credit Agreement, of cash dividends on the Borrower’s common stock
(A) during the fiscal quarter ending on September 30, 2005 not in excess of two cents per share (but in no event in excess of $4,100,000 in the aggregate); provided that any such dividend is declared and paid during such fiscal
quarter and (B) during the fiscal quarter ending on December 31, 2005 not in excess of two cents per share (but in no event in excess of $4,100,000 in the aggregate); provided that any such dividend may not be declared prior to the
delivery to the Administrative Agent of the certificate of a Financial Officer contemplated by Section 3(c)(v)(z) of this Amendment and the certificate of a Financial Officer contemplated by Section 5.01(c) of the Credit Agreement, in each
case with respect to the fiscal quarter ending on September 30, 2005; and provided further, that any such dividend is declared and paid during such fiscal quarter. 
  
 (d) Each of the agreements, covenants and conditions set forth in paragraph (c) above or Section 4 hereof will be
deemed to be an agreement, covenant or condition of or applicable to the Borrower under the Credit Agreement, and any failure by the Borrower to observe or perform any such agreement, covenant or condition will give rise to an Event of Default under
paragraph (d) of Article VII of the Credit Agreement; provided, however, that any failure to comply with paragraph (c)(v)(z) above will not result in an Event of Default until it has continued unremedied for a period of two
Business Days. 
  
 SECTION 4. Other Covenants. As promptly
as practicable, but in any event within 75 days after the Second Amendment Effective Date, in the case of clause (i) below, and 45 days after the Second Amendment Effective Date, in the case of the clause (ii) below, the Borrower
will, and will cause the Subsidiaries to, (i) cause a first priority Mortgage (subject only to Permitted Encumbrances) to be granted and perfected on each Mortgaged Property owned by the Borrower or any Subsidiary Loan Party with an individual
fair market value (including fixtures and improvements) that is more than $500,000 and (ii) cause a first priority Lien to be granted and perfected on the Aircraft pursuant to the Aircraft Security Agreement, in each case in favor of the
Collateral Agent as security for the Obligations. 
  
 SECTION 5.
Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that as of the date hereof and after giving effect hereto: 
  
 (a) this Amendment has been duly authorized, executed and delivered by it, and each of this Amendment and
the Credit Agreement as amended hereby constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms; 
  
 (b) no Default or Event of Default has occurred and is continuing; and 
  

 12 

 (c) all representations and warranties of the Borrower contained in the Credit Agreement
are true and correct in all material respects as of the date hereof (except with respect to representations and warranties expressly made only as of an earlier date, which representations were true and correct in all material respects as of such
earlier date). 
  
 SECTION 6. Effectiveness. This Amendment
shall become effective as of the first date on or before August 8, 2005 (the “Second Amendment Effective Date”) on which: 
  
 (a) the Administrative Agent shall have received counterparts hereof duly executed and delivered by the Borrower and the Required Lenders;

  
 (b) the Administrative Agent shall have
received such favorable written opinions (addressed to the Administrative Agent and the Lenders and dated the Second Amendment Effective Date) of Vinson & Elkins L.L.P., counsel for the Borrower, and of Edward B. Stead, General Counsel of
the Borrower, as it shall reasonably request relating to this Amendment, the Security Agreement, the Loan Parties and the transactions contemplated hereby, all in form and substance reasonably satisfactory to the Administrative Agent. The Borrower
hereby requests such counsel to deliver such opinions. 
  
 (c) the Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the
authorization of this Amendment, the Security Agreement and the transactions contemplated hereby and any other legal matters relating to the Loan Parties, the Loan Documents or the transactions contemplated hereby, all in form and substance
reasonably satisfactory to the Administrative Agent; 
  
 (d) (i) the Collateral and Guarantee Requirement (as such term is amended hereby) shall have been satisfied (other than the delivery of items set forth in clauses (d) or (e) of the definition of the Collateral and Guarantee
Requirement), (ii) the Administrative Agent shall have received a completed Perfection Certificate dated the Second Amendment Effective Date and signed by an executive officer or Financial Officer of the Borrower, together with all attachments
contemplated thereby, and (iii) the Collateral Agent, for the ratable benefit of the Lenders, shall have a fully perfected first priority Lien on, and security interest in, the Collateral (other than the Mortgaged Property and the Aircraft)
subject only to Permitted Encumbrances; 
  
 (e)
the Administrative Agent shall have received payment of all reasonable fees and out-of-pocket expenses, to the extent invoiced, to be paid or reimbursed to it by the Borrower pursuant to the Credit Agreement, including those referred to in
Section 9 hereof; and 
  

 13 

 (f) the Borrower shall have paid to the Administrative Agent in immediately available
funds, for the account of each of the Lenders entitled thereto, the Amendment Fee referred to in Section 7 hereof. 
  
 SECTION 7. Amendment Fee. The Borrower agrees to pay to the Administrative Agent, for the account of each Lender that delivers (including by fax)
an executed counterpart of this Amendment prior to 12:00 noon, New York City time, on August 8, 2005, an amendment fee (the “Amendment Fee”) in an amount equal to 0.125% of the sum of such Lender’s outstanding Term
Loans and Revolving Commitments. 
  
 SECTION 8. No Other
Amendments; Confirmation. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders or the Administrative Agent
under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any Loan Party to a consent to, or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances. This Amendment shall apply and be effective only with respect to the provisions of the Credit
Agreement specifically referred to herein. The definition of the term “Applicable Margin” in Section 1.01 of the Credit Agreement (as amended hereby) shall apply and be effective for the period beginning on and including the Second
Amendment Effective Date, and the definition of the term “Applicable Margin” in Section 1.01 of the Credit Agreement (exclusive of any amendment hereby) shall apply and be effective for the period ending on (but not including) the
Second Amendment Effective Date. On and after the Second Amendment Effective Date, any reference to the Credit Agreement contained in the Loan Documents shall mean the Credit Agreement as modified hereby. 
  
 SECTION 9. Expenses. The Borrower agrees to reimburse the
Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent. 
  
 SECTION 10. Governing Law; Counterparts. (a) This Amendment and
the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York. 
  

(b) This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of such counterparts
taken together shall be deemed to constitute one and the same instrument. This Amendment may be delivered by facsimile transmission of the relevant signature pages hereof. 
  

 14 

 SECTION 11. Headings. The headings of this Amendment are for purposes of reference only and shall
not limit or otherwise affect the meaning hereof. 
  

 15 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by
their duly authorized officers as of the day and year first above written. 
  

			
	BLOCKBUSTER INC.,
		
	by	 	/s/    Mary Bell
	 	 	Name: Mary Bell
	 	 	 Title: Senior Vice President, Investor
 Relations and
Corporate Treasurer

	
	  
 JPMORGAN CHASE BANK, N.A.
 individually and as Administrative Agent,
 Collateral Agent,
Swingline Lender,
 Issuing Bank,

		
	by	 	/s/    Barry Bergman
	 	 	Name: Barry Bergman
	 	 	Title: Managing Director

  

 16 

 SIGNATURE PAGE FOR 
 SECOND AMENDMENT 
 TO BLOCKBUSTER INC. 
 CREDIT AGREEMENT 
  

			
	 To approve this Amendment:

		
	 Institution:
	 	 *

		
	 By  
	 	 
	 	 	 Name:

	 	 	 Title:

	 	 	 

	*	 	The Amendment was approved by the Required Lenders for the Credit Agreement. 

  

 17 

 EXHIBIT A 
  
 Form of Mortgage 
  
 EXECUTION VERSION 
  

 
  
  
 [FORM OF] 
  
 MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT 
 AND FINANCING STATEMENT

  
 From 
  
 [NAME OF MORTGAGOR] 
  
  
 To 
  
 JPMORGAN CHASE BANK, N.A. 
  

  
 Dated:                     , 2005 
 Premises: [City], [State] 
                      County 
  

  
  

 EXECUTION VERSION 
  

THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT1 dated as of                     , 2005 (this
“Mortgage”), by [Blockbuster Inc./Blockbuster Distribution, Inc.], a Delaware corporation, having an office at 1201 Elm Street, Dallas, Texas 75270 (the “Mortgagor”), to JPMORGAN CHASE BANK, N.A., a national
banking association, having an office at 270 Park Avenue, New York, New York 10017 (the “Mortgagee”) as Collateral Agent for the Secured Parties (as such terms are defined below). 
  
  
 WITNESSETH THAT: 
  
 Reference is made to (i) the
Credit Agreement dated as of August 20, 2004 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Blockbuster Inc., a Delaware Corporation (the “Borrower”), the
lenders from time to time party thereto (the “Lenders”), including, inter alia, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”) for the Lenders, collateral agent (the
“Collateral Agent”) for the Secured Parties (as defined below), swingline lender (the “Swingline Lender”) and issuing bank (the “Issuing Bank”) with respect to any letters of credit (the
“Letters of Credit”) issued pursuant to the terms of the Credit Agreement and (ii) the Security Agreement dated as of even date hereof (as amended, supplemented or otherwise modified from time to time, the “Security
Agreement”) among the Borrower, the subsidiaries of the Borrower identified therein and Collateral Agent. Capitalized terms used but not defined herein have the meanings given to them in the Credit Agreement. 
  
 In the Credit Agreement, (i) the Lenders have agreed to make
(a) term loans (the “Term Loans”) and revolving loans (the “Revolving Loans”) to the Borrower, (ii) the Swingline Lender has agreed to make swingline loans (the “Swingline Loans”, together
with Term Loans and Revolving Loans, the “Loans”) to the Borrower and (iii) the Issuing Bank has issued or agreed to issue from time to time Letters of Credit for the account of the Borrower, in each case pursuant to, upon the terms,
and subject to the conditions specified in, the Credit Agreement. [The Credit Agreement provides that the sum of the principal amount of the Loans and the Letters of Credit from time to time outstanding and secured hereby shall not exceed
$[            ]]. 
  
 The Borrower desires to enter into that certain Second Amendment and Waiver dated as of August 8, 2005 (“Second Amendment”) with the Lenders, the Administrative Agent, the Collateral Agent, the
Swingline Lender and the Issuing Bank, pursuant to which, among other things, the Lenders will amend certain provisions and waive certain covenants of the Credit Agreement and the Lenders have required as a condition subsequent to the effectiveness
of the Second Amendment, that Mortgagor enter into this Mortgage in the form hereof to secure the Obligations. 
  
  

  

	 	1	 	Based on 3/30/99 form of Credit Agreement for non-investment grade borrowers. 

 [Mortgagor is the Borrower / Mortgagor is a wholly owned Subsidiary of the Borrower] and Mortgagor
has determined that valuable benefits have been and will be derived by it as a result of the Second Amendment and that the benefits accruing to it from the Second Amendment exceed Mortgagor’s anticipated liability under this Mortgage.

  
 As used in this Mortgage, the term “Secured
Parties” shall mean (a) the Lenders, (b) the Administrative Agent, (c) the Collateral Agent, (d) the Issuing Bank, (e) each counterparty to a Hedging Agreement entered into with Borrower if such counterparty was a
Lender at the time the Hedging Agreement was entered into, (f) the beneficiaries of each indemnification obligation undertaken by the Borrower or Subsidiary Loan Party under any Loan Document and (g) the successors and assigns of each of
the foregoing. 
  
 Pursuant to the requirements of the Credit
Agreement, the Mortgagor is granting this Mortgage to create a lien on and a security interest in the Mortgaged Property (as hereinafter defined) to secure the performance and payment by the Mortgagor of the Obligations. [The Credit Agreement also
requires the granting by other Loan Parties of mortgages, deeds of trust and/or deeds to secure debt (the “Other Mortgages”) that create liens on and security interests in certain real and personal property other than the Mortgaged
Property to secure the performance of the Obligations.] 
  
 Granting Clauses 
  
 NOW, THEREFORE, IN
CONSIDERATION OF the foregoing and in order to secure the due and punctual payment and performance of the Obligations for the benefit of the Secured Parties, Mortgagor hereby grants, mortgages, assigns and pledges to the Mortgagee, a mortgage lien
on and a security interest in, all of Mortgagor’s right, title and interest in and to the following described property (the “Mortgaged Property”) whether now owned or hereafter acquired by Mortgagor: 
  
 (1) the land more particularly described on
Exhibit A hereto (the “Land”), together with all rights appurtenant thereto, including the easements over certain other adjoining land granted by any easement agreements, covenant or restrictive agreements and all air rights,
mineral rights, water rights, oil and gas rights and development rights, if any, relating thereto, and also together with all of the other easements, rights, privileges, interests, hereditaments and appurtenances thereunto belonging or in any way
appertaining and all of the estate, right, title, interest, claim or demand whatsoever of Mortgagor therein and in the streets and ways adjacent thereto, either in law or in equity, in possession or expectancy, now or hereafter acquired (the
“Premises”); 
  
 (2) all
buildings, improvements, structures, paving, parking areas, walkways and landscaping now or hereafter erected or located upon the Land, and all fixtures of every kind and type affixed to the Premises or attached to or forming part of any structures,
buildings or improvements and replacements thereof now or hereafter erected or located upon the Land (the “Improvements”); 
  

 3 

 (3) all apparatus, movable appliances, building materials, equipment, fittings,
furnishings, furniture, machinery and other articles of tangible personal property of every kind and nature, and replacements thereof, now or at any time hereafter placed upon or used in any way in connection with the use, enjoyment, occupancy or
operation of the Improvements or the Premises, including all of Mortgagor’s books and records relating thereto and including all pumps, tanks, goods, machinery, tools, equipment, lifts (including fire sprinklers and alarm systems, fire
prevention or control systems, cleaning rigs, air conditioning, heating, boilers, refrigerating, electronic monitoring, water, loading, unloading, lighting, power, sanitation, waste removal, entertainment, communications, computers, recreational,
window or structural, maintenance, truck or car repair and all other equipment of every kind), restaurant, bar and all other indoor or outdoor furniture (including tables, chairs, booths, serving stands, planters, desks, sofas, racks, shelves,
lockers and cabinets), bar equipment, glasses, cutlery, uniforms, linens, memorabilia and other decorative items, furnishings, appliances, supplies, inventory, rugs, carpets and other floor coverings, draperies, drapery rods and brackets, awnings,
venetian blinds, partitions, chandeliers and other lighting fixtures, freezers, refrigerators, walk-in coolers, signs (indoor and outdoor), computer systems, cash registers and inventory control systems, and all other apparatus, equipment,
furniture, furnishings, and articles used in connection with the use or operation of the Improvements or the Premises, it being understood that the enumeration of any specific articles of property shall in no way result in or be held to exclude any
items of property not specifically mentioned, it being further understood that the property referred to in this subparagraph (3) only includes the property now owned or hereafter acquired by Mortgagor and not property of others located on or in
the Premises (the property referred to in this subparagraph (3), the “Personal Property”); 
  
 (4) all general intangibles owned by Mortgagor and relating to design, development, operation, management and use of the Premises or
the Improvements, all certificates of occupancy, zoning variances, building, use or other permits, approvals, authorizations and consents obtained from and all materials prepared for filing or filed with any governmental agency in connection with
the development, use, operation or management of the Premises and Improvements, all construction, service, engineering, consulting, leasing, architectural and other similar contracts concerning the design, construction, management, operation,
occupancy and/or use of the Premises and Improvements, all architectural drawings, plans, specifications, soil tests, feasibility studies, appraisals, environmental studies, engineering reports and similar materials relating to any portion of or all
of the Premises and Improvements, and all payment and performance bonds or warranties or guarantees relating to the Premises or the Improvements, all to the extent assignable (the “Permits, Plans and Warranties”); 
  
 (5) all now or hereafter existing leases or licenses
(under which Mortgagor is landlord or licensor) and subleases (under which Mortgagor is sublandlord), concession, management, mineral or other agreements of a similar kind that permit the use or occupancy of the Premises or the Improvements for any
purpose in return for any payment, or the extraction or taking of any gas, oil, water or other minerals 

  

 4 

 
from the Premises in return for payment of any fee, rent or royalty (collectively, “Leases”), and all agreements or contracts for the sale
or other disposition of all or any part of the Premises or the Improvements, now or hereafter entered into by Mortgagor, together with all charges, fees, income, issues, profits, receipts, rents, revenues or royalties payable thereunder
(“Rents”); 
  
 (6) all real
estate tax refunds and all proceeds of the conversion, voluntary or involuntary, of any of the Mortgaged Property into cash or liquidated claims (“Proceeds”), including Proceeds of insurance maintained by the Mortgagor and
condemnation awards, any awards that may become due by reason of the taking by eminent domain or any transfer in lieu thereof of the whole or any part of the Premises or Improvements or any rights appurtenant thereto, and any awards for change of
grade of streets, together with any and all moneys now or hereafter on deposit for the payment of real estate taxes, assessments or common area charges levied against the Mortgaged Property, unearned premiums on policies of fire and other insurance
maintained by the Mortgagor covering any interest in the Mortgaged Property or required by the Credit Agreement; and 
  
 (7) all extensions, improvements, betterments, renewals, substitutes and replacements of and all additions and appurtenances to, the
Land, the Premises, the Improvements, the Personal Property, the Permits, Plans and Warranties and the Leases, hereinafter acquired by or released to the Mortgagor or constructed, assembled or placed by the Mortgagor on the Land, the Premises or the
Improvements, and all conversions of the security constituted thereby, immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further mortgage, deed of
trust, conveyance, assignment or other act by the Mortgagor, all of which shall become subject to the lien of this Mortgage as fully and completely, and with the same effect, as though now owned by the Mortgagor and specifically described herein.

  
 TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee,
its successors and assigns, for the ratable benefit of the Secured Parties, forever, subject only to Permitted Encumbrances (as defined in the Credit Agreement) and to satisfaction and release as provided in Section 3.04. 
  
 ARTICLE I 
  
 Representations, Warranties and Covenants of Mortgagor 
  
 Mortgagor agrees, covenants, represents and/or warrants as follows: 
  
 SECTION 1.01. Title, Mortgage Lien. (a) Mortgagor has good
and marketable fee simple title to the Mortgaged Property, subject only to Permitted Encumbrances. 
  
 (b) The execution and delivery of this Mortgage is within Mortgagor’s corporate powers and has been duly authorized by all necessary corporate and,
if required, stockholder 

  

 5 

 
action. This Mortgage has been duly executed and delivered by Mortgagor and constitutes a legal, valid and binding obligation of Mortgagor, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law. 
  
 (c) The execution, delivery
and recordation of this Mortgage (i) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and
except filings necessary to perfect the lien of this Mortgage, (ii) will not violate any applicable law or regulation or any order of any Governmental Authority (except where such violation has not resulted, and would not reasonably be expected
to result in, a Material Adverse Effect) or the charter, by-laws or other organizational documents of Mortgagor, (iii) will not violate or result in a default under any indenture or any other material agreement or other instrument binding upon
Mortgagor or its assets, or give rise to a right thereunder to require any payment to be made by Mortgagor, and (iv) will not result in the creation or imposition of any Lien on any asset of Mortgagor, except the lien of this Mortgage or
otherwise permitted under Section 6.02 of the Credit Agreement. 
  
 (d) This Mortgage, when duly recorded in the public records identified in Exhibit A hereto and                  [Local Counsel Review], and
the Uniform Commercial Code Financing Statements described in Section 1.09 of this Mortgage, when duly recorded in the public records identified in the Perfection Certificate delivered in connection with the Second Amendment, will create a
valid, perfected and enforceable lien upon and security interest in all of the Mortgaged Property. 
  
 SECTION 1.02. Credit Agreement. This Mortgage is given pursuant to the Credit Agreement. Mortgagor expressly covenants and agrees to pay
when due, and to timely perform, and to cause the other Loan Parties to pay when due, and to timely perform, the Obligations in accordance with the terms of the Loan Documents. 
  
 SECTION 1.03. Payment of Taxes, and Other Obligations. (a) Except where (1) the validity or amount
thereof is being contested in good faith by appropriate proceedings, and the Borrower or the Mortgagor has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (2) the failure to make payment would not
reasonably be expected to result in a Material Adverse Effect, Mortgagor will pay and discharge from time to time prior to the time when the same shall become delinquent, and before any interest or penalty accrues thereon or attaches thereto, all
Taxes and other material obligations with respect to the Mortgaged Property or any part thereof or upon the Rents from the Mortgaged Property or arising in respect of the occupancy, use or possession thereof in accordance with, and to the extent
required by, the Credit Agreement. 
  
 (b) In the event of the
passage of any state, Federal, municipal or other governmental law, order, rule or regulation subsequent to the date hereof (i) deducting from the value of real property for the purpose of taxation any lien or encumbrance thereon or in any
manner changing or modifying the laws now in force governing the taxation of this Mortgage or debts secured by mortgages or deeds of trust (other than laws governing income, franchise 

  

 6 

 
and similar taxes generally) or the manner of collecting taxes thereon and (ii) imposing a tax to be paid by Mortgagee, either directly or indirectly,
on this Mortgage or any of the Loan Documents, or requiring an amount of taxes to be withheld or deducted therefrom, Mortgagor will promptly (i) notify Mortgagee of such event, (ii) enter into such further instruments as Mortgagee may
determine are reasonably necessary or desirable to obligate Mortgagor to make any additional payments necessary to put the Lenders and Secured Parties in the same financial position they would have been if such law, order, rule or regulation had not
been passed and (iii) make such additional payments to Mortgagee for the benefit of the Lenders and Secured Parties. 
  
 SECTION 1.04. Maintenance of Mortgaged Property. Mortgagor will maintain the Improvements and the Personal Property in the manner required
by Section 5.06 of the Credit Agreement.2 
  
 SECTION 1.05. Insurance. Mortgagor will keep or cause to be kept the Improvements and Personal Property
insured against such risks, and in the manner, described in Schedule IV of the Security Agreement and shall purchase such additional insurance as may be required from time to time pursuant to Section 5.07 of the Credit Agreement. Federal
Emergency Management Agency Standard Flood Hazard Determination Forms will be purchased by Mortgagor for each Mortgaged Property on which Improvements are located. If any portion of Improvements constituting part of the Mortgaged Property is located
in an area identified as a special flood hazard area by Federal Emergency Management Agency or other applicable agency, Mortgagor will purchase flood insurance in an amount satisfactory to Mortgagee, but in no event less than the maximum limit of
coverage available under the National Flood Insurance Act of 1968, as amended. 
  
 SECTION 1.06. Casualty Condemnation/Eminent Domain. Mortgagor shall give Mortgagee prompt written notice of any material casualty or other material damage to the Mortgaged Property or any proceeding for
the taking of the Mortgaged Property or any portion thereof or interest therein under power of eminent domain or by condemnation or any similar proceeding in accordance with, and to the extent required by, Section 5.08 of the Credit Agreement.
Any Net Proceeds received by or on behalf of the Mortgagor in respect of any such casualty, damage or taking shall constitute trust funds held by the Mortgagor for the benefit of the Secured Parties to be applied to repair, restore or replace the
Mortgaged Property or, if a Prepayment Event shall occur with respect to any such Net Proceeds, to be applied in accordance with Section 2.12 of the Credit Agreement. 
  
 SECTION 1.07. Assignment of Leases and Rents. (a) Mortgagor hereby irrevocably and absolutely grants,
transfers and assigns all of its right title and interest in all Leases, together with any and all extensions and renewals thereof for purposes of securing and discharging the performance by Mortgagor of the Obligations. Mortgagor has not assigned
or executed any assignment of, and will not assign or execute any assignment of, any Leases or the Rents payable thereunder to anyone other than Mortgagee. 
  
  

  

	 	2	 	See Section 5.06 of the Credit Agreement. 

  

 7 

 (b) All Leases shall be subordinate to the lien of this Mortgage. Mortgagor will not enter into, modify
or amend any Lease if such Lease, as entered into, modified or amended, will not be subordinate to the lien of this Mortgage. 
  
 (c) Subject to Section 1.07(d), Mortgagor has assigned and transferred to Mortgagee all of Mortgagor’s right, title and interest in and to the
Rents now or hereafter arising from each Lease heretofore or hereafter made or agreed to by Mortgagor, it being intended that this assignment establish, subject to Section 1.07(d), an absolute transfer and assignment of all Rents and all Leases
to Mortgagee and not merely to grant a security interest therein. Subject to Section 1.07(d), Mortgagee may in Mortgagor’s name and stead (with or without first taking possession of any of the Mortgaged Property personally or by receiver
as provided herein) operate the Mortgaged Property and rent, lease or let all or any portion of any of the Mortgaged Property to any party or parties at such rental and upon such terms as Mortgagee shall, in its sole discretion, determine, and may
collect and have the benefit of all of said Rents arising from or accruing at any time thereafter or that may thereafter become due under any Lease. 
  
 (d) So long as an Event of Default shall not have occurred and be continuing, Mortgagee will not exercise any of its rights under Section 1.07(c),
and Mortgagor shall receive and collect the Rents accruing under any Lease; but after the happening and during the continuance of any Event of Default, Mortgagee may, at its option, receive and collect all Rents and enter upon the Premises and
Improvements through its officers, agents, employees or attorneys for such purpose and for the operation and maintenance thereof. Mortgagor hereby irrevocably authorizes and directs each tenant, if any, and each successor, if any, to the interest of
any tenant under any Lease, respectively, to rely upon any notice of a claimed Event of Default sent by Mortgagee to any such tenant or any of such tenant’s successors in interest, and thereafter to pay Rents to Mortgagee without any obligation
or right to inquire as to whether an Event of Default actually exists and even if some notice to the contrary is received from the Mortgagor, who shall have no right or claim against any such tenant or successor in interest for any such Rents so
paid to Mortgagee. Each tenant or any of such tenant’s successors in interest from whom Mortgagee or any officer, agent, attorney or employee of Mortgagee shall have collected any Rents, shall be authorized to pay Rents to Mortgagor only after
such tenant or any of their successors in interest shall have received written notice from Mortgagee that the Event of Default is no longer continuing, unless and until a further notice of an Event of Default is given by Mortgagee to such tenant or
any of its successors in interest. 
  
 (e) Mortgagee will not
become a mortgagee in possession so long as it does not enter or take actual possession of the Mortgaged Property. In addition, Mortgagee shall not be responsible or liable for performing any of the obligations of the landlord under any Lease, for
any waste by any tenant, or others, for any dangerous or defective conditions of any of the Mortgaged Property, for negligence in the management, upkeep, repair or control of any of the Mortgaged Property or any other act or omission by any other
person. 
  
 (f) Mortgagor shall furnish to Mortgagee, within
30 days after a request by Mortgagee to do so, a written statement containing the names of all tenants, subtenants and 

  

 8 

 
concessionaires of the Premises or Improvements, the terms of any Lease, the space occupied and the rentals and/or other amounts payable thereunder.

  
 SECTION 1.08. Restrictions on Transfers and
Encumbrances. Mortgagor shall not directly or indirectly sell, convey, alienate, assign, lease, sublease, license, mortgage, pledge, encumber or otherwise transfer, create, consent to or suffer the creation of any lien, charge or other form
of encumbrance upon any interest in or any part of the Mortgaged Property, or be divested of its title to the Mortgaged Property or any interest therein in any manner or way, whether voluntarily or involuntarily (other than resulting from a
condemnation), or engage in any common, cooperative, joint, time-sharing or other congregate ownership of all or part thereof, except in each case in accordance with and to the extent permitted by the Credit Agreement; provided, that
Mortgagor may, in the ordinary course of business and in accordance with reasonable commercial standards, enter into easement, covenant, lease and sublease agreements that relate to and/or benefit the operation of the Mortgaged Property and that
would not reasonably be expected to materially and adversely affect the value, use or operation of the Mortgaged Property in a negative manner. If any of the foregoing transfers or encumbrances results in a Prepayment Event, half of the Net Proceeds
received by or on behalf of the Mortgagor in respect thereof shall constitute trust funds to be held by the Mortgagor for the benefit of the Secured Parties and applied in accordance with Section 2.12 of the Credit Agreement. 
  
 SECTION 1.09. Security Agreement. This Mortgage is both a
mortgage of real property and a grant of a security interest in personal property, and shall constitute and serve as a “Security Agreement” within the meaning of the uniform commercial code as adopted in the state wherein the Premises are
located (“UCC”). Mortgagor has hereby granted unto Mortgagee a security interest in and to all the Mortgaged Property described in this Mortgage that is not real property, and simultaneously with the recording of this Mortgage, Mortgagor
has filed or will file UCC financing statements, and will file continuation statements prior to the lapse thereof, at the appropriate office in the jurisdiction of formation of the Mortgagor to perfect the security interest granted by this Mortgage
in all the Mortgaged Property that is not real property. Mortgagor hereby authorizes Mortgagee to file the same in the appropriate office, and to perform each and every act and thing reasonably requisite and necessary to be done to perfect the
security interest contemplated by the preceding sentence. Mortgagee shall have all rights with respect to the part of the Mortgaged Property that is the subject of a security interest afforded by the UCC in addition to, but not in limitation of, the
other rights afforded Mortgagee hereunder and under the Security Agreement. 
  
 SECTION 1.10. Filing and Recording. Mortgagor will cause this Mortgage, the UCC financing statements referred to in Section 1.09, any other security instrument creating a security interest in or
evidencing the lien hereof upon the Mortgaged Property and each UCC continuation statement and instrument of further assurance to be filed, registered or recorded and, if necessary, refiled, rerecorded and reregistered, in such manner and in such
places as may be required by any present or future law in order to publish notice of and fully to perfect the lien hereof upon, and the security interest of Mortgagee in, the Mortgaged Property until this Mortgage is terminated and released in full
in accordance with Section 3.04 hereof. Mortgagor will pay all filing, registration and recording fees, all Federal, state, county and municipal recording, documentary or intangible taxes and other taxes, duties, 

 9 

 
imposts, assessments and charges, and all reasonable expenses incidental to or arising out of or in connection with the execution, delivery and recording of
this Mortgage, UCC continuation statements any mortgage supplemental hereto, any security instrument with respect to the Personal Property, Permits, Plans and Warranties and Proceeds or any instrument of further assurance. 
  
 SECTION 1.11. Further Assurances. Upon demand by Mortgagee,
Mortgagor will, at the cost of Mortgagor and without expense to Mortgagee, do, execute, acknowledge and deliver all such further acts, deeds, conveyances, mortgages, assignments, notices of assignment, transfers and assurances as Mortgagee shall
from time to time reasonably require for the better assuring, conveying, assigning, transferring and confirming unto Mortgagee the property and rights hereby granted or pledged or intended now or hereafter so to be, or which Mortgagor may be or may
hereafter become bound to grant or pledge to Mortgagee, or for carrying out the intention or facilitating the performance of the terms of this Mortgage, or for filing, registering or recording this Mortgage, and on demand, Mortgagor will also
execute and deliver and hereby appoints Mortgagee as its true and lawful attorney-in-fact and agent, for Mortgagor and in its name, place and stead, in any and all capacities, to execute and file to the extent it may lawfully do so, one or more
financing statements, chattel mortgages or comparable security instruments reasonably requested by Mortgagee to evidence more effectively the lien hereof upon the Personal Property and to perform each and every act and thing requisite and necessary
to be done to accomplish the same. Anything in this Section 1.11 to the contrary notwithstanding, Mortgagee agrees that it will not exercise any rights under the power of attorney provided for in this Section 1.11 unless an Event of
Default shall have occurred and be continuing. 
  
 SECTION 1.12.
Additions to Mortgaged Property. All right, title and interest of Mortgagor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to, the Mortgaged Property
hereafter acquired by or released to Mortgagor or constructed, assembled or placed by Mortgagor upon the Premises or the Improvements, and all conversions of the security constituted thereby, immediately upon such acquisition, release, construction,
assembling, placement or conversion, as the case may be, and in each such case without any further mortgage, conveyance, assignment or other act by Mortgagor, shall become subject to the lien and security interest of this Mortgage as fully and
completely and with the same effect as though now owned by Mortgagor and specifically described in the grant of the Mortgaged Property above, but at any and all times Mortgagor will execute and deliver to Mortgagee any and all such further
assurances, mortgages, conveyances or assignments thereof as Mortgagee may reasonably require for the purpose of expressly and specifically subjecting the same to the lien and security interest of this Mortgage. 
  
 SECTION 1.13. No Claims Against Mortgagee. Nothing contained in
this Mortgage shall constitute any consent or request by Mortgagee, express or implied, for the performance of any labor or services or the furnishing of any materials or other property in respect of the Mortgaged Property or any part thereof, nor
as giving Mortgagor any right, power or authority to contract for or permit the performance of any labor or services or the furnishing of any materials or other property in such fashion as would permit the making of any claim against Mortgagee in
respect thereof. 
  

 10 

 SECTION 1.14. Fixture Filing. (a) Certain portions of the Mortgaged Property are or
will become “fixtures” (as that term is defined in the UCC) on the Land, and this Mortgage, upon being filed for record in the real estate records of the county wherein such fixtures are situated, shall operate also as a financing
statement filed as a fixture filing in accordance with the applicable provisions of said UCC upon such portions of the Mortgaged Property that are or become fixtures. 
  
 (b) The real property to which the fixtures relate is described in Exhibit A attached hereto. The record owner of the real
property described in Exhibit A attached hereto is Mortgagor. The name, type of organization and jurisdiction of organization of the debtor for purposes of this financing statement are the name, type of organization and jurisdiction of organization
of the Mortgagor set forth in the first paragraph of this Mortgage, and the name of the secured party for purposes of this financing statement is the name of the Mortgagee set forth in the first paragraph of this Mortgage. The mailing address of the
Mortgagor/debtor is the address of the Mortgagor set forth in the first paragraph of this Mortgage. The mailing address of the Mortgagee/secured party from which information concerning the security interest hereunder may be obtained is the address
of the Mortgagee set forth in the first paragraph of this Mortgage. Mortgagor’s organizational identification number is [2210588 – Blockbuster Inc.] [2211540 – Blockbuster Distribution, Inc.]. 
  
 ARTICLE II 
  
 Defaults and Remedies 
  
 SECTION 2.01. Events of Default. Any Event of Default under the Credit Agreement (as such term is defined therein) shall constitute an Event
of Default under this Mortgage. 
  
 SECTION 2.02. Demand for
Payment. If an Event of Default shall occur and be continuing, then, upon written demand of Mortgagee, Mortgagor will pay to Mortgagee all amounts due hereunder and under the Credit Agreement and the Security Agreement and such further
amount as shall be sufficient to cover the costs and expenses of collection, including attorneys’ fees, disbursements and expenses incurred by Mortgagee, and Mortgagee shall be entitled and empowered to institute an action or proceedings at law
or in equity for the collection of the sums so due and unpaid, to prosecute any such action or proceedings to judgment or final decree, to enforce any such judgment or final decree against Mortgagor and to collect, in any manner provided by law, all
moneys adjudged or decreed to be payable. 
  
 SECTION 2.03.
Rights To Take Possession, Operate and Apply Revenues. (a) If an Event of Default shall occur and be continuing, Mortgagor shall, upon demand of Mortgagee, forthwith surrender to Mortgagee actual possession of the Mortgaged
Property and, if and to the extent not prohibited by applicable law, Mortgagee itself, or by such officers or agents as it may appoint, may then enter and take possession of all the Mortgaged Property without the appointment of a receiver or an
application therefor, exclude Mortgagor and its agents and 

  

 11 

 
employees wholly therefrom, and have access to the books, papers and accounts of Mortgagor. 
  
 (b) If Mortgagor shall for any reason fail to surrender or deliver the Mortgaged Property or any part thereof after such
demand by Mortgagee, Mortgagee may to the extent not prohibited by applicable law, obtain a judgment or decree conferring upon Mortgagee the right to immediate possession or requiring Mortgagor to deliver immediate possession of the Mortgaged
Property to Mortgagee, to the entry of which judgment or decree Mortgagor hereby specifically consents. Mortgagor will pay to Mortgagee, upon demand, all reasonable expenses of obtaining such judgment or decree, including reasonable compensation to
Mortgagee’s attorneys and agents with interest thereon at the rate per annum applicable to overdue amounts under the Credit Agreement as provided in Section 2.14(d) of the Credit Agreement (the “Interest Rate”); and all such
expenses and compensation shall, until paid, be secured by this Mortgage. 
  
 (c) Upon every such entry or taking of possession, Mortgagee may, to the extent not prohibited by applicable law, hold, store, use, operate, manage and control the Mortgaged Property, conduct the business thereof and,
from time to time, (i) make all necessary and proper maintenance, repairs, renewals, replacements, additions, betterments and improvements thereto and thereon, (ii) insure or keep the Mortgaged Property insured, (iii) manage and
operate the Mortgaged Property and exercise all the rights and powers of Mortgagor to the same extent as Mortgagor could in its own name or otherwise with respect to the same, or (iv) enter into any and all agreements with respect to the
exercise by others of any of the powers herein granted Mortgagee, all as may from time to time be directed or determined by Mortgagee to be in its best interest and Mortgagor hereby appoints Mortgagee as its true and lawful attorney-in-fact and
agent, for Mortgagor and in its name, place and stead, in any and all capacities, to perform any of the foregoing acts. Mortgagee may collect and receive all the Rents, issues, profits and revenues from the Mortgaged Property, including those past
due as well as those accruing thereafter, and, after deducting (i) all reasonable expenses of taking, holding, managing and operating the Mortgaged Property (including compensation for the services of all persons employed for such purposes),
(ii) the costs of all such maintenance, repairs, renewals and replacements, (iii) the costs of insurance, (iv) such taxes, assessments and other similar charges as Mortgagee may at its option pay, (v) other proper charges upon
the Mortgaged Property or any part thereof and (vi) the compensation, expenses and disbursements of the attorneys and agents of Mortgagee, Mortgagee shall apply the remainder of the moneys and proceeds so received first to the payment of the
Mortgagee for the satisfaction of the Obligations, and second, if there is any surplus, to Mortgagor, subject to the entitlement of others thereto under applicable law. 
  
 (d) Whenever, before any sale of the Mortgaged Property under Section 2.06, all Obligations that are then due shall
have been paid and all Events of Default fully cured, Mortgagee will surrender possession of the Mortgaged Property back to Mortgagor, its successors or assigns. The same right of taking possession shall, however, arise again if any subsequent Event
of Default shall occur and be continuing. 
  
 SECTION 2.04.
Right To Cure Mortgagor’s Failure to Perform. Should Mortgagor fail in the payment, performance or observance of any term, covenant or condition required 

  

 12 

 
by this Mortgage or the Credit Agreement (with respect to the Mortgaged Property) when due (after giving effect to any applicable cure or grace period),
Mortgagee may pay, perform or observe the same, and all payments made or costs or expenses incurred by Mortgagee in connection therewith shall be secured hereby and shall be, without demand, immediately repaid by Mortgagor to Mortgagee with interest
thereon at the Interest Rate to accrue on any unpaid amount after demand for repayment is made. Mortgagee, using commercially reasonable discretion, shall be the judge of the necessity for any such actions and of the amounts to be paid. Mortgagee is
hereby empowered to enter and to authorize others to enter upon the Premises or the Improvements or any part thereof for the purpose of performing or observing any such defaulted term, covenant or condition without having any obligation to so
perform or observe and without thereby becoming liable to Mortgagor, to any person in possession holding under Mortgagor or to any other person. 
  
 SECTION 2.05. Right to a Receiver. If an Event of Default shall occur and be continuing, Mortgagee, upon application to a court of competent
jurisdiction, shall be entitled as a matter of right to the appointment of a receiver to take possession of and to operate the Mortgaged Property and to collect and apply the Rents. The receiver shall have all of the rights and powers permitted
under the laws of the state wherein the Mortgaged Property is located. Mortgagor shall pay to Mortgagee upon demand all reasonable expenses, including receiver’s fees, reasonable attorney’s fees and disbursements, costs and agent’s
compensation incurred pursuant to the provisions of this Section 2.05; and all such expenses shall be secured by this Mortgage and shall be, without demand, immediately repaid by Mortgagor to Mortgagee with interest thereon at the Interest
Rate. 
  
 SECTION 2.06. Foreclosure and Sale.
(a) If an Event of Default shall occur and be continuing, Mortgagee may elect to sell the Mortgaged Property or any part of the Mortgaged Property by exercise of the power of foreclosure or of sale granted to Mortgagee by applicable law or this
Mortgage. In such case, Mortgagee may commence a civil action to foreclose this Mortgage, or it may proceed and sell the Mortgaged Property to satisfy any Obligation. Mortgagee or an officer appointed by a judgment of foreclosure to sell the
Mortgaged Property, may sell all or such parts of the Mortgaged Property as may be chosen by Mortgagee at the time and place of sale fixed by it in a notice of sale, either as a whole or in separate lots, parcels or items as Mortgagee shall deem
expedient, and in such order as it may determine, at public auction to the highest bidder. Mortgagee or an officer appointed by a judgment of foreclosure to sell the Mortgaged Property may postpone any foreclosure or other sale of all or any portion
of the Mortgaged Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement or subsequently noticed sale. Without further notice, Mortgagee or an officer appointed
to sell the Mortgaged Property may make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale. Any person, including Mortgagor or Mortgagee or any designee or affiliate thereof, may purchase at
such sale. 
  
 (b) The Mortgaged Property may be sold subject to
unpaid taxes and Permitted Encumbrances, and, after deducting all costs, fees and expenses of Mortgagee (including costs of evidence of title in connection with the sale), Mortgagee or an officer that makes any sale shall apply the proceeds of sale
in the manner set forth in Section 2.08. 
  

 13 

 (c) Any foreclosure or other sale of less than the whole of the Mortgaged Property or any defective or
irregular sale made hereunder shall not exhaust the power of foreclosure or of sale provided for herein; and subsequent sales may be made hereunder until the Obligations have been satisfied, or the entirety of the Mortgaged Property has been sold.

  
 (d) If an Event of Default shall occur and be continuing,
Mortgagee may instead of, or in addition to, exercising the rights described in Section 2.06(a) above and either with or without entry or taking possession as herein permitted, proceed by a suit or suits in law or in equity or by any other
appropriate proceeding or remedy (i) to specifically enforce payment of some or all of the Obligations, or the performance of any term, covenant, condition or agreement of this Mortgage or any other Loan Document or any other right, or
(ii) to pursue any other remedy available to Mortgagee, all as Mortgagee shall determine most effectual for such purposes. 
  
 SECTION 2.07. Other Remedies. (a) In case an Event of Default shall occur and be continuing, Mortgagee may also exercise, to the extent
not prohibited by law, any or all of the remedies available to a secured party under the UCC. 
  
 (b) In connection with a sale of the Mortgaged Property or any Personal Property and the application of the proceeds of sale as provided in Section 2.08, Mortgagee shall be entitled to enforce payment of and to
receive up to the principal amount of the Obligations, plus all other charges, payments and costs due under this Mortgage, and to recover a deficiency judgment for any portion of the aggregate principal amount of the Obligations remaining unpaid,
with interest. 
  
 SECTION 2.08. Application of Sale
Proceeds and Rents. After any foreclosure sale of all or any of the Mortgaged Property, Mortgagee shall receive and apply the proceeds of the sale together with any Rents that may have been collected and any other sums that then may be held
by Mortgagee under this Mortgage as follows: 
  
 FIRST, to the payment of the costs and expenses of such sale, including compensation to Mortgagee’s attorneys and agents, and of any judicial proceedings wherein the same may be made, and of all expenses, liabilities and advances made
or incurred by Mortgagee under this Mortgage, together with interest at the Interest Rate on all advances made by Mortgagee, including all taxes or assessments (except any taxes, assessments or other charges subject to which the Mortgaged Property
shall have been sold) and the cost of removing any Permitted Encumbrance (except any Permitted Encumbrance subject to which the Mortgaged Property was sold); 
  

SECOND, to the Mortgagee for the distribution to the Secured Parties for the satisfaction of the Obligations owed to the Secured
Parties; and 
  
 THIRD, to the Mortgagor, its
successors or assigns, or as a court of competent jurisdiction may otherwise direct. 
  
 The Mortgagee shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Mortgage. Upon any sale of the Mortgaged Property by the Mortgagee (including pursuant to a power of
sale granted by 

  

 14 

 
statute or under a judicial proceeding), the receipt of the Mortgagee or of the officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Mortgaged Property so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Mortgagee or such officer or be answerable in any way for the
misapplication thereof. 
  
 SECTION 2.09. Mortgagor as
Tenant Holding Over. If Mortgagor remains in possession of any of the Mortgaged Property after any foreclosure sale by Mortgagee, at Mortgagee’s election Mortgagor shall be deemed a tenant holding over and shall forthwith surrender
possession to the purchaser or purchasers at such sale or be summarily dispossessed or evicted according to provisions of law applicable to tenants holding over. 
  
 SECTION 2.10. Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws. Mortgagor waives, to the
extent not prohibited by law, (i) the benefit of all laws now existing or that hereafter may be enacted in any way extending the time for the enforcement or the collection of amounts due under any of the Obligations or creating or extending a
period of redemption from any sale made in collecting said debt or any other amounts due Mortgagee, (ii) any right to at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any
homestead exemption, stay, statute of limitations, extension or redemption, or sale of the Mortgaged Property as separate tracts, units or estates or as a single parcel in the event of foreclosure or notice of deficiency, and (iii) all rights
of redemption, stay of execution, notice of election to mature or declare due the whole of or each of the Obligations and marshaling in the event of foreclosure of this Mortgage. 
  
 SECTION 2.11. Discontinuance of Proceedings. In case Mortgagee shall proceed to enforce any right, power or
remedy under this Mortgage by foreclosure, entry or otherwise, and such proceedings shall be discontinued or abandoned for any reason, or shall be determined adversely to Mortgagee, then and in every such case Mortgagor and Mortgagee shall be
restored to their former positions and rights hereunder, and all rights, powers and remedies of Mortgagee shall continue as if no such proceeding had been taken. 
  
 SECTION 2.12. Suits To Protect the Mortgaged Property. Mortgagee shall have power (a) to institute and
maintain suits and proceedings to prevent any impairment of the Mortgaged Property by any acts that may be unlawful or in violation of this Mortgage, (b) to preserve or protect its interest in the Mortgaged Property and in the Rents arising
therefrom and (c) to restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of or compliance with such enactment, rule
or order would impair the security or be prejudicial to the interest of Mortgagee hereunder. 
  
 SECTION 2.13. Filing Proofs of Claim. In case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting Mortgagor, Mortgagee shall,
to the extent permitted by law, be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of Mortgagee allowed in such proceedings for the Obligations secured by this Mortgage at the
date of the institution of such proceedings and for any interest accrued, late 

  

 15 

 
charges and additional interest or other amounts due or that may become due and payable hereunder after such date. 
  
 SECTION 2.14. Possession by Mortgagee. Notwithstanding the
appointment of any receiver, liquidator or trustee of Mortgagor, any of its property or the Mortgaged Property, Mortgagee shall be entitled, to the extent not prohibited by law, to remain in possession and control of all parts of the Mortgaged
Property now or hereafter granted under this Mortgage to Mortgagee in accordance with the terms hereof and applicable law. 
  
 SECTION 2.15. Waiver. (a) No delay or failure by Mortgagee to exercise any right, power or remedy accruing upon any breach or Event of
Default shall exhaust or impair any such right, power or remedy or be construed to be a waiver of any such breach or Event of Default or acquiescence therein; and every right, power and remedy given by this Mortgage to Mortgagee may be exercised
from time to time and as often as may be deemed expedient by Mortgagee. No consent or waiver by Mortgagee to or of any breach or Event of Default by Mortgagor in the performance of the Obligations shall be deemed or construed to be a consent or
waiver to or of any other breach or Event of Default in the performance of the same or of any other Obligations by Mortgagor hereunder. No failure on the part of Mortgagee to complain of any act or failure to act or to declare an Event of Default,
irrespective of how long such failure continues, shall constitute a waiver by Mortgagee of its rights hereunder or impair any rights, powers or remedies consequent on any future Event of Default by Mortgagor. 
  
 (b) Even if Mortgagee (i) grants some forbearance or an extension of
time for the payment of any sums secured hereby, (ii) takes other or additional security for the payment of any sums secured hereby, (iii) waives or does not exercise some right granted herein or under the Loan Documents,
(iv) releases a part of the Mortgaged Property from this Mortgage, (v) agrees to change some of the terms, covenants, conditions or agreements of any of the Loan Documents, (vi) consents to the filing of a map, plat or replat
affecting the Premises, (vii) consents to the granting of an easement or other right affecting the Premises or (viii) makes or consents to an agreement subordinating Mortgagee’s lien on the Mortgaged Property hereunder; no such act or
omission shall preclude Mortgagee from exercising any other right, power or privilege herein granted or intended to be granted in the event of any breach or Event of Default then made or of any subsequent default; nor, except as otherwise expressly
provided in an instrument executed by Mortgagee, shall this Mortgage be altered thereby. In the event of the sale or transfer by operation of law or otherwise of all or part of the Mortgaged Property, Mortgagee is hereby authorized and empowered to
deal with any vendee or transferee with reference to the Mortgaged Property secured hereby, or with reference to any of the terms, covenants, conditions or agreements hereof, as fully and to the same extent as it might deal with the original parties
hereto and without in any way releasing or discharging any liabilities, obligations or undertakings. 
  
 SECTION 2.16. Waiver of Trial by Jury. To the fullest extent permitted by applicable law, Mortgagor and Mortgagee each hereby irrevocably
and unconditionally waive trial by jury in any action, claim, suit or proceeding relating to this Mortgage and for any counterclaim brought therein. To the fullest extent permitted by applicable law, Mortgagor hereby waives all rights to interpose
any counterclaim in any suit brought by 

  

 16 

 
Mortgagee hereunder and all rights to have any such suit consolidated with any separate suit, action or proceeding. 
  
 SECTION 2.17. Remedies Cumulative. No right, power or remedy
conferred upon or reserved to Mortgagee by this Mortgage is intended to be exclusive of any other right, power or remedy, and each and every such right, power and remedy shall be cumulative and concurrent and in addition to any other right, power
and remedy given hereunder or now or hereafter existing at law or in equity or by statute. 
  
 ARTICLE III 
  
 Miscellaneous

  
 SECTION 3.01. Partial Invalidity. In the
event any one or more of the provisions contained in this Mortgage shall for any reason be held to be invalid, illegal or unenforceable in any respect, such validity, illegality or unenforceability shall, at the option of Mortgagee, not affect any
other provision of this Mortgage, and this Mortgage shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein. 
  
 SECTION 3.02. Notices. All notices and communications hereunder shall be in writing and given to Mortgagor in
accordance with the terms of the Credit Agreement at the address set forth on the first page of this Mortgage and to the Mortgagee as provided in the Credit Agreement. 
  
 SECTION 3.03. Successors and Assigns. All of the grants, covenants, terms, provisions and conditions herein
shall run with the Premises and the Improvements and shall apply to, bind and inure to, the benefit of the permitted successors and assigns of Mortgagor and the successors and assigns of Mortgagee. 
  
 SECTION 3.04. Satisfaction and Cancelation. (a) [The
security interest granted to Mortgagee of the Mortgaged Property as security created and consummated by this Mortgage shall be null and void when all the Obligations have been indefeasibly paid in full in accordance with the terms of the Loan
Documents and the Lenders have no further commitment to make Loans under the Credit Agreement, no Letters of Credit are outstanding and the Issuing Bank has no further obligation to issue Letters of Credit under the Credit Agreement. 
  
 (b) Upon a sale or financing by Mortgagor of all or any portion of the
Mortgaged Property that is permitted by the Credit Agreement and the application of the Net Proceeds of such sale or financing in accordance with the terms of the Credit Agreement, the lien of this Mortgage shall be released from the applicable
portion of the Mortgaged Property. Mortgagor shall give the Mortgagee reasonable written notice of any sale or financing of the Mortgaged Property prior to the closing of such sale or financing. 
  
 (c) In connection with any termination or release pursuant to
paragraph (a), the Mortgage shall be marked “satisfied” by the Mortgagee, and this Mortgage shall be canceled 

  

 17 

 
of record at the request and at the expense of the Mortgagor. Mortgagee shall execute any documents reasonably requested by Mortgagor to accomplish the
foregoing or to accomplish any release contemplated by this Section 3.04 and Mortgagor will pay all costs and expenses, including reasonable attorneys’ fees, disbursements and other charges, incurred by Mortgagee in connection with the
preparation and execution of such documents.] 
  
 SECTION 3.05.
Definitions. As used in this Mortgage, the singular shall include the plural as the context requires and the following words and phrases shall have the following meanings: (a) ”including” shall mean
“including but not limited to”; (b) ”provisions” shall mean “provisions, terms, covenants and/or conditions”; (c) ”lien” shall mean “lien, charge, encumbrance, security interest,
mortgage or deed of trust”; (d) ”obligation” shall mean “obligation, duty, covenant and/or condition”; and (e) ”any of the Mortgaged Property” shall mean “the Mortgaged Property or any part
thereof or interest therein”. Any act that Mortgagee is permitted to perform hereunder may be performed at any time and from time to time by Mortgagee or any person or entity designated by Mortgagee. Any act that is prohibited to Mortgagor
hereunder is also prohibited to all lessees of any of the Mortgaged Property. Each appointment of Mortgagee as attorney-in-fact for Mortgagor under the Mortgage is irrevocable, with power of substitution and coupled with an interest. Subject to the
applicable provisions hereof, Mortgagee has the right to refuse to grant its consent, approval or acceptance or to indicate its satisfaction, in its sole discretion, whenever such consent, approval, acceptance or satisfaction is required hereunder.

  
 SECTION 3.06. Multisite Real Estate Transaction.
Mortgagor acknowledges that this Mortgage is one of a number of Other Mortgages and Security Documents that secure the Obligations. Mortgagor agrees that the lien of this Mortgage shall be absolute and unconditional and shall not in any manner be
affected or impaired by any acts or omissions whatsoever of Mortgagee, and without limiting the generality of the foregoing, the lien hereof shall not be impaired by any acceptance by the Mortgagee of any security for or guarantees of any of the
Obligations hereby secured, or by any failure, neglect or omission on the part of Mortgagee to realize upon or protect any Obligation or indebtedness hereby secured or any collateral security therefor including the Other Mortgages and other Security
Documents. The lien hereof shall not in any manner be impaired or affected by any release (except as to the property released), sale, pledge, surrender, compromise, settlement, renewal, extension, indulgence, alteration, changing, modification or
disposition of any of the Obligations secured or of any of the collateral security therefor, including the Other Mortgages and other Security Documents or of any guarantee thereof, and Mortgagee may at its discretion foreclose, exercise any power of
sale, or exercise any other remedy available to it under any or all of the Other Mortgages and other Security Documents without first exercising or enforcing any of its rights and remedies hereunder. Such exercise of Mortgagee’s rights and
remedies under any or all of the Other Mortgages and other Security Documents shall not in any manner impair the indebtedness hereby secured or the lien of this Mortgage and any exercise of the rights or remedies of Mortgagee hereunder shall not
impair the lien of any of the Other Mortgages and other Security Documents or any of Mortgagee’s rights and remedies thereunder. Mortgagor specifically consents and agrees that Mortgagee may exercise its rights and remedies hereunder and under
the Other Mortgages and other Security Documents separately or concurrently and in any order that it may deem appropriate and waives any rights of subrogation. 
  

 18 

 SECTION 3.07. No Oral Modification. This Mortgage may not be changed or terminated orally.
Any agreement made by Mortgagor and Mortgagee after the date of this Mortgage relating to this Mortgage shall be superior to the rights of the holder of any intervening or subordinate Mortgage, lien or encumbrance. 
  
 ARTICLE IV 
  
 Particular Provisions 
  
 This Mortgage is subject to the following provisions relating to the particular laws of the state wherein the Premises are located: 
  
 SECTION 4.01. Applicable Law; Certain Particular Provisions.
This Mortgage shall be governed by and construed in accordance with the internal law of the state where the Mortgaged Property is located, except that Mortgagor expressly acknowledges that by their terms, the Credit Agreement and other Loan
Documents (aside from those Other Mortgages to be recorded outside New York) shall be governed by the internal law of the State of New York, without regard to principles of conflict of law. Mortgagor and Mortgagee agree to submit to
jurisdiction and the laying of venue for any suit on this Mortgage in the state where the Mortgaged Property is located. The terms and provisions set forth in Appendix A attached hereto are hereby incorporated by reference as though fully set
forth herein. In the event of any conflict between the terms and provisions contained in the body of this Mortgage and the terms and provisions set forth in Appendix A, the terms and provisions set forth in Appendix A shall govern and
control. 
  

 19 

 IN WITNESS WHEREOF, this Mortgage has been duly executed and delivered to Mortgagee by Mortgagor on the
date of the acknowledgment attached hereto. 
  

					
	 [BLOCKBUSTER INC.]
 [BLOCKBUSTER
DISTRIBUTION, INC.],
 a Delaware corporation,

			
	 	 	 by:
	 	  
  

	 	 	 	 	 Name:
 Title:

  

			
	 Attest:

		
	 by:
	 	  
  

	 	 	 Name:
 Title:

  
 [Corporate Seal] 
  

 20 

 [ADD LOCAL FORM OF ACKNOWLEDGMENT] 
  

 21 

 Exhibit A 
 To Mortgage 
  
 Description of
the Land 

 Appendix A 
 To Mortgage 
  
 Local Law
Provisions 
  
 1. Notwithstanding anything else contained in
this Mortgage, (i) the maximum principal debt or obligation which is, or under any contingency may be secured at the date of execution hereof or any time thereafter by this Mortgage is [$ {insert approximate fair market value of
Mortgaged Property}] (the “Secured Amount”), (ii) this Mortgage shall also secure amounts other than the principal debt or obligation to the extent permitted by the Tax Law without payment of additional recording tax and
(iii) so long as the aggregate amount of the Obligations exceeds the Secured Amount, any payments and repayments of the Obligations shall not be deemed to be applied against, or to reduce, the Secured Amount.3 
  
  

  
 3 Applicable only in mortgage tax states. This is the New York
language—local counsel to advise whether it needs to be modified in other mortgage tax states. 

 EXHIBIT B 
  
 Form of Security Agreement 
  
 EXECUTION VERSION 
  

 
  
 SECURITY AGREEMENT 
  
 dated as of 
  
 August 8, 2005, 
  
 among 
  
 BLOCKBUSTER INC., 
  
 THE SUBSIDIARIES OF BLOCKBUSTER INC. 
 IDENTIFIED HEREIN 
  
 and 
  
 JPMORGAN CHASE BANK, N.A., 
  
 as Collateral Agent 
  
  

 TABLE OF CONTENTS 
  

			
		
	ARTICLE I	  	 
		
	Definitions	  	 
		
	 SECTION 1.01. Credit Agreement
	  	1
		
	 SECTION 1.02. Other Defined Terms
	  	1
		
	ARTICLE II	  	 
		
	Pledge of Debt Securities	  	 
		
	 SECTION 2.01. Pledge
	  	5
		
	 SECTION 2.02. Delivery of the Pledged Collateral
	  	5
		
	 SECTION 2.03. Representations, Warranties and Covenants
	  	6
		
	 SECTION 2.04. Registration in Nominee Name; Denominations
	  	7
		
	 SECTION 2.05. Voting Rights; Interest
	  	7
		
	ARTICLE III	  	 
		
	Security Interests in Personal Property	  	 
		
	 SECTION 3.01. Security Interest
	  	9
		
	 SECTION 3.02. Representations and Warranties
	  	11
		
	 SECTION 3.03. Covenants
	  	13
		
	 SECTION 3.04. Other Actions
	  	16
		
	 SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright Collateral
	  	18
		
	ARTICLE IV	  	 
		
	Remedies	  	 
		
	 SECTION 4.01. Remedies Upon Default
	  	20
		
	 SECTION 4.02. Application of Proceeds
	  	22
		
	 SECTION 4.03. Grant of License to Use Intellectual Property
	  	22

			
		
	 SECTION 4.04. Securities Act
	  	23
		
	ARTICLE V	  	 
		
	Indemnity, Subrogation and Subordination	  	 
		
	 SECTION 5.01. Indemnity and Subrogation
	  	23
		
	 SECTION 5.02. Contribution and Subrogation
	  	23
		
	 SECTION 5.03. Subordination
	  	24
		
	ARTICLE VI	  	 
		
	Miscellaneous	  	 
		
	 SECTION 6.01. Notices
	  	24
		
	 SECTION 6.02. Waivers; Amendment
	  	24
		
	 SECTION 6.03. Collateral Agent’s Fees and Expenses; Indemnification
	  	25
		
	 SECTION 6.04. Successors and Assigns
	  	26
		
	 SECTION 6.05. Survival of Agreement
	  	26
		
	 SECTION 6.06. Counterparts; Effectiveness; Several Agreement
	  	26
		
	 SECTION 6.07. Severability
	  	26
		
	 SECTION 6.08. Right of Set-Off
	  	27
		
	 SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process
	  	27
		
	 SECTION 6.10. WAIVER OF JURY TRIAL
	  	28
		
	 SECTION 6.11. Headings
	  	28
		
	 SECTION 6.12. Security Interest Absolute
	  	28
		
	 SECTION 6.13. Termination or Release
	  	28
		
	 SECTION 6.14. Additional Subsidiaries
	  	29
		
	 SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact
	  	29

			
	 Schedules
	 	 
		
	 Schedule I
	 	 Subsidiary Parties

	 Schedule II
	 	 Pledged Debt Securities

	 Schedule III
	 	 Patents, Trademarks and Copyrights

	 Schedule IV
	 	 Commercial Tort Claims

	 Schedule V
	 	 Insurance Requirements

		
	 Exhibits
	 	 
		
	 Exhibit I
	 	 Form of Supplement

 SECURITY AGREEMENT dated as of August 8, 2005 (this “Agreement”),
among BLOCKBUSTER INC. (the “Borrower”), the Subsidiaries of the Borrower identified herein and JPMORGAN CHASE BANK, N.A., as Collateral Agent (the “Collateral Agent”). 
  
 Reference is made to the Credit Agreement dated as of August 20, 2004,
as amended by the First Amendment dated as of May 4, 2005 and the Second Amendment and Waiver dated as of August 8, 2005 (as further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent for such Lenders. The Lenders have extended, and have agreed to further extend, credit to the Borrower subject to the terms and
conditions set forth in the Credit Agreement. The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement. The Subsidiary Parties are affiliates of the Borrower, will
derive substantial benefits from the continued extension of credit to the Borrower pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders to further extend such credit. Accordingly, the
parties hereto agree as follows: 
  
 ARTICLE I 
  
 Definitions 
  
 SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and not otherwise defined
herein have the meanings specified in the Credit Agreement. All terms defined in the New York UCC and not defined in this Agreement have the meanings specified therein; the term “instrument” shall have the meaning specified in
Article 9 of the New York UCC. 
  
 (b)
The rules of construction specified in Sections 1.03 and 1.04 of the Credit Agreement also apply to this Agreement. 
  
 SECTION 1.02. Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below: 
  
 “Account Debtor” means any Person who is or who may become
obligated to any Grantor under, with respect to, or on account of, an Account. 
  
 “Agreement” has the meaning assigned to term in the preliminary statement of this Agreement. 
  
 “Article 9 Collateral” has the meaning assigned to such term in Section 3.01. 
  
 “Claiming Party” has the meaning assigned to such term in
Section 5.02. 

 “Collateral” means Article 9 Collateral and Pledged Collateral. 
  
 “Contributing Party” has the meaning assigned to such term
in Section 5.02. 
  
 “Copyright License”
means any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter owned by any Grantor or that such Grantor otherwise has the right to license, or granting any right to any Grantor
under any Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement. 
  
 “Copyright” means all of the following now owned or hereafter acquired by any Grantor: (a) all copyright rights in any work subject
to the copyright laws of the United States, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States, including registrations, recordings,
supplemental registrations and pending applications for registration in the United States Copyright Office, including those listed on Schedule III, but not including any of the four copyrights listed on Schedule III as being owned of record by
Blockbuster Entertainment Corporation until such time as a Grantor becomes a record owner of such copyrights as contemplated by Section 3.03(n). 
  
 “Credit Agreement” has the meaning assigned to such term in the preliminary statement of this Agreement. 
  
 “Federal Securities Laws” has the meaning assigned to such
term in Section 4.04. 
  
 “General
Intangibles” means all choses in action and causes of action and all other intangible personal property of every kind and nature (other than Accounts) now owned or hereafter acquired by any Grantor, including corporate or other business
records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Hedging Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and
any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the Accounts. 
  
 “Grantors” means the Borrower and the Subsidiary Parties. 
  
 “Intellectual Property” means all intellectual and similar
property of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or
used in connection with, any of the foregoing. 
  

 2 

 “License” means any Patent License, Trademark License, Copyright License or other
license or sublicense agreement to which any Grantor is a party. 
  
 “Loan Document Obligations” means (a) the due and punctual payment by the Borrower of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required
to be made by the Borrower under the Credit Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral, and
(iii) all other monetary obligations of the Borrower to any of the Secured Parties under the Credit Agreement and each of the other Loan Documents, including obligations to pay fees, expense reimbursement obligations and indemnification
obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Borrower under or pursuant to the Credit Agreement and each of the other Loan Documents, and (c) the due and punctual payment and
performance of all the obligations of each other Loan Party under or pursuant to this Agreement and each of the other Loan Documents. 
  
 “New York UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York. 
  
 “Obligations” means (a) Loan Document Obligations and
(b) the due and punctual payment and performance of all obligations of each Loan Party under each Hedging Agreement that (i) is in effect on the Second Amendment Effective Date with a counterparty that was a Lender or an Affiliate of a
Lender at the time each Hedging Agreement was entered into or (ii) is entered into after the Second Amendment Effective Date with any counterparty that is a Lender or an Affiliate of a Lender at the time such Hedging Agreement is entered into.

  
 “Patent License” means any written agreement,
now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a Patent, now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, is in existence, or granting to any
Grantor any right to make, use or sell any invention on which a Patent, now or hereafter owned by any third party, is in existence, and all rights of any Grantor under any such agreement. 
  
 “Patents” means all of the following now owned or hereafter acquired by any Grantor: (a) all letters
patent of the United States, all registrations and recordings thereof, and all applications for letters patent of the United States, including registrations, recordings and pending applications in the United States Patent and Trademark Office,
including those listed on Schedule III, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or 

  

 3 

 
claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein. 
  
 “Pledged Collateral” has the meaning assigned to such term
in Section 2.01. 
  
 “Pledged Securities”
means any promissory notes or other debt securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral. 
  
 “Proceeds” has the meaning specified in Section 9-102
of the New York UCC. 
  
 “Secured Parties” means
(a) the Lenders, (b) the Collateral Agent, (c) the Issuing Bank, (d) each counterparty that is a Lender or an Affiliate of a Lender to any Hedging Agreement with a Loan Party the obligations under which constitute Obligations,
(e) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document and (f) the successors and assigns of each of the foregoing. 
  
 “Security Interest” has the meaning assigned to such term in Section 4.01. 
  
 “Subsidiary Parties” means (a) the Subsidiary Loan
Parties identified on Schedule I and (b) each other Subsidiary Loan Party that becomes a party to this Agreement as a Subsidiary Party after the Second Amendment Effective Date. 
  
 “Trademark License” means any written agreement, now or hereafter in effect, granting to any third party
any right to use any Trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any Trademark now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement. 
  
 “Trademarks” means all of the following now owned or hereafter acquired by any Grantor: (a) all United States trademarks, service marks, trade names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and
recording applications filed in the United States in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in any State of the United States, and all
extensions or renewals thereof, including those listed on Schedule III, (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill.

  

 4 

 ARTICLE II 
  
 Pledge of Debt Securities 
  
 SECTION 2.01. Pledge. As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and
pledges to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest
in, all of such Grantor’s right, title and interest in, to and under (a)(i) the debt securities listed opposite the name of such Grantor on Schedule II, (ii) any debt securities in the future issued to such Grantor and
(iii) the promissory notes and any other instruments evidencing such debt securities, (b) all other property that may be delivered to and held by the Collateral Agent pursuant to the terms of this Section 2.01 or Section 2.02,
(c) subject to Section 2.05, all payments of principal or interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all
other Proceeds received in respect of, the securities referred to in clause (a) above, (d) subject to Section 2.05, all rights and privileges of such Grantor with respect to the securities and other property referred to in
clauses (a), (b) and (c) above, and (e) all Proceeds of any of the foregoing (the items referred to in clauses (a) through (e) above being collectively referred to as the “Pledged Collateral”).

  
 TO HAVE AND TO HOLD the Pledged Collateral, together with all
right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, forever; subject, however, to the
terms, covenants and conditions hereinafter set forth. 
  
 SECTION
2.02. Delivery of the Pledged Collateral. (a) Subject to Sections 3.03(e) and 3.04(a), each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities. 
  
 (b) Each Grantor will cause any Indebtedness for borrowed
money in excess of $500,000 owed to such Grantor by any Person to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent pursuant to the terms hereof. 
  
 (c) Upon delivery to the Collateral Agent, (i) any
Pledged Securities shall be accompanied by instruments of transfer satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request and (ii) all other property comprising part of
the Pledged Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request. Each delivery of Pledged Securities shall
be accompanied by a schedule describing the securities, which schedule shall be attached hereto as Schedule II and made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of such pledge
of such Pledged 

  

 5 

 
Securities. Each schedule so delivered shall supplement any prior schedules so delivered. 
  
 SECTION 2.03. Representations, Warranties and Covenants. The Grantors jointly and severally represent, warrant and
covenant to and with the Collateral Agent, for the benefit of the Secured Parties, that: 
  
 (a) Schedule II correctly sets forth all debt securities and promissory notes required to be pledged as of the Second Amendment
Effective Date; 
  
 (b) any Pledged Security
entered into after the Second Amendment Effective Date in excess of $500,000 has been duly and validly authorized and issued by the issuer thereof and is a legal, valid and binding obligation of the issuer thereof; 
  
 (c) except for the security interests granted hereunder, each
of the Grantors (i) is and, subject to any transfers made in compliance with the Credit Agreement, will continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II as owned by such Grantor,
(ii) holds such Pledged Securities free and clear of all Liens, other than Liens created by this Agreement, Permitted Encumbrances and transfers made in compliance with the Credit Agreement, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than Liens created by this Agreement, other Liens permitted under Section 6.02 of the Credit Agreement,
including Permitted Encumbrances, and transfers made in compliance with the Credit Agreement, and (iv) will defend its title or interest thereto or therein against any and all Liens (other than the Lien created by this Agreement and other Liens
permitted under Section 6.02 of the Credit Agreement, including Permitted Encumbrances), however, arising, of all Persons whomsoever; 
  
 (d) except for restrictions and limitations imposed by the Loan Documents or securities laws generally, the Pledged Collateral is and will
continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any contractual restriction of any nature that might prohibit, impair, delay or otherwise affect the pledge of such Pledged Collateral
hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder; 
  
 (e) each of the Grantors has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated; 
  
 (f) no consent or approval of
any Governmental Authority, any securities exchange or any other Person was or is necessary to the validity of the pledge effected hereby (other than such as have been obtained and are in full force and effect); 
  

 6 

 (g) by virtue of the execution and delivery by the Grantors of this Agreement, when any
Pledged Securities are delivered to the Collateral Agent in accordance with this Agreement, the Collateral Agent will obtain a legal, valid and perfected first priority lien upon and security interest in such Pledged Securities as security for the
payment and performance of the Obligations; and 
  
 (h) the pledge effected hereby is effective to vest in the Collateral Agent, for the benefit of the Secured Parties, the rights of the Collateral Agent granted hereunder in the Pledged Collateral as set forth herein. 
  
 SECTION 2.04. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent. Each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered
in the name of such Grantor. 
  
 SECTION 2.05. Voting Rights;
Interest. (a) Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent shall have notified the Grantors that their rights under this Section 2.05 are being suspended: 
  
 (i) Each Grantor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the Credit Agreement and the other Loan Documents; provided that after
the occurrence of an Event of Default and during its continuance such rights and powers shall not be exercised in any manner that could reasonably be expected to materially and adversely affect the rights inuring to a holder of any Pledged
Securities or the rights and remedies of any of the Collateral Agent or the other Secured Parties under this Agreement or the Credit Agreement or any other Loan Document or the ability of the Secured Parties to exercise the same. 
  
 (ii) The Collateral Agent shall execute and deliver to each
Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual
rights and powers it is entitled to exercise pursuant to subparagraph (i) above. 
  
 (iii) Each Grantor shall be entitled to receive and retain any and all interest, principal and other distributions paid on or distributed
in respect of the Pledged Securities to the extent and only to the extent that such interest, principal and other distributions are paid or distributed in accordance with, the terms and conditions of the Credit Agreement, the other Loan Documents
and applicable laws; provided that any noncash interest, principal or other noncash distributions that would constitute Pledged Securities, whether received in exchange for Pledged Securities, any part thereof, or in redemption thereof, or as
a result of any 

  

 7 

 
merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent and shall be
forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement). 
  
 (b) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified the Grantors of
the suspension of their rights under paragraph (a)(iii) of this Section 2.05, then all rights of any Grantor to interest, principal or other distributions that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of
this Section 2.05 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such interest, principal or other distributions. All
interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 2.05 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor
and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions
of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 4.02.
After all Events of Default have been cured or waived and the Borrower has delivered to the Collateral Agent a certificate to that effect, the Collateral Agent shall, promptly repay to each Grantor (without interest) all interest, principal or other
distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.05 and that remain in such account. 
  
 (c) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall
have notified the Grantors of the suspension of their rights under paragraph (a)(i) of this Section 2.05, then all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 2.05, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 2.05, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall
have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right from time to time following
and during the continuance of an Event of Default to permit the Grantors to exercise such rights. 
  

 8 

 (d) Any notice given by the Collateral Agent to the Grantors suspending their rights
under paragraph (a) of this Section 2.05 (i) may be given by facsimile if promptly confirmed in writing pursuant to the Credit Agreement, (ii) may be given to one or more of the Grantors at the same or different times and
(iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or
otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing. 
  
 ARTICLE III 
  
 Security Interests in Personal Property 
  
 SECTION 3.01. Security Interest. (a) As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor
hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security
interest (the “Security Interest”) in, all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the “Article 9 Collateral”): 
  
 (i) all Accounts; 
  
 (ii) all Chattel Paper; 
  
 (iii) all Deposit Accounts; 
  
 (iv) all Documents; 
  
 (v) all Equipment; 
  
 (vi) all General Intangibles; 
  
 (vii) all Instruments; 
  
 (viii) all Inventory; 
  
 (ix) all Investment Property; 
  
 (x) Letter-of-Credit rights; 
  
 (xi) Commercial Tort Claims as described in Schedule IV; 
  
 (xii) all books and records pertaining to the Article 9 Collateral; and 
  

 9 

 (xiii) to the extent not otherwise included, all Proceeds and products of any and all of
the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. 
  
 (b) Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction
any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) indicate the Collateral as “all assets” of such Grantor or words of similar
effect as being of an equal or lesser scope or with greater detail, and (ii) contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or
amendment, including (a) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor and (b) in the case of a financing statement filed as a fixture filing or
covering Article 9 Collateral constituting minerals or the like to be extracted or timber to be cut, a sufficient description of the real property to which such Article 9 Collateral relates. Each Grantor agrees to provide such information
to the Collateral Agent promptly upon request. 
  
 (c) Notwithstanding anything herein to the contrary, in no event shall the security interest granted hereunder attach to any contract or agreement to which a Grantor is a party or any of its rights or interests thereunder if and for so long
as the grant of such security interest shall constitute or result in (i) the unenforceability of any right of the Grantor therein or (ii) in a breach or termination pursuant to the terms of, or a default under, any such contract or
agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law or principles of equity), provided, however, that
such security interest shall attach immediately at such time as the condition causing such unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such contract or agreement that does not result in
any of the consequences specified in (i) or (ii) including, without limitation, any proceeds of such contract or agreement. 
  
 (d) Notwithstanding the foregoing, the Article 9 Collateral shall not include (a) any Pledged Collateral or (b) any Collateral
(as defined in the Collateral Agreement). 
  
 Each Grantor also
ratifies its authorization for the Collateral Agent to file in any relevant jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof. 
  
 The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office) such documents as may be necessary or advisable for the purpose of perfecting, 

  

 10 

 
confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of any Grantor, and naming any Grantor
or the Grantors as debtors and the Collateral Agent as secured party. 
  
 (e) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to
or arising out of the Article 9 Collateral. 
  
 SECTION 3.02.
Representations and Warranties. The Grantors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties that: 
  
 (a) Each Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the Collateral Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than any consent or approval that has been obtained. 
  
 (b) The Perfection Certificate delivered in connection with the Second Amendment has been duly prepared, completed and executed and the
information set forth therein, including the exact legal name of each Grantor, is correct and complete as of the Second Amendment Effective Date. The Uniform Commercial Code financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations prepared by the Collateral Agent based upon the information provided to the Collateral Agent in such Perfection Certificate for filing in each governmental, municipal or other office specified in part
2(c) of Schedule 1 to such Perfection Certificate (or specified by notice from the Borrower to the Collateral Agent after the Second Amendment Effective Date in the case of filings, recordings or registrations required by Section 5.03(a)
or 5.12 of the Credit Agreement), are all the filings, recordings and registrations (other than filings required to be made in the United States Patent and Trademark Office and the United States Copyright Office in order to perfect the Security
Interest in Article 9 Collateral consisting of United States Patents, Trademarks and Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and first priority perfected security interest
in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements. Each Grantor represents and warrants that a fully executed agreement in the form hereof and 

  

 11 

 
containing a description of all Article 9 Collateral consisting of Patents, Trademarks and Copyrights has been received and recorded with respect to
United States Patents and United States registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered Copyrights by the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, to protect the validity of and to establish a legal,
valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral consisting of Patents, Trademarks and Copyrights in which a security interest may be
perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is
necessary (other than such actions as are necessary to perfect the Security Interest with respect to any Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or registration or application for registration thereof) acquired or
developed after the date hereof). 
  
 (c) The
Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral securing the payment and performance of the Obligations, (ii) subject to the filings described in Section 3.02(b), a perfected
security interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code and (iii) a security interest that shall be perfected in all Article 9 Collateral in which a security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, within the three-month period (commencing as of the date hereof) pursuant to 35 U.S.C. § 261 or 15 U.S.C.
§ 1060 or the one month period (commencing as of the date hereof) pursuant to 17 U.S.C. § 205. The Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral, other than Permitted
Encumbrances that have priority as a matter of law and Liens expressly permitted to be prior to the Security Interest pursuant to clause (iii), (iv) or (v) of Section 6.02 of the Credit Agreement. 
  
 (d) The Article 9 Collateral is owned by the Grantors
free and clear of any Lien, except for Permitted Encumbrances and Liens expressly permitted pursuant to clause (iii), (iv) or (v) of Section 6.02 of the Credit Agreement. None of the Grantors has filed or consented to the filing of
(i) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any Collateral or any security
agreement or similar instrument covering any Article 9 

  

 12 

 
Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (iii) any assignment in which any Grantor assigns
any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for Permitted Encumbrances and Liens expressly permitted pursuant to clause (iii), (iv) or (v) of Section 6.02 of the Credit Agreement. 
  
 SECTION 3.03. Covenants. (a) Each Grantor agrees promptly to
notify the Collateral Agent in writing of any change (i) in its corporate name, (ii) in the location of its chief executive office, its principal place of business and national distribution centers, (iii) in its identity or type of
organization or corporate structure, (iv) in its Federal Taxpayer Identification Number or organizational identification number or (v) in its jurisdiction of organization. Each Grantor agrees to promptly provide the Collateral Agent with
certified organizational documents reflecting any of the changes described in the first sentence of this paragraph. Each Grantor agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority security interest in all the Article 9 Collateral.
Each Grantor agrees promptly to notify the Collateral Agent if any material portion of the Article 9 Collateral owned or held by such Grantor is damaged or destroyed. 
  
 (b) Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the
Article 9 Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged, but in any
event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Article 9 Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in form and detail satisfactory to the Collateral Agent showing the type and amount of any and all Article 9 Collateral. 
  
 (c) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to Section 5.01(a) of the Credit Agreement, the Borrower shall deliver to the Collateral Agent a certificate executed by a Financial Officer and the secretary or assistant secretary of the Borrower
(i) setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of such certificate or the date of the most recent certificate delivered pursuant
to this Section 3.03(c) and (ii) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, recordings and
registrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (a) of this Section 3.03 to the extent
necessary to protect and perfect 

  

 13 

 
the Security Interest for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period). Each certificate delivered pursuant to this Section 3.03(c) shall identify in the format of Schedule III all Patents, Trademarks and Copyrights of any Grantor in existence on the
date thereof and not then listed on such Schedules or previously so identified to the Collateral Agent. 
  
 (d) Each Grantor shall, at its own expense, take any and all actions necessary to defend title to the Article 9 Collateral against all Persons and to
defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 6.02 of the Credit Agreement. 
  
 (e) Each Grantor agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to assure, preserve, protect and perfect the Security Interest and the rights and
remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements (including fixture
filings) or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Article 9 Collateral shall be or become evidenced by any promissory note or other instrument (other than any
promissory note or other instrument made by any payor with an outstanding balance equal to or less than $100,000 until such time as the aggregate outstanding balance of all promissory notes and instruments made by such payor or any of its Affiliates
that are owed to the Borrower or any Subsidiary exceeds $500,000), such note or instrument shall be immediately pledged and delivered to the Collateral Agent, duly endorsed in a manner satisfactory to the Collateral Agent. 
  
 Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to supplement this Agreement by supplementing Schedule III or adding additional schedules hereto to specifically identify any asset or item that may constitute
Copyrights, Licenses, Patents or Trademarks; provided that any Grantor shall have the right, exercisable within 10 Business Days after it has been notified by the Collateral Agent of the specific identification of such Collateral, to
advise the Collateral Agent in writing of any inaccuracy of the representations and warranties made by such Grantor hereunder with respect to such Collateral. Each Grantor agrees that it will use its commercially reasonable efforts to take such
action as shall be necessary in order that all representations and warranties hereunder shall be true and correct with respect to such Collateral within 30 days after the date it has been notified by the Collateral Agent of the specific
identification of such Collateral. 
  
 (f) The Collateral Agent
and such Persons as the Collateral Agent may reasonably designate shall have the right, at the Grantors’ own cost and expense, to inspect, after reasonable prior notice and during normal business hours, the Article 9 Collateral, all
records related thereto (and to make extracts and copies from such records) 

  

 14 

 
and the premises upon which any of the Article 9 Collateral is located, to discuss the Grantors’ affairs with the officers of the Grantors and
their independent accountants and to verify under reasonable procedures, in accordance with Sections 5.03 and 5.08 of the Credit Agreement, the validity, amount, quality, quantity, value, condition and status of, or any other matter relating
to, the Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Article 9 Collateral for the purpose of
making such a verification. The Collateral Agent shall have the absolute right to share any information it gains from such inspection or verification with any Secured Party. 
  
 (g) At its option, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the Article 9 Collateral and not permitted pursuant to Section 6.02 of the Credit Agreement, and may pay for the maintenance and preservation of the Article 9 Collateral to the
extent any Grantor fails to do so as required by the Credit Agreement or this Agreement, and each Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent
pursuant to the foregoing authorization; provided that nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform,
any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents. 
  
 (h) If at any time any Grantor shall take a security interest in any property
of an Account Debtor or any other Person to secure payment and performance of an Account, such Grantor shall promptly assign such security interest to the Collateral Agent. Such assignment need not be filed of public record unless necessary to
continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other Person granting the security interest. 
  
 (i) Each Grantor shall remain liable to observe and perform all the conditions and obligations to be observed and performed
by it under each contract, agreement or instrument relating to the Article 9 Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent
and the Secured Parties from and against any and all liability for such performance. 
  
 (j) None of the Grantors shall make or permit to be made an assignment, pledge or hypothecation of the Article 9 Collateral or shall grant any other Lien in respect of the Article 9 Collateral, except as
permitted by the Credit Agreement. None of the Grantors shall make or permit to be made any transfer of the Article 9 Collateral and each Grantor shall remain at all times in possession of the Article 9 Collateral owned by it (other than
Inventory held by customers or in transit or otherwise not in its possession, in each case in its ordinary course of business consistent with past practice), except that unless and until the Collateral Agent shall notify the Grantors (i) that
an Event of Default shall have occurred and be continuing and (ii) that during the continuance thereof the 

  

 15 

 
Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of any Article 9 Collateral (which notice may be given by telephone if
promptly confirmed in writing), the Grantors may use and dispose of the Article 9 Collateral in any lawful manner not inconsistent with the provisions of this Agreement, the Credit Agreement or any other Loan Document. 
  
 (k) None of the Grantors will, without the Collateral Agent’s prior
written consent, grant any extension of the time of payment of any Accounts included in the Article 9 Collateral, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any Person liable for
the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, compromises, settlements, releases, credits or discounts granted or made in the ordinary course of business and consistent with its current practices and
in accordance with such prudent and standard practice used in industries that are the same as or similar to those in which such Grantor is engaged. 
  
 (l) The Grantors, at their own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment
in accordance with the requirements set forth in Schedule V hereto and Section 5.07 of the Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by
the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Article 9 Collateral under policies
of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any
Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or
liability of the Grantors hereunder or any Event of Default, in its sole discretion, after 3 days notice to such Grantor, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the
Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this paragraph, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by
the Grantors to the Collateral Agent and shall be additional Obligations secured hereby. 
  
 (m) Each Grantor shall maintain, in form and manner reasonably satisfactory to the Collateral Agent, records of its Chattel Paper and its books, records and documents evidencing or pertaining thereto. 
  
 (n) The Borrower shall use commercially reasonable efforts to cause the four
copyrights listed on Schedule III as owned of record by Blockbuster Entertainment Corporation to promptly become owned of record by one of the Grantors. 
  
 SECTION 3.04. Other Actions. In order to further insure the attachment, perfection and priority of, and the ability of the Collateral Agent to
enforce, the Security 

  

 16 

 
Interest, each Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with respect to the following Article 9
Collateral: 
  
 (a) Instruments. If any
Grantor shall at any time hold or acquire any Instruments (other than any Instrument made by any payor with an outstanding balance equal to or less than $100,000 until such time as the aggregate outstanding balance of all Instruments made by such
payor or any of its Affiliates that are owed to the Borrower or any Subsidiary exceeds $500,000), such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Collateral Agent may from time to time reasonably request. 
  
 (b) Investment Property. Except to the extent otherwise provided in Article III, if any Grantor shall at any time hold or
acquire any certificated securities, such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to
time specify. If any securities now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, such Grantor shall immediately notify the Collateral Agent thereof and, at the
Collateral Agent’s request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Collateral Agent as to such
securities, without further consent of any Grantor or such nominee or (ii) arrange for the Collateral Agent to become the registered owner of the securities. If any securities, whether certificated or uncertificated, or other investment
property now or hereafter acquired by any Grantor are held by such Grantor or its nominee through a securities intermediary or commodity intermediary, such Grantor shall immediately notify the Collateral Agent thereof and, at the Collateral
Agent’s request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) cause such securities intermediary or (as the case may be) commodity intermediary to agree to comply
with entitlement orders or other instructions from the Collateral Agent to such securities intermediary as to such security entitlements, or (as the case may be) to apply any value distributed on account of any commodity contract as directed by the
Collateral Agent to such commodity intermediary, in each case without further consent of any Grantor or such nominee or (ii) in the case of Financial Assets or other Investment Property held through a securities intermediary, arrange for the
Collateral Agent to become the entitlement holder with respect to such investment property, with the Grantor being permitted, only with the consent of the Collateral Agent, to exercise rights to withdraw or otherwise deal with such investment
property. The Collateral Agent agrees with each of the Grantors that the Collateral Agent shall not give any such entitlement orders or instructions or directions to any such issuer, securities intermediary or commodity intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing rights by any Grantor, unless an Event of Default has occurred and is continuing, or, after giving effect to any such investment and withdrawal rights would occur. 

  

 17 

 
The provisions of this paragraph shall not apply to any Financial Assets credited to a securities account for which the Collateral Agent is the securities
intermediary. 
  
 (c) Letter-of-Credit
Rights. If any Grantor is at any time a beneficiary under a letter of credit with a face value of $100,000 or more now or hereafter issued in favor of such Grantor, such Grantor shall promptly notify the Collateral Agent thereof and, at the
request and option of the Collateral Agent, such Grantor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) arrange for the issuer and any confirmer of such letter of credit to
consent to an assignment to the Collateral Agent of the proceeds of any drawing under the letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to the applicable Grantor unless an Event of Default has occurred or is continuing. 
  
 (d) Commercial Tort Claims. If any Grantor shall at any time hold or acquire a commercial tort
claim in an amount reasonably estimated to exceed $1,000,000, the Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor including a summary description of such claim and grant to the Collateral Agent in such
writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral Agent. 
  
 SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not, do any act or omit do to any act (and will exercise commercially reasonable efforts to prevent its licensees from doing any act or omitting to do any act) whereby any Patent that is
material to the conduct of such Grantor’s business may become invalidated or dedicated to the public, and agrees that it shall continue to mark any products covered by a Patent with the relevant patent number as necessary and sufficient to
establish and preserve its maximum rights under applicable patent laws. 
  
 (b) Each Grantor (either itself or through its licensees or its sublicensees) will, for each Trademark material to the conduct of such Grantor’s business, (i) maintain such Trademark in full force free from
any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) display such Trademark with notice of Federal or foreign registration to the extent necessary and
sufficient to establish and preserve its maximum rights under applicable law and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights. 
  
 (c) Each Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a material Copyright, continue to publish, reproduce, display, adopt and distribute the work with appropriate 

  

 18 

 
copyright notice as necessary and sufficient to establish and preserve its maximum rights under applicable copyright laws. 
  
 (d) Each Grantor shall notify the Collateral Agent promptly
if it knows or has reason to know that any Patent, Trademark or Copyright material to the conduct of its business may become abandoned, lost or dedicated to the public, or of any materially adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office) regarding such Grantor’s ownership of any Patent, Trademark or Copyright material to
the conduct of its business, its right to register the same, or its right to keep and maintain the same. 
  
 (e) If any Grantor, either itself or through any agent, employee, licensee or designee, files an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States, it shall promptly inform
the Collateral Agent, and, upon request of the Collateral Agent, execute and deliver any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s security interest
in such Patent, Trademark or Copyright, and each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to execute and file such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; such
power, being coupled with an interest, is irrevocable. 
  
 (f) Each Grantor will take all necessary steps that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision
of the United States, to maintain and pursue each material application relating to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or registration) and to maintain each issued Patent and each registration of the
Trademarks and Copyrights that is material to the conduct of any Grantor’s business, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if consistent
with good business judgment, to initiate opposition, interference and cancellation proceedings against third parties. 
  
 (g) In the event that any Grantor initiates, or engages counsel in connection with, litigation or arbitration regarding any Article 9
Collateral consisting of a Patent, Trademark or Copyright material to the conduct of any Grantor’s business, such Grantor shall promptly notify the Collateral Agent. Each Grantor shall, if consistent with good business judgment, promptly sue
for infringement, misappropriation or dilution and to recover 

  

 19 

 
any and all damages for such infringement, misappropriation or dilution, and take such other actions as are appropriate under the circumstances to protect
such Article 9 Collateral. 
  
 (h) Upon and during the
continuance of an Event of Default, each Grantor shall use its commercially reasonable efforts to obtain all requisite consents or approvals by the licensor of each Copyright License, Patent License or Trademark License to effect the assignment of
all such Grantor’s right, title and interest thereunder to the Collateral Agent or its designee. 
  
 ARTICLE IV 
  
 Remedies 
  
 SECTION 4.01. Remedies Upon Default.
Upon the occurrence and during the continuance of an Event of Default, each Grantor agrees to deliver each item of Collateral to the Collateral Agent on demand, and it is agreed that the Collateral Agent shall have the right to take any of or all
the following actions at the same or different times: (a) with respect to any Article 9 Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or
all such Article 9 Collateral by the applicable Grantors to the Collateral Agent, or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Collateral Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot be obtained), and (b) with or without legal
process and with or without prior notice or demand for performance, to take possession of the Article 9 Collateral and without liability for trespass to enter any premises where the Article 9 Collateral may be located for the purpose of taking
possession of or removing the Article 9 Collateral and, generally, to exercise any and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, each Grantor
agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral at a 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 Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at any such sale of securities (if it deems it advisable to do so) to restrict the prospective
bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral 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 Collateral
Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any sale of Collateral shall hold the property sold absolutely, free from any claim or right on the part
of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption and stay which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.

  

 20 

 The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each
Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral. Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case of a 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 Collateral, 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 Collateral Agent may fix and state in the notice
(if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent
shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral 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 any
sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall
not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent
permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all such rights
being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes hereof, a binding written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any
portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Obligations paid in full. As an alternative to exercising the
power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts
having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 4.01 shall be deemed to conform to the commercially reasonable standards as provided in
Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions. 
  

 21 

 SECTION 4.02. Application of Proceeds. The Collateral Agent shall apply the proceeds of any
collection or sale of Collateral, including any Collateral consisting of cash, as follows: 
  
 First, to the payment of all costs and expenses incurred by the Collateral Agent in connection with such collection or sale or otherwise in connection with this Agreement, any other Loan Document or any of the
Obligations, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under any other Loan Document on behalf of any Grantor and any other costs or
expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document; 
  
 Second, to the payment in full of the Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with
the amounts of the Obligations owed to them on the date of any such distribution); and 
  
 Third, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct. 
  
 The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any
sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for
the misapplication thereof. 
  
 SECTION 4.03. Grant of License
to Use Intellectual Property. For the sole purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each
Grantor hereby grants to the Collateral Agent an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantors) to use, license or sublicense (subject to, in all cases, the rights of all existing and
future licensees and sublicensees under any Licenses) any of the Article 9 Collateral consisting of Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license
reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Collateral Agent may be exercised, at
the option of the Collateral Agent, upon the occurrence and during the continuation of an Event of Default; provided that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be
binding upon the Grantors notwithstanding any subsequent cure of an Event of Default. 
  

 22 

 SECTION 4.04. Securities Act. In view of the position of the Grantors in relation to the
Pledged Collateral, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, 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 called the “Federal Securities Laws”) with respect to any disposition of the Pledged Collateral permitted hereunder. Each Grantor understands that compliance with the Federal
Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which
any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under
applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment, and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees
that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or
part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a single potential purchaser to effect such sale. Each Grantor acknowledges and agrees that any such sale might result in prices and
other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged
Collateral at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale
were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section 4.04 will apply notwithstanding the existence of a public or private market upon which the quotations or
sales prices may exceed substantially the price at which the Collateral Agent sells. 
  
 ARTICLE V 
  
 Indemnity,
Subrogation and Subordination 
  
 SECTION 5.01. Indemnity and
Subrogation. The Borrower agrees that in the event any assets of any Grantor shall be sold pursuant to this Agreement or any other Security Document to satisfy in whole or in part an obligation owed to any Secured Party, the Borrower shall
indemnify such Grantor in an amount equal to the greater of the book value or the fair market value of the assets so sold. 
  
 SECTION 5.02. Contribution and Subrogation. Each Grantor (a “Contributing Party”) agrees (subject to Section 5.03) that, in
the event assets of any other Grantor shall be sold pursuant to any Security Document to satisfy any Obligation 

  

 23 

 
owed to any Secured Party and such other Grantor (the “Claiming Party”) shall not have been fully indemnified by the Borrower as provided in
Section 5.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a
fraction of which the numerator shall be the net worth of the Contributing Party on the date hereof and the denominator shall be the aggregate net worth of all the Grantors on the date hereof (or, in the case of any Grantor becoming a party hereto
pursuant to Section 6.14, the date of the supplement hereto executed and delivered by such Grantor). Any Contributing Party making any payment to a Claiming Party pursuant to this Section 5.02 shall be subrogated to the rights of such
Claiming Party under Section 5.01 to the extent of such payment. 
  
 SECTION 5.03. Subordination. (a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Grantors under Sections 5.01 and 5.02 and all other rights of indemnity, contribution or subrogation under
applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of the Obligations. No failure on the part of the Borrower or any Grantor to make the payments required by Sections 5.01 and 5.02 (or any other
payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Grantor with respect to its obligations hereunder, and each Grantor shall remain liable for the full amount of the obligations of
such Grantor hereunder. 
  
 (b) Each Grantor
hereby agrees that all Indebtedness and other monetary obligations owed by it to any other Grantor or any other Subsidiary shall be fully subordinated to the indefeasible payment in full in cash of the Obligations. 
  
 ARTICLE VI 
  
 Miscellaneous 
  
 SECTION 6.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices hereunder to any Subsidiary Party shall be given to it in care of the Borrower as provided in Section 9.01 of the Credit Agreement. 
  
 SECTION 6.02. Waivers; Amendment. (a) No failure or delay by the
Collateral Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent, the Issuing Bank and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same 

  

 24 

 
shall be permitted by paragraph (b) of this Section 6.02, and then such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Collateral Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time. No notice or demand on any Loan Party in any case shall entitle any Loan Party to any other or further notice or demand in similar or other circumstances. 
  
 (b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Loan Party or Loan Parties with respect to which such waiver, amendment or modification is to apply, subject to any
consent required in accordance with Section 9.02 of the Credit Agreement. 
  
 SECTION 6.03. Collateral Agent’s Fees and Expenses; Indemnification. (a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its reasonable expenses incurred
hereunder as provided in Section 9.03 of the Credit Agreement. 
  
 (b) Without limitation of its indemnification obligations under the other Loan Documents, each Grantor and each Guarantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees (as
defined in Section 9.03 of the Credit Agreement) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of, the execution, delivery or performance of this Agreement or any claim, litigation, investigation or proceeding relating to any of the
foregoing agreement or instrument contemplated hereby, or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee. 
  
 (c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The provisions of this Section 6.03 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the
Collateral Agent or any other 

  

 25 

 
Secured Party. All amounts due under this Section 6.03 shall be payable on written demand therefor. 
  
 SECTION 6.04. Successors and Assigns. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Guarantor, Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. 
  
 SECTION 6.05. Survival of Agreement. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and
in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and shall survive the execution and delivery of
the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any Lender or on its behalf and notwithstanding that the Collateral Agent, the Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended under the Credit Agreement, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under any Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. 
  
 SECTION 6.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement. This Agreement shall become effective as to any Loan Party when a counterpart hereof executed on behalf of such Loan Party shall have been delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Loan Party and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Loan Party, the Collateral Agent
and the other Secured Parties and their respective successors and assigns, except that no Loan Party shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment
or transfer shall be void) except as expressly contemplated by this Agreement or the Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each Loan Party and may be amended, modified, supplemented, waived or
released with respect to any Loan Party without the approval of any other Loan Party and without affecting the obligations of any other Loan Party hereunder. 
  
 SECTION 6.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the 

  

 26 

 
invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. 
  
 SECTION 6.08. Right of Set-Off. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any Subsidiary Party against any of and all the obligations of such Subsidiary Party now or hereafter
existing under this agreement owed to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section 6.08 are
in addition to other rights and remedies (including other rights of set-off) which such Lender may have. 
  
 SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York. 
  
 (b) Each of the Loan Parties hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Loan Document shall affect any right that the Collateral Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Grantor or
Guarantor, or its properties in the courts of any jurisdiction. 
  
 (c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section 6.09. Each of the parties hereto hereby irrevocably waives, to the 

  

 27 

 
fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 
  
 (d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 6.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. 

 
 SECTION 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.

  
 SECTION 6.11. Headings. Article and Section headings
and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. 
  
 SECTION 6.12. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of
the Credit Agreement, any other Loan Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Obligations or this Agreement. 
  
 SECTION 6.13. Termination or Release. (a) This Agreement, the Security Interest and all other security interests granted hereby shall
terminate when all the Loan Document Obligations have been indefeasibly paid in full and the Lenders have 

  

 28 

 
no further commitment to lend under the Credit Agreement, the LC Exposure has been reduced to zero and the Issuing Bank has no further obligations to issue
Letters of Credit under the Credit Agreement. 
  
 (b) A Subsidiary Party shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Subsidiary Party shall be automatically released upon the consummation of any transaction permitted by
the Credit Agreement as a result of which such Subsidiary Party ceases to be a Subsidiary of the Borrower; provided that the Required Lenders shall have consented to such transaction (to the extent required by the Credit Agreement) and the
terms of such consent did not provide otherwise. 
  
 (c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted under the Credit Agreement, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral
pursuant to Section 9.02 of the Credit Agreement, the security interest in such Collateral shall be automatically released. 
  
 (d) In connection with any termination or release pursuant to paragraph (a), (b) or (c), the Collateral Agent shall execute and
deliver to any Grantor, at such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 6.13 shall be without
recourse to or warranty by the Collateral Agent. 
  
 SECTION 6.14.
Additional Subsidiaries. Pursuant to Section 5.11 of the Credit Agreement, each Subsidiary Loan Party that was not in existence or not a Subsidiary Loan Party on the Second Amendment Effective Date is required to enter in this Agreement
as a Subsidiary Party upon becoming a Subsidiary Loan Party. Upon execution and delivery by the Collateral Agent and a Subsidiary Loan Party of an instrument in the form of Exhibit I hereto, such Subsidiary Loan Party shall become a Subsidiary
Party hereunder with the same force and effect as if originally named as a Subsidiary Party herein. The execution and delivery of any such instrument shall not require the consent of any other Loan Party hereunder. The rights and obligations of each
Loan Party hereunder shall remain in full force and effect notwithstanding the addition of any new Loan Party as a party to this Agreement. 
  
 SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such Grantor
for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and
coupled with an interest. Without limiting the generality of the foregoing, the Collateral Agent shall have the right, solely upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the
Collateral Agent’s name or in the name of 

  

 29 

 
such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment
relating to the Collateral or any part thereof, (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral, (c) to sign the name of any Grantor on any invoice or bill of
lading relating to any of the Collateral, (d) to send verifications of Accounts Receivable to any Account Debtor, (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral, (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any
of the Collateral, (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal
with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes;
provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to
present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence, bad faith or willful misconduct. 
  

 30 

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

			
	 BLOCKBUSTER INC.,

		
	 by
	 	 /s/    Mary Bell

	 	 	 Name: Mary Bell

	 	 	 Title: Senior Vice President, Investor Relations and Corporate Treasurer

	
	EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO,
		
	 by
	 	 /s/    Mary Bell

	 	 	 Name: Mary Bell

	 	 	 Title: Senior Vice President, Investor Relations and Corporate Treasurer
of each of the foregoing
Subsidiary
Parties

	
	JPMORGAN CHASE BANK, N.A., AS COLLATERAL AGENT,
		
	 by
	 	 /s/    Barry Bergman

	 	 	 Name: Barry Bergman

	 	 	 Title: Managing Director

 Schedule I to 
 the Security Agreement 
  
 SUBSIDIARY PARTIES 
  

			
		
	1.	    	 Blockbuster Canada Inc.

		
	2.	    	 Blockbuster Distribution, Inc.

		
	3.	    	 Blockbuster Global Services Inc.

		
	4.	    	 Blockbuster International Spain Inc.

		
	5.	    	 Blockbuster Investments LLC

		
	6.	    	 Blockbuster Limited Partner Holdings LLC

		
	7.	    	 Blockbuster Procurement LP

		
	8.	    	 Blockbuster Texas LP

		
	9.	    	 Blockbuster Video Italy, Inc.

		
	10.	    	 D.E.J. Productions Inc.

		
	11.	    	 Game Brands Inc.

		
	12.	    	 Movie Brands Inc.

		
	13.	    	 Trading Zone Inc.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]