UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
WASHINGTON, DC 20549

 
FORM 8-K

 
CURRENT REPORT
 
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 

October 18, 2011
(Date of earliest event reported)

Cinedigm Digital Cinema Corp.
(Exact name of registrant as specified in its charter)


Delaware
001-31810
22-3720962
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)


55 Madison Avenue, Suite 300, Morristown, New Jersey
07960
(Address of principal executive offices)
(Zip Code)


973-290-0080
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

¨          Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨          Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨          Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨          Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 



 
 
 

 


Item 1.01.
Entry into a Material Definitive Agreement.

On October 18, 2011, Cinedigm Digital Funding 2, LLC (“CDF 2”), an indirectly wholly-owned, special purpose subsidiary of Cinedigm Digital Cinema Corp. (the "Company"), entered into a definitive credit agreement (the “2011 Credit Agreement”) with Société Générale, New York Branch, as administrative agent (the “Administrative Agent”) and collateral agent (the “Collateral Agent”), Natixis New York Branch, as Syndication Agent, ING Capital LLC, as documentation agent, and the lenders party thereto.  CDF 2 may borrow up to $77.5 million  under the 2011 Credit Agreement, consisting of revolving loans of up to $2.5 million at any one time outstanding and term loans of up to $75 million.

In addition, up to $23.0 million of financing is available under a Sale and Leaseback Agreement dated as of October 18, 2011 (the “Sale and Leaseback Agreement”) between CHG-MERIDIAN US Finance, Ltd. (“CHG”) and CDF2 Holdings, LLC, an indirectly wholly-owned, special purpose subsidiary of the Company that holds all of the equity of CDF 2 (“Holdings”), and two Master Equipment Leases, dated as of October 18, 2011, between Holdings and CHG (the “Leases”).

The 2011 Credit Agreement, the Sale and Leaseback Agreement and the Leases provide for a total of up to $100.5 million in financing.  In connection with the financing and to set forth the priority of payment obligations and liens under the 2011 Credit Agreement, the Sale and Leaseback Agreement, the Leases and certain other obligations to the Company and certain vendors, CDF 2, Holdings, the Administrative Agent, the Collateral Agent, CHG, Access Digital Cinema Phase 2, Corp., a wholly-owned subsidiary of the Company that holds all of the equity of Holdings (“ADCP 2”), the Company and Ballantyne Strong, Inc., as an approved vendor, entered into a Multiparty Agreement, dated as of October 18, 2011.  There is no recourse to the Company for the obligations of CDF 2 and Holdings under the 2011 Credit Agreement, the Sale and Leaseback Agreement and the Leases.

The proceeds of the revolving loans under the 2011 Credit Agreement will be used to pay all costs, fees and expenses relating to the transaction and for working capital.  The proceeds of the term loans will be used, together with the proceeds from the Sale and Leaseback Agreement to finance part of the purchase price for digital cinema projection systems to be deployed by CDF 2 and Holdings in theatres in the United States (the “Equipment”).   The deployment will generate virtual print fees and other payments under certain digital cinema deployment agreements with major motion picture distributors.  The rights to receive such virtual print fees and payments to the extent they are generated by the Equipment being financed were transferred to CDF 2 pursuant to the Sale and Contribution Agreement, dated as of October 18, 2011, among the Company, ADCP 2, Holdings and CDF 2 (the “Sale and Contribution Agreement”), and will be the sources of repayment of the financing provided by the 2011 Credit Agreement, the Sale and Leaseback Agreement and the Leases.

Under the 2011 Credit Agreement, each of the Loans will bear interest, at the option of CDF 2 and subject to certain conditions, based on the base rate (generally, the bank prime rate) plus a margin of 3.50% or LIBOR, plus a margin of 4.50%.  The Loans mature and must be paid in full by October 15, 2017.  In addition, CDF 2 may prepay the Loans, without premium or penalty, in whole or in part, subject to paying certain breakage costs, if applicable.

The 2011 Credit Agreement also required CDF 2 and each of CDF 2’s existing and future direct and indirect subsidiaries (the "Guarantors") to guarantee the obligations under the 2011 Credit Agreement, pursuant to the Guaranty and Security Agreement, dated as of October 18, 2011, by and among CDF 2, the Guarantors and the Collateral Agent (the “Guaranty and Security Agreement”), and all such obligations are secured by a perfected security interest in all of the collective assets of CDF 2 and the Guarantors, including real estate owned or leased, and all capital stock or other equity interests in CDF 2

 
2

 

and CDF 2’s subsidiaries.   Additionally, the 2011 Credit Agreement required Holdings to enter into a Security Agreement, dated as of October 18, 2011, among Holdings, each grantor from time to time party thereto and the Collateral Agent (the “Holdings Security Agreement”) pursuant to which Holdings granted a perfected security interest in all equipment and inventory consisting of Equipment.  Furthermore, in connection with the 2011 Credit Agreement, ADCP 2 entered into a pledge agreement dated as of October 18, 2011 in favor of the Collateral Agent (the “ADCP 2 Pledge Agreement”) pursuant to which ADCP 2 pledged to the Collateral Agent all of the outstanding membership interests of Holdings, and Holdings entered into a pledge agreement dated as of October 18, 2011 in favor of the Collateral Agent (the “Holdings Pledge Agreement”) pursuant to which Holdings pledged to the Collateral Agent all of the outstanding membership interests of CDF 2.  The Multiparty Agreement also requires Holdings and certain of its existing future direct and indirect subsidiaries to enter into a Security Agreement, dated as of October 18, 2011, by and among Holdings, each of the other entities that becomes a party thereto and the Collateral Agent for CHG pursuant to which Holdings granted a perfected security interest in all of the collective assets of Holdings and each of its existing and future direct and indirect subsidiaries, other than CDF 2 and its subsidiaries.

The Leases provide for Holdings to make rental payments, commencing November 18, 2011 to January 18, 2013 at $216,300 per month, including pro-rated rent for any partial month, and thereafter, from February 18, 2013 to April 18, 2017, at $482,040.  Payments are made quarterly for the term of the Leases.  The initial term of the Leases is 66 months.  At the expiration of the initial term of the Leases, the term of the Leases will automatically renew for a mandatory renewal term equal to six months, at a rental rate equal to the rental rate during the initial term, unless Holdings terminates the Leases.  Holdings may terminate the Leases at the end of any full month after the expiration of the initial term or any mandatory renewal term by giving CHG (i) in the event Holdings elects to return the Equipment, 180 days prior written notice, and (ii) in the event Holdings elects to renew the Leases or to negotiate for the purchase of the Equipment from CHG, 60 days prior written notice.  If Holdings does not give such written notice, or if Holdings negotiates for the purchase of the Equipment from CHG but such purchase is not closed, the mandatory renewal term will be automatically extended thereafter on a month-to-month basis at the same monthly rent, until terminated by CHG or Holdings giving notice.  Provided no event of default has occurred and is continuing under the Leases, Holdings (or its permitted assignees) will have the option to either: (a) negotiate with CHG for the purchase of the Equipment from CHG; or (b) renew the term of the Leases at the expiration of any mandatory renewal term, for a fixed renewal term of at least 42 months, or such shorter period as may be agreed upon, at a rental rate equal to the rental rate during the initial term.

The 2011 Credit Agreement and the Leases contain customary representations, warranties, affirmative covenants, negative covenants and events of default, as well as conditions to borrowings and the sale and leaseback of Equipment.

The foregoing descriptions of the Guaranty and Security Agreement, the CHG Security Agreement, the Holdings Security Agreement, the Lease Facility Security Agreement, the Phase 2 Pledge Agreement, the Holdings Pledge Agreement, the 2011 Credit Agreement, the Multiparty Agreement, the Leases, the Sale and Leaseback Agreement and the Sale and Contribution Agreement do not purport to be complete and are qualified in their entirety by reference to such agreements, which are attached hereto as Exhibits 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 10.1, 10.2, 10.3, 10.4, 10.5, and 10.6, respectively, and are incorporated by reference herein.

Item 8.01
Other Events.

On October 20, 2011, the Company issued the press release attached hereto as Exhibit 99.1 and incorporated by reference herein.

 
3

 


Item 9.01
Financial Statements and Exhibits

Exhibit No.
 
Description
     
4.1
 
--
 
Guaranty and Security Agreement, dated as of October 18, 2011, among Cinedigm Digital Funding 2, LLC, each Grantor from time to time party thereto and Société Générale, New York Branch, as Collateral Agent.
 
4.2
 
--
 
Security Agreement, dated as of October 18, 2011, between CHG-MERIDIAN U.S. Finance, Ltd. and Société Générale, New York Branch, as Collateral Agent.
 
4.3
 
--
 
Security Agreement, dated as of October 18, 2011, among CDF2 Holdings, LLC and each Grantor from time to time party thereto and Société Générale, New York Branch, as Collateral Agent for the Lenders and each other Secured Party.
 
4.4
 
--
 
Security Agreement, dated as of October 18, 2011, among CDF2 Holdings, LLC and each Grantor from time to time party thereto and Société Générale, New York Branch, as Collateral Agent for CHG-Meridian U.S. Finance, Ltd. and any other CHG Lease Participants.
 
4.5
 
--
 
Pledge Agreement, dated as of October 18, 2011, between Access Digital Cinema Phase 2 Corp. and Société Générale, as Collateral Agent.
 
4.6
 
--
Pledge Agreement, dated as of October 18, 2011, between CDF2 Holdings, LLC and Société Générale, as Collateral Agent.
 
10.1
 
--
 
Credit Agreement, dated as of October 18, 2011, among Cinedigm Digital Funding 2, LLC, as the Borrower, Société Générale, New York Branch, as Administrative Agent and Collateral Agent, Natixis New York Branch, as Syndication Agent and the Lenders party thereto.
 
10.2
--
Multiparty Agreement, dated as of October 18, 2011, among Cinedigm Digital Funding 2, LLC, as Borrower, Access Digital Cinema Phase 2, Corp., CDF2 Holdings, LLC, Cinedigm Digital Cinema Corp., CHG-MERIDIAN U.S. Finance, Ltd., Société Générale, New York Branch, as Senior Agent and Ballantyne Strong, Inc., as Approved Vendor.
 
10.3
--
Master Equipment Lease No. 8463, effective as of October 18, 2011, by and between CHG- MERIDIAN U.S. Finance, Ltd. and CDF2 Holdings, LLC.
 
10.4
--
Master Equipment Lease No. 8465, effective as of October 18, 2011, by and between CHG-MERIDIAN U.S. Finance, Ltd. and CDF2 Holdings, LLC.
 
10.5
--
Sale and Leaseback Agreement, dated as of October 18, 2011, by and between CDF2 Holdings, LLC and CHG-MERIDIAN U.S. Finance, Ltd.
 

 
4

 

Exhibit No.
 
Description
     
10.6
--
Sale and Contribution Agreement, dated as of October 18, 2011, among Cinedigm Digital Cinema Corp., Access Digital Cinema Phase 2, Corp., CDF2 Holdings, LLC and Cinedigm Digital Funding 2, LLC.
 
99.1
--
Press Release dated October 20, 2011.
 


 
5

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

     
CINEDIGM DIGITAL CINEMA CORP.
 
Dated:  October 24, 2011
 
By: 
 
 
 
/s/ Gary S. Loffredo
       
Gary S. Loffredo
Senior Vice President – Business Affairs, General Counsel and Secretary



 
6

 

EXHIBIT INDEX

Exhibit No.
 
Description
     
4.1
 
--
 
Guaranty and Security Agreement, dated as of October 18, 2011, among Cinedigm Digital Funding 2, LLC, each Grantor from time to time party thereto and Société Générale, New York Branch, as Collateral Agent.
 
4.2
 
--
 
Security Agreement, dated as of October 18, 2011, between CHG-MERIDIAN U.S. Finance, Ltd. and Société Générale, New York Branch, as Collateral Agent.
 
4.3
 
--
 
Security Agreement, dated as of October 18, 2011, among CDF2 Holdings, LLC and each Grantor from time to time party thereto and Société Générale, New York Branch, as Collateral Agent for the Lenders and each other Secured Party.
 
4.4
 
--
 
Security Agreement, dated as of October 18, 2011, among CDF2 Holdings, LLC and each Grantor from time to time party thereto and Société Générale, New York Branch, as Collateral Agent for CHG-Meridian U.S. Finance, Ltd. and any other CHG Lease Participants.
 
4.5
 
--
 
Pledge Agreement, dated as of October 18, 2011, between Access Digital Cinema Phase 2 Corp. and Société Générale, as Collateral Agent.
 
4.6
 
--
Pledge Agreement, dated as of October 18, 2011, between CDF2 Holdings, LLC and Société Générale, as Collateral Agent.
 
10.1
 
--
 
Credit Agreement, dated as of October 18, 2011, among Cinedigm Digital Funding 2, LLC, as the Borrower, Société Générale, New York Branch, as Administrative Agent and Collateral Agent, Natixis New York Branch, as Syndication Agent and the Lenders party thereto.
 
10.2
--
Multiparty Agreement, dated as of October 18, 2011, among Cinedigm Digital Funding 2, LLC, as Borrower, Access Digital Cinema Phase 2, Corp., CDF2 Holdings, LLC, Cinedigm Digital Cinema Corp., CHG-MERIDIAN U.S. Finance, Ltd., Société Générale, New York Branch, as Senior Agent and Ballantyne Strong, Inc., as Approved Vendor.
 
10.3
--
Master Equipment Lease No. 8463, effective as of October 18, 2011, by and between CHG- MERIDIAN U.S. Finance, Ltd. and CDF2 Holdings, LLC.
 
10.4
--
Master Equipment Lease No. 8465, effective as of October 18, 2011, by and between CHG-MERIDIAN U.S. Finance, Ltd. and CDF2 Holdings, LLC.
 
10.5
--
Sale and Leaseback Agreement, dated as of October 18, 2011, by and between CDF2 Holdings, LLC and CHG-MERIDIAN U.S. Finance, Ltd.
 
10.6
--
Sale and Contribution Agreement, dated as of October 18, 2011, among Cinedigm Digital Cinema Corp., Access Digital Cinema Phase 2, Corp., CDF2 Holdings, LLC and Cinedigm Digital Funding 2, LLC.
 
99.1
--
Press Release dated October 20, 2011.
 

 
7

 

EXHIBIT 4.1
 
 
 
 
 
 
 
 
 
 
EXECUTION VERSION
 
 



 
GUARANTY AND SECURITY AGREEMENT
 
DATED AS OF OCTOBER 18, 2011
 
AMONG
 
CINEDIGM DIGITAL FUNDING 2, LLC ,
 
AND
 
EACH GRANTOR
 
FROM TIME TO TIME PARTY HERETO
 
AND
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
AS COLLATERAL AGENT

 



 

 
 
 

 
ARTICLE 1
 
DEFINED TERMS
 
 
Section 1.1
 
Definitions
 
 
Section 1.2
 
Certain Other Terms
 
 
ARTICLE 2
 
GUARANTY
 
 
Section 2.1
 
Guaranty
 
 
Section 2.2
 
Limitation of Guaranty
 
 
Section 2.3
 
Contribution
 
 
Section 2.4
 
Authorization; Other Agreements
 
 
Section 2.5
 
Guaranty Absolute and Unconditional
 
 
Section 2.6
 
Waivers
 
 
Section 2.7
 
Reliance
 
 
ARTICLE 3
 
GRANT OF SECURITY INTEREST
 
 
Section 3.1
 
Collateral
 
 
Section 3.2
 
Grant of Security Interest in Collateral
 
 
ARTICLE 4
 
REPRESENTATIONS AND WARRANTIES
 
 
Section 4.1
 
Title; No Other Liens
 
 
Section 4.2
 
Perfection and Priority
 
 
Section 4.3
 
Jurisdiction of Organization; Chief Executive Office
 
 
Section 4.4
 
Locations of Inventory; Equipment and Books and Records
 
 
Section 4.5
 
Pledged Collateral
 
 
Section 4.6
 
Instruments and Tangible Chattel Paper Formerly Accounts
 
 
Section 4.7
 
Intellectual Property
 
 
Section 4.8
 
Commercial Tort Claims
 
 
Section 4.9
 
Specific Collateral
 
 
Section 4.10
 
Enforcement
 
 
Section 4.11
 
Solvency
 
 
Section 4.12
 
Representations and Warranties of the Credit Agreement
 
 
ARTICLE 5
 
COVENANTS
 
 
Section 5.1
 
Maintenance of Perfected Security Interest; Further Documentation and Consents
 
 
 
 

-i-
 
 

 
TABLE OF CONTENTS
(continued)
Page
 
 
Section 5.2
 
Changes in Locations, Name, Etc
 
 
Section 5.3
 
Pledged Collateral
 
 
Section 5.4
 
Accounts
 
 
Section 5.5
 
Commodity Contracts
 
 
Section 5.6
 
Delivery of Instruments and Tangible Chattel Paper and
Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper
 
 
 
Section 5.7
 
Intellectual Property
 
 
Section 5.8
 
Notices
 
 
Section 5.9
 
Notice of Commercial Tort Claims
 
 
Section 5.10
 
Compliance with Credit Agreement
 
 
ARTICLE 6
 
REMEDIAL PROVISIONS
 
 
Section 6.1
 
Code and Other Remedies
 
 
Section 6.2
 
Accounts and Payments in Respect of General Intangibles;
Contracts
 
 
Section 6.3
 
Pledged Collateral
 
 
Section 6.4
 
Contracts
 
 
Section 6.5
 
Proceeds to be Turned over to and Held by Collateral Agent
 
 
Section 6.6
 
Registration Rights
 
 
Section 6.7
 
Deficiency
 
 
ARTICLE 7
 
THE COLLATERAL AGENT
 
 
Section 7.1
 
Collateral Agent's Appointment as Attorney-in-Fact
 
 
Section 7.2
 
Authorization to File Financing Statements
 
 
Section 7.3
 
Authority of Collateral Agent
 
 
Section 7.4
 
Duty: Obligations and Liabilities
 
 
ARTICLE 8
 
MISCELLANEOUS
 
 
Section 8.1
 
Reinstatement
 
 
Section 8.2
 
Release of Collateral
 
 
Section 8.3
 
Independent Obligations
 
 
Section 8.4
 
No Waiver by Course of Conduct
 
 
Section 8.5
 
Amendments in Writing
 
 
 
 

-ii-
 
 

 
TABLE OF CONTENTS
(continued)
Page
 
Section 8.6
 
Additional Grantors; Additional Pledged Collateral
 
 
Section 8.7
 
Notices
 
 
Section 8.8
 
Successors and Assigns
 
 
Section 8.9
 
Counterparts
 
 
Section 8.10
 
Severability
 
 
Section 8.11
 
Governing Law
 
 
Section 8.12
 
WAIVER OF JURY TRIAL
 
 
Section 8.13
 
Multiparty Agreement
 
 
 
 

-iii-
 
 

 
 
ANNEXES AND SCHEDULES
 
 
 
Annex 1
-
Form of Pledge Amendment
 
Annex 2
-
Form of Joinder Agreement
 
Annex 3
-
Form of Intellectual Property Security Agreement
       
 
Schedule 1
-
Commercial Tort Claims
 
Schedule 2
-
Filings
 
Schedule 3
-
Jurisdiction of Organization; Chief Executive Office
       
 
Schedule 4
-
Location of Inventory and Equipment
 
Schedule 5
-
Pledged Collateral
 
Schedule 6
-
Intellectual Property
 
 
-iv-
 
 

 

GUARANTY AND SECURITY AGREEMENT
 
GUARANTY AND SECURITY AGREEMENT, dated as of October 18, 2011, by CINEDIGM DIGITAL FUNDING 2, LLC, a Delaware limited liability company (the " Borrower "), and each of the other entities that becomes a party hereto pursuant to Section 8.6 (together with the Borrower, the " Grantors "), in favor of Société Générale, New York Branch, as collateral agent (in such capacity, together with its successors and permitted assigns, the " Collateral Agent ") for the Lenders and each other Secured Party (each as defined in the Credit Agreement referred to below).
 
W I T N E S S E T H:
 
WHEREAS, pursuant to the Credit Agreement dated as of October 18, 2011 (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the " Credit Agreement ") among the Borrower, the Lenders, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders and the other Secured Parties, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;
 
WHEREAS, each Grantor (other than the Borrower) has agreed to guaranty the Secured Obligations (as hereinafter defined) of the Borrower;
 
WHEREAS, each Grantor will derive substantial direct and indirect benefits from the making of the extensions of credit under the Credit Agreement; and
 
WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent;
 
NOW, THEREFORE, in consideration of the premises and to induce the Lenders and the Collateral Agent to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
 
ARTICLE 1
 
DEFINED TERMS
 
Section 1.1                        Definitions .
 
(a)           Capital terms used herein without definition are used as defined in the Credit Agreement.
 
(b)           The following terms have the meanings given to them in the UCC and terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC (such meanings to be equally applicable to both the singular and plural forms of the terms defined): " account ", " account debtor ", " as-extracted collateral ", " certificated security ", " chattel paper ", " commercial tort claim ", " commodity contract ", " deposit account ", " electronic chattel paper ", " equipment ", " farm products ", " fixture ", " general intangible ", " goods ", " health-care-
 

 
 

 

insurance receivable ", " instruments ", " inventory ", " investment property ", " letter-of-credit right ", " proceeds ", " record ", " securities account ", " security ", " supporting obligation " and " tangible chattel paper ".
 
(c)           The following terms shall have the following meanings:
 
" Agreement " means this Guaranty and Security Agreement.
 
" Applicable IP Office " means the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency within or outside the United States.
 
" Collateral " has the meaning specified in Section 3.1 .
 
" Contracts " means all contracts, undertakings, or agreements (other than rights evidenced by chattel paper, documents or instruments) to which any Grantor now is, or hereafter will be, bound, or a party, beneficiary or assignee, in any event, including all contracts, undertakings, or agreements in or under which any Grantor may now or hereafter have any right, title or interest, including each Digital Cinema Deployment Agreement, each Exhibitor Agreement, each Supply Agreement, the Management Services Agreement, each CDF2 Loan Document and each CHG Lease Facility Document, and any agreement relating to the terms of payment or the terms of performance of any account.
 
" Fraudulent Transfer Laws " has the meaning specified in Section 2.2 .
 
" Guaranteed Obligations " has the meaning specified in Section 2.1 .
 
" Guarantor " means each Grantor other than the Borrower.
 
" Guaranty " means the guaranty of the Guaranteed Obligations made by the Guarantors as set forth in this Agreement.
 
" Pledged Certificated Stock " means all certificated securities and any other Stock or Stock Equivalent of any Person evidenced by a certificate, instrument or other similar document (as defined in the UCC), in each case owned by any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Stock and Stock Equivalents set forth on Schedule 5 .
 
" Pledged Collateral " means, collectively, the Pledged Stock and the Pledged Debt Instruments.
 
" Pledged Debt Instruments " means all right, title and interest of any Grantor in instruments evidencing any Indebtedness owed to such Grantor or other obligations, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including each CDF2 Loan Document and all Indebtedness set forth on Schedule 5 , issued by the obligors named therein.
 

 
-2-

 

" Pledged Investment Property " means any investment property owned by any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, other than any Pledged Stock or Pledged Debt Instruments.
 
" Pledged Stock " means all Pledged Certificated Stock and all Pledged Uncertificated Stock.
 
" Pledged Uncertificated Stock " means any Stock or Stock Equivalent of any Person owned by any Grantor that is not Pledged Certificated Stock, including all right, title and interest of any Grantor as a limited or general partner in any partnership not constituting Pledged Certificated Stock or as a member of any limited liability company, all right, title and interest of any Grantor in, to and under any Constituent Document of any partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including in each case those interests set forth on Schedule 5 , to the extent such interests are not certificated.
 
" Secured Obligations " has the meaning specified in Section 3.2 .
 
" Software " means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing.
 
" UCC " means the Uniform Commercial Code as from time to time in effect in the State of New York; provided , however , that, in the event that, by reason of mandatory provisions of any applicable Requirement of Law, any of the attachment, perfection or priority of the Collateral Agent's or any other Secured Party's security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction other than the State of New York, " UCC " shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions.
 
" Vehicles " means all vehicles covered by a certificate of title law of any state.
 
Section 1.2                        Certain Other Terms .
 
(a)           The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. References herein to an Annex, Schedule, Article, Section or clause refer to the appropriate Annex or Schedule to, or Article, Section or clause in this Agreement. Where the context requires, provisions relating to any Collateral when used in relation to a Grantor shall refer to such Grantor's Collateral or any relevant part thereof.
 
(b)            Section 1.5 of the Credit Agreement is applicable to this Agreement as and to the extent set forth therein.
 

 
-3-

 

ARTICLE 2
 
GUARANTY
 
Section 2.1                        Guaranty . To induce the Lenders to make the Loans, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the Obligations of the Borrower whether existing on the date hereof or hereinafter incurred or created (other than obligations owing to SG under the SG Advisory Fee Note) (the "Guaranteed Obligations"). This Guaranty by each Guarantor hereunder constitutes a guaranty of payment and not of collection.
 
Section 2.2                        Limitation of Guaranty . Any term or provision of this Guaranty or any other Loan Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable hereunder shall not exceed the maximum amount for which such Guarantor can be liable without rendering this Guaranty or any other Loan Document, as it relates to such Guarantor, subject to avoidance under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title 11 of the United States Code or any applicable provisions of comparable Requirements of Law) (collectively, "Fraudulent Transfer Laws"). Any analysis of the provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established in Section 2.3 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under the Guaranty.
 
Section 2.3                        Contribution . To the extent that any Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a) the amount of the economic benefit actually received by such Guarantor from the Loans and other Guaranteed Obligations and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by the Borrower) in the same proportion as such Guarantor's net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.
 
Section 2.4                        Authorization; Other Agreements . The Secured Parties are hereby authorized, without notice to or demand upon any Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability hereunder, from time to time, to do each of the following:
 
(a)           (i) modify, amend, supplement or otherwise change, (ii) accelerate or otherwise change the time of payment of or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation or any Loan Document;
 
(b)           apply to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in such order as provided in the Loan Documents;
 

 
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(c)           refund at any time any payment received by any Secured Party in respect of any Guaranteed Obligation in such Secured Party's reasonable discretion;
 
(d)           (i) Sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise alter or release any Collateral for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add, release or substitute any one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner with the Borrower and any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and
 
(e)           settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.
 
Section 2.5                        Guaranty Absolute and Unconditional . Each Guarantor hereby waives and agrees not to assert any defense, whether arising in connection with or in respect of any of the following or otherwise, and hereby agrees that its obligations under this Guaranty are irrevocable, absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the following (which may not be pleaded and evidence of which may not be introduced in any proceeding with respect to this Guaranty, in each case except as otherwise agreed in writing by the Collateral Agent):
 
(a)           the invalidity or unenforceability of any obligation of the Borrower or any other Guarantor under any Loan Document or any other agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any security for the Guaranteed Obligations or any part thereof;
 
(b)           the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from the Borrower or any other Guarantor or other action to enforce the same or (ii) any action to enforce any Loan Document or any Lien thereunder;
 
(c)           the failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to, any Collateral;
 
(d)           any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against the Borrower, any other Guarantor or any of the Borrower's other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;
 
(e)           any foreclosure, whether or not through judicial sale, and any other Sale of any Collateral or any election following the occurrence of an Event of Default by any Secured Party to proceed separately against any Collateral in accordance with such Secured Party's rights under any applicable Requirement of Law; or
 

 
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(f)           any other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of the Borrower, any other Guarantor or any of the Borrower's other Subsidiaries, in each case other than the payment in full of the Guaranteed Obligations.
 
Section 2.6                        Waivers . Each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder including any of the following: (a) any demand for payment or performance and protest and notice of protest, (b) any notice of acceptance, (c) any presentment, demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming immediately due and payable and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any disability or other defense of the Borrower or any other Guarantor. Each Guarantor further unconditionally and irrevocably agrees, until indefeasible payment in full of the Guaranteed Obligations, not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against the Borrower or any other Guarantor by reason of any Loan Document or any payment made thereunder or (y) assert any claim, defense, setoff or counterclaim it may have against any other Loan Party or set off any of its obligations to such other Loan Party against obligations of such Loan Party to such Guarantor. No obligation of any Guarantor hereunder shall be discharged other than by complete performance.
 
Section 2.7                        Reliance . Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Borrower, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and each Guarantor hereby agrees that no Secured Party shall have any duty to advise any Guarantor of information known to it regarding such condition or any such circumstances. In the event any Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any such information to any Guarantor, such Secured Party shall be under no obligation to (a) undertake any investigation not a part of its regular business routine, (b) disclose any information that such Secured Party, pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to any Guarantor.
 
ARTICLE 3
 
GRANT OF SECURITY INTEREST
 
Section 3.1                        Collateral . For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests is collectively referred to as the " Collateral ":
 
(a)           all accounts, chattel paper, Contracts, deposit accounts (including any concentration account and Cash Management Account), securities accounts, documents (as
 

 
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defined in the UCC), equipment, general intangibles, instruments, inventory, investment property, and any supporting obligations related thereto;
 
(b)           the commercial tort claims described on Schedule 1 and on any supplement thereto received by the Collateral Agent pursuant to Section 5.9 ;
 
(c)           all books and records pertaining to the other property described in this Section 3.1 ;
 
(d)           all property of such Grantor held by any Secured Party, including all property of every description, in the custody of or in transit to such Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have any right or power, including but not limited to cash;
 
(e)           all other goods (including but not limited to fixtures) and personal property of such Grantor, whether tangible or intangible and wherever located;
 
(f)           any and all additions, accessions and improvements to, all substitutions and replacements for and all products of or derived from the foregoing; and
 
(g)           to the extent not otherwise included, all proceeds of the foregoing.
 
Section 3.2                        Grant of Security Interest in Collateral . Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all Obligations of such Grantor (other than the obligations of the Borrower owing to SG under the SG Advisory Fee Note) (the "Secured Obligations"), hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and under the Collateral of such Grantor.  Without limitation of the foregoing, each Grantor collaterally assigns all of such Grantor's right, title and interest in and to the Collateral to the Collateral Agent for the benefit of the holders of the Secured Obligations to secure the payment and performance of the Secured Obligations to the full extent that such a collateral assignment is possible under the relevant law.
 
ARTICLE 4
 
REPRESENTATIONS AND WARRANTIES
 
To induce the Lenders and the Collateral Agent to enter into the Loan Documents, each Grantor hereby represents and warrants each of the following to the Collateral Agent, the Lenders and the other Secured Parties:
 
Section 4.1                        Title; No Other Liens . Except for the Lien granted to the Collateral Agent pursuant to this Agreement and other Permitted Liens under any Loan Document (including Section 4.2), such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. Such Grantor (a) is the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien.
 

 
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Section 4.2                        Perfection and Priority . The security interest granted pursuant to this Agreement constitutes a valid and continuing perfected security interest in favor of the Collateral Agent in all Collateral subject, for the following Collateral, to the occurrence of the following: (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of the filings and other actions specified on Schedule 2 (which, in the case of all filings and other documents referred to on such schedule with respect to Collateral existing as of the Effective Date, have been delivered to the Collateral Agent in completed and duly authorized form), (ii) in the case of any deposit account, the execution of a Control Agreement, (iii) in the case of all Copyrights, Trademarks and Patents for which UCC filings are insufficient, all appropriate filings having been made with the United States Copyright Office or the United States Patent and Trademark Office, as applicable, (iv) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of a Contractual Obligation granting control under the UCC to the Collateral Agent over such letter-of-credit rights, (v) in the case of electronic chattel paper, the completion of all steps necessary to grant control to the Collateral Agent over such electronic chattel paper under the UCC and (vi) in the case of Vehicles, the actions required under Section 5.1(e). Such security interest shall be prior to all other Liens on the Collateral except for Customary Permitted Liens having priority over the Collateral Agent's Lien by operation of law or unless otherwise permitted by any Loan Document upon (i) in the case of all Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property, the delivery thereof to the Collateral Agent of such Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property consisting of instruments and certificates, in each case properly endorsed for transfer to the Collateral Agent or in blank, (ii) in the case of all Pledged Investment Property not in certificated form, the execution of Control Agreements with respect to such investment property and (iii) in the case of all other instruments and tangible chattel paper that are not Pledged Certificated Stock, Pledged Debt Instruments or Pledged Investment Property, the delivery thereof to the Collateral Agent of such instruments and tangible chattel paper. Except as set forth in this Section 4.2, as of the Effective Date all actions by each Grantor necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken. Upon the taking of the action described in this Section 4.2, such security interest shall be prior to all other Liens on the Collateral except for Customary Permitted Liens having priority over the Collateral Agent's Lien by operation of law or unless otherwise permitted by any Loan Document.
 
Section 4.3                        Jurisdiction of Organization; Chief Executive Office . Such Grantor's jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Grantor's chief executive office or sole place of business, in each case as of the date hereof, is specified on Schedule 3 and such Schedule 3 also lists all jurisdictions of incorporation, legal names and locations of such Grantor's chief executive office or sole place of business for the five years preceding the date hereof.
 
Section 4.4                        Locations of Inventory; Equipment and Books and Records . On the date hereof, such Grantor's inventory and equipment (other than inventory or equipment in transit) and books and records concerning the Collateral are kept at the locations listed on Schedule 4 and such Schedule 4 also lists the locations of such inventory, equipment and books and records for the five years preceding the date hereof.
 

 
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Section 4.5                        Pledged Collateral .
 
(a)           The Pledged Stock pledged by such Grantor hereunder (i) is listed on Schedule 5 and constitutes (or, in respect of Pledged Stock, the issuer of which is not a Subsidiary of or otherwise controlled by such Grantor, to such Grantor's knowledge constitutes) that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on Schedule 5 , and (ii) with respect to Pledged Stock, the issuer of which is a Subsidiary of or otherwise controlled by such Grantor, has been duly authorized, validly issued and is fully paid and nonassessable (other than Pledged Stock in limited liability companies and partnerships) and (iii) to the extent constituting an obligation, constitutes the legal, valid and binding obligation of the issuer thereof with respect thereto, enforceable in accordance with its terms.
 
(b)           As of the Effective Date, all Pledged Collateral (other than Pledged Uncertificated Stock) and all Pledged Investment Property consisting of instruments and certificates in existence as of the Effective Date have been delivered to the Collateral Agent in accordance with Section 5.3(a) .
 
(c)           Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall be entitled to exercise all of the rights of the Grantor granting the security interest in any Pledged Stock, and a transferee or assignee of such Pledged Stock shall become a holder of such Pledged Stock to the same extent as such Grantor and shall be entitled to participate in the management of the issuer of such Pledged Stock to the same extent as such Grantor and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.
 
Section 4.6                        Instruments and Tangible Chattel Paper Formerly Accounts . No amount payable to such Grantor under or in connection with any account is evidenced by any instrument or tangible chattel paper involving an amount in excess of $250,000 in the aggregate at any one time that has not been delivered to the Collateral Agent, properly endorsed for transfer, to the extent delivery is required by Section 5.6(a).
 
Section 4.7                        Intellectual Property .
 
(a)            Schedule 6 sets forth a true and complete list of the following Intellectual Property such Grantor owns, licenses or otherwise has the right to use:  (i) Intellectual Property that is registered or subject to applications for registration, (ii) Internet Domain Names and (iii) other Intellectual Property and material Software, separately identifying that owned and licensed to such Grantor and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by the Grantor with respect thereto.
 
(b)           On the Effective Date, all Intellectual Property owned by such Grantor is valid, in full force and effect, subsisting, unexpired and enforceable, and no Intellectual Property has been abandoned. No breach or default of any IP License shall be caused by any of the following, and none of the following shall limit or impair the ownership, use, validity or enforceability of, or

 
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any rights of such Grantor in, any Intellectual Property material to the business of such Grantor: (i) the consummation of the transactions contemplated by any Loan Document or (ii) any holding, decision, judgment or order rendered by any Governmental Authority in existence as of the Effective Date.  As of the Effective Date, there are no pending (or, to the knowledge of such Grantor, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes challenging the ownership, use, validity, enforceability of, or such Grantor's rights in, any Intellectual Property material to the business of such Grantor.  As of the Effective Date, to such Grantor's knowledge, no Person has been or is infringing, misappropriating, diluting, violating or otherwise impairing any such Intellectual Property of such Grantor. Such Grantor, and to such Grantor's knowledge each other party thereto, is not in material breach or default of any material IP License.
 
Section 4.8                        Commercial Tort Claims . The only commercial tort claims of any Grantor existing on the date hereof (regardless of whether the amount, defendant or other material facts can be determined and regardless of whether such commercial tort claim has been asserted, threatened or has otherwise been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on Schedule 1, which sets forth such information separately for each Grantor.
 
Section 4.9                        Specific Collateral . None of the Collateral is or is proceeds or products of farm products, as-extracted collateral, health-care-insurance receivables or timber to be cut.
 
Section 4.10                        Enforcement . No Permit, notice to or filing with any Governmental Authority or any other Person or any consent from any Person is required for the exercise by the Collateral Agent of its rights (including voting rights) provided for in this Agreement or the enforcement of remedies in respect of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except as may be required in connection with the disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally or any approvals that may be required to be obtained from any bailees or landlords to collect the Collateral.
 
Section 4.11                        Solvency .   Grantor is Solvent on the date hereof and Grantor does not intend to incur or believe that it will incur, debts that will be beyond its ability to pay as such debts mature.
 
Section 4.12                        Representations and Warranties of the Credit Agreement . The representations and warranties as to such Grantor and its Subsidiaries made by the Borrower in Article IV of the Credit Agreement as of a certain date are true and correct as of such date.
 
ARTICLE 5
 
COVENANTS
 
Each Grantor agrees with the Collateral Agent to the following, as long as any Secured Obligation or Commitment remains outstanding and, in each case, unless the Required Lenders otherwise consent in writing:

 
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Section 5.1                        Maintenance of Perfected Security Interest; Further Documentation and Consents .
 
(a)           Such Grantor shall (i) not use or permit any Collateral to be used in violation of any provision of any Loan Document, any Requirement of Law in any material respect or any policy of insurance covering the Collateral and (ii) not enter into any Contractual Obligation or undertaking restricting the right or ability of such Grantor or the Collateral Agent to Sell any Collateral if such restriction would have a Material Adverse Effect.
 
(b)           Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4.2 and shall defend such security interest and such priority against the claims and demands of all Persons.
 
(c)           Pursuant to clause (ii) of Section 6.1(e) of the Credit Agreement, such Grantor shall furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other documents in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail and in form and substance satisfactory to the Collateral Agent.
 
(d)           At any time and from time to time, upon the written request of the Collateral Agent, such Grantor shall, for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, (i) promptly and duly execute and deliver, and have recorded, such further documents, including an authorization to file (or, as applicable, the filing) of any financing statement or amendment under the UCC (or other filings under similar Requirements of Law) in effect in any jurisdiction with respect to the security interest created hereby and (ii) take such further action as the Collateral Agent may reasonably request, including (A) securing all approvals necessary or appropriate for the assignment to or for the benefit of the Collateral Agent of any Contractual Obligation, including any IP License, held by such Grantor and to enforce the security interests granted hereunder and (B) executing and delivering any Control Agreements with respect to deposit accounts and securities accounts.
 
(e)           If requested by the Collateral Agent, the Grantor shall arrange for the Collateral Agent's first priority security interest to be noted on the certificate of title of each Vehicle and shall file any other necessary documentation in each jurisdiction that the Collateral Agent shall deem advisable to perfect its security interests in any Vehicle.
 
Section 5.2                        Changes in Locations, Name, Etc . Except upon 30 days' prior written notice to the Collateral Agent and delivery to the Collateral Agent of (a) all documents reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interests provided for herein and (b) if applicable, a written supplement to Schedule 4 showing any additional locations at which inventory or equipment shall be kept, such Grantor shall not do any of the following:
 
(i)           permit any inventory or equipment to be kept at a location other than those listed on Schedule 4 , except for inventory or equipment in transit;
 
(ii)           change its jurisdiction of organization or its location, in each case from that referred to in Section 4.3 ; or

 
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(iii)           change its legal name or organizational identification number, if any, or corporation, limited liability company, partnership or other organizational structure to such an extent that any financing statement filed in connection with this Agreement would become misleading.
 
Section 5.3                        Pledged Collateral .
 
(a)            Delivery of Pledged Collateral . Such Grantor shall (i) deliver to the Collateral Agent, in suitable form for transfer and in form and substance satisfactory to the Collateral Agent, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates and instruments evidencing Pledged Investment Property and (ii) maintain all other Pledged Investment Property in a Cash Collateral Account.
 
(b)            Event of Default . During the continuance of an Event of Default, the Collateral Agent shall have the right, at any time in its discretion and without notice to the Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any Pledged Investment Property and (ii) exchange any certificate or instrument representing or evidencing any Pledged Collateral or any Pledged Investment Property for certificates or instruments of smaller or larger denominations.
 
(c)            Cash Distributions with respect to Pledged Collateral . Except as provided in Article 6 , such Grantor shall be entitled to receive all cash, interest, dividends and distributions paid in respect of the Pledged Collateral or the Pledged Investment Property.
 
(d)            Voting Rights . Except as provided in Article 6 , such Grantor shall be entitled to exercise all voting, consent and corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral and the Pledged Investment Property; provided , however , that no vote shall be cast, consent given or right exercised or other action taken by such Grantor that would impair the Collateral or be inconsistent with or result in any violation of any provision of any Loan Document.
 
Section 5.4                        Accounts .
 
(a)           Such Grantor shall not without the Collateral Agent's prior written consent, other than in the ordinary course of business, (i) grant any extension of the time of payment of any account, (ii) compromise or settle any account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any account, (iv) allow any credit or discount on any account or (v) amend, supplement or modify any account in any manner that could adversely affect the value thereof.
 
(b)           The Collateral Agent shall have the right to make test verifications of the accounts in any manner and through any medium that it reasonably considers advisable, and such Grantor shall furnish all such assistance and information as the Collateral Agent may reasonably require in connection therewith, provided , however , that unless a Default shall be continuing, (i) the Collateral Agent shall request no more than four such reports during any calendar year and (ii) the Collateral Agent may not directly contact any account debtor without Guarantor's prior written consent. At any time and from time to time, upon the Collateral Agent's request, such Grantor shall cause independent public accountants or others satisfactory to the Collateral Agent

 
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to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the accounts; provided , however , that unless a Default shall be continuing, the Collateral Agent shall request no more than four such reports during any calendar year.
 
Section 5.5                        Commodity Contracts . Such Grantor shall not have any commodity contract other than with a Person approved by the Collateral Agent and subject to a Control Agreement .
 
Section 5.6                        Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper .
 
(a)           If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by an instrument or tangible chattel paper involving an amount in excess of $250,000 in the aggregate at any one time other than such instrument delivered in accordance with Section 5.3(a) and in the possession of the Collateral Agent, such Grantor shall mark all such instruments and tangible chattel paper with the following legend: "This writing and the obligations evidenced or secured hereby are subject to the security interest of Société Générale, New York Branch, as Collateral Agent" and, at the request of the Collateral Agent, shall immediately deliver such instrument or tangible chattel paper to the Collateral Agent, duly indorsed in a manner satisfactory to the Collateral Agent.
 
(b)           Such Grantor shall not grant "control" (within the meaning of such term under Section 9-106 of the UCC) over any investment property to any Person other than the Collateral Agent.
 
(c)           If such Grantor is or becomes the beneficiary of a letter of credit that is not a supporting obligation of any Collateral, such Grantor shall promptly, and in any event within 2 Business Days after becoming a beneficiary, notify the Collateral Agent thereof and enter into a Contractual Obligation with the Collateral Agent, the issuer of such letter of credit or any nominated person with respect to the letter-of-credit rights under such letter of credit. Such Contractual Obligation shall assign such letter-of-credit rights to the Collateral Agent in a manner sufficient to grant control for the purposes of Section 9-107 of the UCC (or any similar section under any equivalent UCC). Such Contractual Obligation shall also direct all payments thereunder to a Cash Collateral Account. The provisions of the Contractual Obligation shall be in form and substance reasonably satisfactory to the Collateral Agent.
 
(d)           If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by electronic chattel paper, such Grantor shall take all steps necessary to grant the Collateral Agent control of all such electronic chattel paper for the purposes of Section 9-105 of the UCC (or any similar section under any equivalent UCC) and all "transferable records" as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.
 
Section 5.7                        Intellectual Property .
 
(a)           Promptly (and in any event within 10 Business Days) after any change to Schedule 6 for such Grantor, such Grantor shall provide the Collateral Agent notification thereof
 

 
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and the short-form intellectual property agreements and assignments as described in this Section 5.7 and other documents that the Collateral Agent reasonably requests with respect thereto.
 
(b)           Such Grantor shall (and shall cause all its licensees to) (i) (1) continue to use each Trademark material to such Grantor's business included in the Intellectual Property in order to maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark is currently used, free from any claim of abandonment for non-use, (2) maintain at least the same standards of quality of products and services offered under such Trademark as are currently maintained, (3) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, and (4) not adopt or use any other Trademark that is confusingly similar or a colorable imitation of such Trademark unless the Collateral Agent shall obtain a perfected security interest in such other Trademark pursuant to this Agreement and (ii) not do any act or omit to do any act whereby, (w) any Trademark material to such Grantor's business (or any goodwill associated therewith) may become destroyed, invalidated, impaired or harmed in any way, (x) any Patent material to such Grantor's business included in the Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, (y) any portion of the Copyrights material to such Grantor's business included in the Intellectual Property may become invalidated, otherwise impaired or fall into the public domain or (z) any Trade Secret material to such Grantor's business that is Intellectual Property may become publicly available or otherwise unprotectable.
 
(c)           Such Grantor shall notify the Collateral Agent promptly if it knows that any application or registration relating to any Intellectual Property material to the business of such Grantor may become forfeited, misused, unenforceable, abandoned or dedicated to the public, or of any adverse determination or development regarding the validity or enforceability of such Grantor's ownership of, interest in, right to use, register, own or maintain any such Intellectual Property (including the institution of, or any such determination or development in, any proceeding relating to the foregoing in any Applicable IP Office). Such Grantor shall take all actions that are necessary or reasonably requested by the Collateral Agent to maintain and pursue each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation included in the Intellectual Property material to the business of such Grantor.
 
(d)           Such Grantor shall not knowingly do any act or knowingly omit to do any act to infringe, misappropriate, dilute, violate or otherwise impair the Intellectual Property of any other Person. In the event that any Intellectual Property of such Grantor is or has been infringed, misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall take such action as it reasonably deems appropriate under the circumstances in response thereto, including promptly bringing suit and recovering all damages therefor to the extent it is commercially reasonable to do so.
 
(e)           Such Grantor shall execute and deliver to the Collateral Agent in form and substance reasonably acceptable to the Collateral Agent and suitable for (i) filing in the Applicable IP Office the short-form intellectual property security agreements in the form attached hereto as Annex 3 for all Copyrights, Trademarks, Patents and IP Licenses of such Grantor and (ii) recording with the appropriate Internet domain name registrar, a duly executed
 

 
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form of assignment for all Internet Domain Names of such Grantor (together with appropriate supporting documentation as may be requested by the Collateral Agent).
 
Section 5.8                        Notices . Such Grantor shall promptly notify the Collateral Agent in writing of its acquisition of any interest hereafter in property that is of a type where a security interest or lien must be or may be registered, recorded or filed under, or notice thereof given under, any federal statute or regulation.
 
Section 5.9                        Notice of Commercial Tort Claims . Such Grantor agrees that, if it shall acquire any interest in any commercial tort claim (whether from another Person or because such commercial tort claim shall have come into existence), (i) such Grantor shall, promptly upon such acquisition, deliver to the Collateral Agent, in each case in form and substance reasonably satisfactory to the Collateral Agent, a notice of the existence and nature of such commercial tort claim and a supplement to Schedule 1 containing a specific description of such commercial tort claim, (ii) Section 3.1 shall apply to such commercial tort claim and (iii) such Grantor shall execute and deliver to the Collateral Agent, in each case in form and substance reasonably satisfactory to the Collateral Agent, any document, and take all other action, reasonably deemed by the Collateral Agent to be reasonably necessary or appropriate for the Collateral Agent to obtain, on behalf of the Secured Parties, a perfected security interest having at least the priority set forth in Section 4.2 in all such commercial tort claims. Any supplement to Schedule 1 delivered pursuant to this Section 5.9 shall, after the receipt thereof by the Collateral Agent, become part of Schedule 1 for all purposes hereunder other than in respect of representations and warranties made prior to the date of such receipt.
 
Section 5.10                        Compliance with Credit Agreement . Such Grantor agrees to comply with all covenants and other provisions applicable to it under the Credit Agreement, including Sections 2.15, 11.3 and 11.4 of the Credit Agreement and agrees to the same submission to jurisdiction as that agreed to by the Borrower in the Credit Agreement.
 
ARTICLE 6
 
REMEDIAL PROVISIONS
 
Section 6.1                        Code and Other Remedies .
 
(a)            UCC Remedies . During the continuance of an Event of Default, the Collateral Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to any Secured Obligation, all rights and remedies of a secured party under the UCC or any other applicable law.
 
(b)            Disposition of Collateral . Without limiting the generality of the foregoing, the Collateral Agent may, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), during the continuance of any Event of Default (personally or through its agents or attorneys), (i) enter upon the premises where any Collateral is located, without any obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or any other Person notice or opportunity for a
 

 
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hearing on the Collateral Agent's claim or action, (ii) collect, receive, appropriate and realize upon any Collateral and (iii) Sell, grant an option or options to purchase and deliver any Collateral (or enter into Contractual Obligations to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Collateral Agent shall have the right, upon any such public sale or sales and, to the extent permitted by the UCC and other applicable Requirements of Law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or equity is hereby waived and released.
 
(c)            Management of the Collateral . Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at the Collateral Agent's request, it shall assemble the Collateral and make it available to the Collateral Agent at places that the Collateral Agent shall reasonably select, whether at such Grantor's premises or elsewhere, (ii) without limiting the foregoing, the Collateral Agent also has the right to require that each Grantor store and keep any Collateral pending further action by the Collateral Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii) until the Collateral Agent is able to Sell any Collateral, the Collateral Agent shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent and (iv) the Collateral Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to enforce any of the Collateral Agent's remedies (for the benefit of the Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment. The Collateral Agent shall not have any obligation to any Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to any Collateral while such Collateral is in the possession of the Collateral Agent.
 
(d)            Application of Proceeds . The Collateral Agent shall apply the cash proceeds of any action taken by it pursuant to this Section 6.1 , after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and any other Secured Party hereunder, including reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the Credit Agreement, and only after such application and after the payment by the Collateral Agent of any other amount required by any Requirement of Law, need the Collateral Agent account for the surplus, if any, to any Grantor.
 
(e)            Direct Obligation . Neither the Collateral Agent nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any Grantor, any other Loan Party or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof. All of the rights and remedies of the Collateral Agent and any other Secured Party under any Loan Document shall be cumulative, may be exercised individually or concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law. To the extent it may lawfully do so, each Grantor absolutely and
 

 
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irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any Secured Party, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.
 
(f)            Commercially Reasonable . To the extent that applicable Requirements of Law impose duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for the Collateral Agent to do any of the following:
 
(i)           fail to incur significant costs, expenses or other Liabilities reasonably deemed as such by the Collateral Agent to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;
 
(ii)           fail to obtain Permits, or other consents, for access to any Collateral to Sell or for the collection or Sale of any Collateral, or, if not required by other Requirements of Law, fail to obtain Permits or other consents for the collection or disposition of any Collateral;
 
(iii)           fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;
 
(iv)           advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature or to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring any such Collateral;
 
(v)           exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature or, to the extent deemed appropriate by the Collateral Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;
 
(vi)           dispose of assets in wholesale rather than retail markets;
 
(vii)           disclaim disposition warranties, such as title, possession or quiet enjoyment; or
 

 
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(viii)           purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of any Collateral or to provide the Collateral Agent a guaranteed return from the collection or disposition of any Collateral.
 
Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a non-exhaustive list of actions or omissions that are commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by the Secured Parties shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 6.1 . Without limitation upon the foregoing, nothing contained in this Section 6.1 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this Section 6.1 .
 
(g)            IP Licenses . For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Section 6.1 (including in order to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, Sell or grant options to purchase any Collateral) at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent, for the benefit of the Secured Parties, (i) an irrevocable, nonexclusive, worldwide license (exercisable without payment of royalty or other compensation to such Grantor), including in such license the right to sublicense, use and practice any Intellectual Property now owned or hereafter acquired by such Grantor and access to all media in which any of the licensed items may be recorded or stored and to all Software and programs used for the compilation or printout thereof and (ii) an irrevocable license (without payment of rent or other compensation to such Grantor) to use, operate and occupy all real property owned, operated, leased, subleased or otherwise occupied by such Grantor.
 
Section 6.2                        Accounts and Payments in Respect of General Intangibles; Contracts .
 
(a)           In addition to, and not in substitution for or limitation of, any similar requirement in the Credit Agreement, if required by the Collateral Agent at any time during the continuance of an Event of Default, any payment of accounts or payment under any Contract or otherwise in respect of general intangibles, when collected by any Grantor, shall be promptly (and, in any event, within 2 Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent, in a Cash Collateral Account, subject to withdrawal by the Collateral Agent as provided in Section 6.4 . Until so turned over, such payment shall be held by such Grantor in trust for the Collateral Agent, and segregated from other funds of such Grantor. Each such deposit of proceeds of accounts and payments under any Contract or otherwise in respect of general intangibles shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.
 
(b)           At any time during the continuance of an Event of Default:
 
(i)           each Grantor shall, upon the Collateral Agent's request, deliver to the Collateral Agent all original and other documents evidencing, and relating to, the Contracts and transactions that gave rise to any account or any payment in respect of general intangibles, including all original orders, invoices and shipping receipts and notify account debtors that the
 

 
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accounts or general intangibles have been collaterally assigned to the Collateral Agent and that payments in respect thereof shall be made directly to the Collateral Agent;
 
(ii)           the Collateral Agent may, without notice, at any time during the continuance of an Event of Default, limit or terminate the authority of a Grantor to collect its accounts or amounts due under Contracts, other general intangibles or any thereof and, in its own name or in the name of others, communicate with account debtors to verify with them to the Collateral Agent's satisfaction the existence, amount and terms of any account or amounts due under any Contract or other general intangible. In addition, the Collateral Agent may at any time enforce such Grantor's rights, under Contracts, under applicable law, or otherwise, against such account debtors and obligors of general intangibles; and
 
(iii)           each Grantor shall take all actions, deliver all documents and provide all information necessary or reasonably requested by the Collateral Agent to ensure any Internet Domain Name is registered.
 
(c)           Anything herein to the contrary notwithstanding, each Grantor shall remain liable to observe and perform all the conditions and obligations to be observed and performed by it under each Contract, each account and each payment in respect of general intangibles, all in accordance with the terms of any Contract or other agreement giving rise thereto. No Secured Party shall have any obligation or liability under any Contract or other agreement giving rise to an account or a payment in respect of a general intangible by reason of or arising out of any Loan Document or the receipt by any Secured Party of any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any obligation of any Grantor under or pursuant to any Contract or other agreement giving rise to an account or a payment in respect of a general intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
 
Section 6.3                        Pledged Collateral .
 
(a)            Voting Rights . During the continuance of an Event of Default, upon notice by the Collateral Agent to the relevant Grantor or Grantors, the Collateral Agent or its nominee may exercise (A) any voting, consent, corporate and other right pertaining to the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock, the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent may determine), all without liability except to account for property actually received by it; provided , however , that the Collateral Agent shall have no duty to any Grantor to exercise any
 

 
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such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
 
(b)            Proxies . In order to permit the Collateral Agent to exercise the voting and other consensual rights that it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Collateral Agent all such proxies, dividend payment orders and other instruments as the Collateral Agent may from time to time reasonably request and (ii) without limiting the effect of clause (i) above, such Grantor hereby grants to the Collateral Agent an irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations.
 
(c)            Authorization of Issuers .   Each Grantor hereby expressly irrevocably authorizes and instructs, without any further instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with any instruction received by it from the Collateral Agent in writing that states that an Event of Default is continuing and is otherwise in accordance with the terms of this Agreement and each Grantor agrees that such issuer shall be fully protected from Liabilities to such Grantor in so complying and (ii) unless otherwise expressly permitted hereby, pay any dividend or make any other payment with respect to the Pledged Collateral directly to the Collateral Agent.
 
Section 6.4                        Contracts .   Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, at its option, exercise one or more of the following remedies with respect to the Contracts that constitute Collateral:
 
(a)           (i) take any action permitted under Section 6.1 , Section 6.2 , or otherwise under this Agreement and (ii) in the place and stead of the applicable Grantor, exercise any other rights of such Grantor under the Contracts in accordance with the terms thereof.  Without limitation of the foregoing, each Grantor agrees that upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, but is not obligated to, give notices, consents and demands and make elections under the Contracts, modify or waive the terms of the Contracts and enforce the Contracts, in each case, to the same extent and on the same terms as such Grantor might have done.  It is understood and agreed that notwithstanding the exercise of such rights and/or the taking of such actions by the Collateral Agent, such Grantor shall remain liable for performance of its obligations under the Contracts;
 
(b)           upon receipt by the Collateral Agent of notice from any counterparty to any Contract (the " Counterparties ") of such Counterparty's intent to terminate such Contract, the Collateral Agent shall be entitled, but shall not be obligated, to (i) cure or cause to be cured the
 

 
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condition giving rise to such Counterparty's right of termination of such Contract, or (ii) acquire and assume (or assign and cause the assumption by a third party of) the rights and obligations of the applicable Grantor under such Contract; and
 
(c)           upon termination of any Contract by operation of law or otherwise, the Collateral Agent shall be entitled, but shall not be obligated, to enter into a new agreement (" Successor Agreement ") with the Counterparty to such terminated Contract, on the same terms and with the same provisions as such terminated Contract.  Each Grantor shall have no rights or obligations whatsoever with respect to any Successor Agreement (it being understood that nothing herein shall release the Grantor of any obligations it may have under such terminated Contract).
 
Each Grantor acknowledges that the rights of the Collateral Agent described in this Section 6.4 are necessary to protect the interests of the Secured Parties and agrees to accept any actions taken by Collateral Agent in accordance with this Section 6.4 .  It is also understood and agreed that notwithstanding the taking of any such actions by the Collateral Agent pursuant to this Section 6.4 , the Collateral Agent shall not incur any liability to such Grantor or any other Person as a result of any such actions, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of the Collateral Agent (each as determined in a final, non-appealable judgment by a court of competent jurisdiction).  Each Grantor (i) authorizes the actions of the Counterparties under this Section 6.4 and (ii) agrees that following the receipt by the Collateral Agent of such notice described under subsection (b) above, or upon termination of any Contract as described in subsection (c), the Counterparties are authorized to, without further inquiry, rely on and act in accordance with any instructions such Counterparty receives which purport to be originated from the Collateral Agent without further consent from such Grantor notwithstanding any conflicting or contrary instructions such Counterparty receives from such Grantor, and such Counterparty shall have no liability to the Collateral Agent, the Grantors or any other Person in relying on and acting in accordance with any such instructions.
 
Section 6.5                        Proceeds to be Turned over to and Held by Collateral Agent . Unless otherwise expressly provided in the Credit Agreement or this Agreement, all proceeds of any Collateral received by any Grantor hereunder in cash or Cash Equivalents shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be turned over to the Collateral Agent in the exact form received (with any necessary endorsement). All such proceeds of Collateral and any other proceeds of any Collateral received by the Collateral Agent in cash or Cash Equivalents shall be held by the Collateral Agent in a Cash Collateral Account. All proceeds being held by the Collateral Agent in a Cash Collateral Account (or by such Grantor in trust for the Collateral Agent) shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in the Credit Agreement.
 
Section 6.6                        Registration Rights .
 
(a)           If, in the opinion of the Collateral Agent, it is necessary or advisable to Sell any portion of the Pledged Collateral by registering such Pledged Collateral under the provisions of the Securities Act of 1933 (the " Securities Act "), each relevant Grantor shall cause the issuer
 

 
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thereof (or, to the extent the issuer thereof is not a Subsidiary or otherwise controlled by such Grantor, use commercially reasonable efforts to cause the issuer thereof) to do or cause to be done all acts as may be, in the opinion of the Collateral Agent, necessary or advisable to register such Pledged Collateral or that portion thereof to be Sold under the provisions of the Securities Act, all as directed by the Collateral Agent in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto and in compliance with the securities or laws of any jurisdiction that the Collateral Agent shall designate.
 
(b)           Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act and applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act or under applicable state securities laws even if such issuer would agree to do so.
 
(c)           Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of any portion of the Pledged Collateral pursuant to this Section 6.6 valid and binding and in compliance with all applicable Requirements of Law. Each Grantor further agrees that a breach of any covenant contained in this Section 6.6 will cause irreparable injury to the Collateral Agent and other Secured Parties, that the Collateral Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.6 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreement.
 
Section 6.7                        Deficiency . Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed by the Collateral Agent or any other Secured Party to collect such deficiency.
 
ARTICLE 7
 
THE COLLATERAL AGENT
 
Section 7.1                        Collateral Agent's Appointment as Attorney-in-Fact .
 
(a)           Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any Related Person thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the
 

 
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name of such Grantor or in its own name, for the purpose of carrying out the terms of the Loan Documents, to take any appropriate action and to execute any document or instrument that may be necessary or desirable to accomplish the purposes of the Loan Documents, and, without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent and its Related Persons the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the following when an Event of Default shall be continuing:
 
(i)           in the name of such Grantor, in its own name or otherwise, take possession of and indorse and collect any check, draft, note, acceptance or other instrument for the payment of moneys due under any account or general intangible or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any such moneys due under any Contract, account or general intangible or with respect to any other Collateral whenever payable;
 
(ii)           in the case of any Intellectual Property owned by or licensed to the Grantors, execute, deliver and have recorded any document that the Collateral Agent may request to evidence, effect, publicize or record the Collateral Agent's security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;
 
(iii)           pay or discharge taxes and Liens levied or placed on or threatened against any Collateral, effect any repair or pay any insurance called for by the terms of the Credit Agreement (including all or any part of the premiums therefor and the costs thereof);
 
(iv)           execute, in connection with any sale provided for in Section 6.1 or Section 6.6 , any document to effect or otherwise necessary or appropriate in relation to evidence the Sale of any Collateral; or
 
(v)           (A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct, (B) ask or demand for, and collect and receive payment of and receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral, (C) sign and indorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment, verification, notice and other document in connection with any Collateral, (D) commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other right in respect of any Collateral, (E) defend any actions, suits, proceedings, audits, claims, demands, orders or disputes brought against such Grantor with respect to any Collateral, (F) settle, compromise or adjust any such actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate, (G) assign any Intellectual Property owned by the Grantors or any IP Licenses of the Grantors throughout the world on such terms and conditions and in such manner as the Collateral Agent shall in its sole discretion determine, including the execution and filing of any document necessary to effectuate or record such assignment, (H) take any of the actions described in Sections 6.2 and 6.4 , and (I) generally, Sell, grant a Lien on, make any Contractual Obligation with respect to and otherwise deal with, any
 

 
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Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes and do, at the Collateral Agent's option, at any time or from time to time, all acts and things that the Collateral Agent deems necessary to protect, preserve or realize upon any Collateral and the Secured Parties' security interests therein and to effect the intent of the Loan Documents, all as fully and effectively as such Grantor might do.
 
(b)           If any Grantor fails to perform or comply with any Contractual Obligation contained herein, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such Contractual Obligation.
 
(c)           The expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 7.1 , together with interest thereon at a rate set forth in Section 2.6 ( Interest ) of the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable to the Collateral Agent in accordance with Section 4 of the Multiparty Agreement.
 
(d)           Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 7.1 . All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the Secured Obligations are indefeasibly paid in full.
 
Section 7.2                        Authorization to File Financing Statements . Each Grantor authorizes the Collateral Agent and its Related Persons, at any time and from time to time, to file or record financing statements, amendments thereto, and other filing or recording documents or instruments with respect to any Collateral in such form and in such offices as the Collateral Agent reasonably determines appropriate to perfect the security interests of the Collateral Agent under this Agreement, and such financing statements and amendments may describe the Collateral covered thereby as "all assets of the debtor". A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction. Such Grantor also hereby ratifies its authorization for the Collateral Agent to have filed any initial financing statement or amendment thereto under the UCC (or other similar laws) in effect in any jurisdiction if filed prior to the date hereof.
 
Section 7.3                        Authority of Collateral Agent .   Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such authority.

 
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Section 7.4                        Duty: Obligations and Liabilities .
 
(a)            Duty of Collateral Agent . The Collateral Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. The powers conferred on the Collateral Agent hereunder are solely to protect the Collateral Agent's interest in the Collateral and shall not impose any duty upon the Collateral Agent to exercise any such powers. The Collateral Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Related Persons shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. In addition, the Collateral Agent shall not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Collateral Agent in good faith.
 
(b)            Obligations and Liabilities with respect to Collateral . No Secured Party and no Related Person thereof shall be liable for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any Collateral. The powers conferred on the Collateral Agent hereunder shall not impose any duty upon any other Secured Party to exercise any such powers. The other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
 
ARTICLE 8
 
MISCELLANEOUS
 
Section 8.1                        Reinstatement . Each Grantor agrees that, if any payment made by any Loan Party or other Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured Party to such Loan Party, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect as fully as if such payment had never been made. If, prior to any of the foregoing, (a) any Lien or other Collateral securing such Grantor's liability hereunder shall have been released or terminated by virtue of the foregoing or (b) any provision of the Guaranty hereunder shall have been terminated, cancelled or surrendered, such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.

 
-25-

 
 
Section 8.2                        Release of Collateral .
 
(a)           At the time provided in clause (iii) of Section 10.11(b) of the Credit Agreement, the Collateral shall be released from the Lien created hereby and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. Each Grantor is hereby authorized to file at such time UCC amendments and any other necessary documents evidencing the termination of the Liens so released. At the request of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral of such Grantor held by the Collateral Agent hereunder and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.
 
(b)           If the Collateral Agent shall be directed or permitted pursuant to clause (i) or (ii) of Section 10.11(b) of the Credit Agreement to release any Lien or any Collateral, such Collateral shall be released from the Lien created hereby to the extent provided under, and subject to the terms and conditions set forth in, such clauses (i) and (ii) . In connection therewith, the Collateral Agent, at the request of any Grantor, shall execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such release.
 
(c)           At the time provided in Section 10.11(a) of the Credit Agreement and at the request of the Borrower, a Grantor shall be released from its obligations hereunder in the event that all the Securities of such Grantor shall be Sold to any Person that is not an Affiliate of Holdings, the Borrower and the Subsidiaries of the Borrower in a transaction permitted by the Loan Documents.
 
Section 8.3                        Independent Obligations . The obligations of each Grantor hereunder are independent of and separate from the Secured Obligations and the Guaranteed Obligations of any other Grantor. If any Secured Obligation or Guaranteed Obligation is not paid when due, or upon any Event of Default, the Collateral Agent may, at its sole election, proceed directly and at once, without notice, against any Grantor and any Collateral to collect and recover the full amount of any Secured Obligation or Guaranteed Obligation then due, without first proceeding against any other Grantor, any other Loan Party, any other guarantor or any other Collateral and without first joining any other Grantor, any other Loan Party or any other guarantor in any proceeding.
 
Section 8.4                        No Waiver by Course of Conduct . No Secured Party shall by any act (except by a written instrument pursuant to Section 8.5), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such Secured Party would otherwise have on any future occasion.
 
Section 8.5                        Amendments in Writing . None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance
 

 
-26-

 

with Section 11.1 of the Credit Agreement; provided, however, that annexes to this Agreement may be supplemented (but no existing provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder Agreements, in substantially the form of Annex 1 and Annex 2, respectively, in each case duly executed by the Collateral Agent and each Grantor directly affected thereby.
 
Section 8.6                        Additional Grantors; Additional Pledged Collateral .
 
(a)            Joinder Agreements . If, at the option of the Borrower or as required pursuant to Section 7.10 of the Credit Agreement, the Borrower shall cause any Subsidiary that is not a Grantor to become a Grantor hereunder, such Subsidiary shall execute and deliver to the Collateral Agent a Joinder Agreement substantially in the form of Annex 2 and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date.
 
(b)            Pledge Amendments . To the extent any Pledged Collateral has not been delivered as of the Effective Date, such Grantor shall deliver a pledge amendment duly executed by the Grantor in substantially the form of Annex 1 (each, a " Pledge Amendment "). Such Grantor authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement.
 
Section 8.7                        Notices . All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in Section 11.11 of the Credit Agreement; provided, however, that any such notice, request or demand to or upon any Grantor shall be addressed to the Borrower's notice address set forth in such Section 11.11.
 
Section 8.8                        Successors and Assigns . This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of each Secured Party and their successors and assigns; provided, however, that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent.
 
Section 8.9                        Counterparts . This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or by Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.
 
Section 8.10                        Severability . Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision in any other jurisdiction.
 
Section 8.11                        Governing Law . This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

 
-27-

 
 
Section 8.12                        WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING
WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.12.
 
Section 8.13                        Multiparty Agreement .   Notwithstanding anything to the contrary in this Agreement, the rights and remedies of the Collateral Agent (including the rights and remedies provided in Article 6 hereof) are in addition to, and not in lieu of, its rights and remedies under the Multiparty Agreement.
 
[SIGNATURE PAGES FOLLOW]
 

 
-28-

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written.
 

 
CINEDIGM DIGITAL FUNDING 2, LLC, as Grantor
 
 
 
   
By:
  /s/ Gary S. Loffredo
   
Name:
  Gary S. Loffredo
   
Title:
  General Counsel and Secretary




Signature Page to Guaranty and Security Agreement
 
 

 

ACCEPTED AND AGREED
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
as Collateral Agent

 
   
By:
/s/ Richard O. Knowlton
   
 
Richard O. Knowlton
Managing Director
 
   
       



Signature Page to Guaranty and Security Agreement
 
 

 

ANNEX 1
TO
GUARANTY AND SECURITY AGREEMENT 1
 
FORM OF PLEDGE AMENDMENT
 
This PLEDGE AMENDMENT, dated as of _____ ___, 20__, is delivered pursuant to Section 8.6 of the Guaranty and Security Agreement, dated as of October 18, 2011, by CINEDIGM DIGITAL FUNDING 2, LLC (the " Borrower "), the undersigned Grantor and the other Affiliates of the Borrower from time to time party thereto as Grantors in favor of Société Générale, New York Branch, as collateral agent for the Secured Parties referred to therein (the " Guaranty and Security Agreement "). Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.
 
The undersigned hereby agrees that this Pledge Amendment may be attached to the Guaranty and Security Agreement and that the Pledged Collateral listed on Annex 1-A to this Pledge Amendment shall be and become part of the Collateral referred to in the Guaranty and Security Agreement and shall secure all Secured Obligations of the undersigned.
 
The undersigned hereby represents and warrants that each of the representations and warranties contained in Sections 4.1 , 4.2 , 4.5 and 4.10 of the Guaranty and Security Agreement is true and correct in respect of the Pledged Collateral listed on Annex 1-A as of the date hereof as if made on and as of such date.
 
 

 
[GRANTOR]
 
 
 
   
By:
 
   
Name:
 
   
Title:
 



 


 
1 To be used for pledge of undelivered Pledged Collateral by existing Grantor.
 

Annex 1 to Guaranty and Security Agreement
-1-
 
 

 
 
 
ANNEX 1-A
 
PLEDGED STOCK
 
Issuer
Class
Certificate No(s)
Par Value
Number of Shares, Units or Interests
         
 
PLEDGED DEBT INSTRUMENTS
 
Issuer
Description of Debt
Certificate No(s)
Final Maturity
Principal Amount
         

 
 
 
ACKNOWLEDGED AND AGREED
 
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 

 

   
By:
     
Name:
     
Title:
     

 

 
Annex 1 to Guaranty and Security Agreement
-2-
 
 

 

ANNEX 2
TO
GUARANTY AND SECURITY AGREEMENT
 
FORM OF JOINDER AGREEMENT
 
This JOINDER AGREEMENT, dated as of _____ ___, 20__, is delivered pursuant to Section 8.6 of the Guaranty and Security Agreement, dated as of October 18, 2011, by CINEDIGM DIGITAL FUNDING 2, LLC (the " Borrower ") and the Affiliates of the Borrower from time to time party thereto as Grantors in favor of Société Générale, New York Branch, as collateral agent for the Secured Parties referred to therein (the " Guaranty and Security Agreement "). Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.
 
By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 8.6 of the Guaranty and Security Agreement, hereby becomes a party to the Guaranty and Security Agreement as a Grantor thereunder with the same force and effect as if originally named as a Grantor therein and, without limiting the generality of the foregoing, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of the undersigned, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned and expressly assumes all obligations and liabilities of a Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of the Guaranty and Security Agreement.
 
The information set forth in Annex 1-A is hereby added to the information set forth in Schedules 1 through 6 to the Guaranty and Security Agreement.  By acknowledging and agreeing to this Joinder Agreement, the undersigned hereby agree that this Joinder Agreement may be attached to the Guaranty and Security Agreement and that the Pledged Collateral listed on Annex 1-A to this Joinder Amendment shall be and become part of the Collateral referred to in the Guaranty and Security Agreement and shall secure all Secured Obligations of the undersigned.
 
The undersigned hereby represents and warrants that each of the representations and warranties contained in Article 4 of the Guaranty and Security Agreement applicable to it is true and correct on and as the date hereof as if made on and as of such date.
 

Annex 2 to Guaranty and Security Agreement
-1-
 
 

 

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.
 
 
 
[ADDITIONAL GRANTOR]
 
 
 
   
By:
 
   
Name:
 
   
Title:
 


                                                               

Annex 2 to Guaranty and Security Agreement
-2-
 
 

 

 
ACKNOWLEDGED AND AGREED
as of the date first above written:

CINEDIGM DIGITAL FUNDING 2, LLC,
as Grantor
 

   
By:
     
Name:
     
Title:
     

 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 

   
By:
     
Name:
     
Title:
     


 

Annex 2 to Guaranty and Security Agreement
-3-
 
 

 

ANNEX 1-A
 
[Description of Collateral to be added to Schedules 1 through 6 to the Guaranty and Security Agreement]
 

 

Annex 2 to Guaranty and Security Agreement
-4-
 
 

 

ANNEX 3
TO
GUARANTY AND SECURITY AGREEMENT
 
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
 
THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of _____ ___, 20__, is made by each of the entities listed on the signature pages hereof (each a " Grantor " and, collectively, the " Grantors "), in favor of Société Générale, New York Branch, as collateral agent (in such capacity, together with its successors and permitted assigns, the " Collateral Agent ") for the Secured Parties (as defined in the Credit Agreement referred to below).
 
W I T N E S S E T H:
 
WHEREAS, pursuant to the Credit Agreement, dated as of October 18, 2011 (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the " Credit Agreement "), among Cinedigm Digital Funding 2, LLC (the " Borrower "), the Lenders, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders and the other Secured Parties, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;
 
WHEREAS, pursuant to a Guaranty and Security Agreement of even date herewith in favor of the Collateral Agent (the " Guaranty and Security Agreement "), each Grantor (other than the Borrower) has agreed to guarantee the Guaranteed Obligations (as defined therein) and each Grantor has agreed to grant a security interest in its assets to secure the Secured Obligations (as defined therein); and
 
WHEREAS, all of the Grantors are party to the Guaranty and Security Agreement pursuant to which the Grantors are required to execute and deliver this [Copyright] [Patent] [Trademark] Security Agreement;
 
NOW, THEREFORE, in consideration of the premises and to induce the Lenders and the Collateral Agent to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
 
Section 1.                       Defined Terms . Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.
 
Section 2.                       Grant of Security Interest in [Copyright] [Trademark] [Patent] Collateral . Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and under the following Collateral of such Grantor (the " [Copyright] [Trademark] [Patent] Collateral "):
 

Annex 3 to Guaranty and Security Agreement
-1-
 
 

 

(a)           [all of its Copyrights and all IP Licenses providing for the grant by or to such Grantor of any right under any Copyright, including, without limitation, those referred to on Schedule 1 hereto;
 
(b)           all renewals, reversions and extensions of the foregoing; and
 
(c)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
or
 
(a)           [all of its Patents and all IP Licenses providing for the grant by or to such Grantor of any right under any Patent, including, without limitation, those referred to on Schedule 1 hereto;
 
(b)           all reissues, reexaminations, continuations, continuations-in-part, divisionals, renewals and extensions of the foregoing; and
 
(c)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
or
 
(d)           [all of its Trademarks and all IP Licenses providing for the grant by or to such Grantor of any right under any Trademark, including, without limitation, those referred to on Schedule 1 hereto;
 
(e)           all renewals and extensions of the foregoing;
 
(f)           all goodwill of the business connected with the use of, and symbolized by, each such Trademark; and
 
(g)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
Section 3.                       Guaranty and Security Agreement . The security interest granted pursuant to this [Copyright] [Patent] [Trademark] Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Guaranty and Security Agreement and each Grantor hereby acknowledges and agrees that the rights and remedies of the Collateral Agent with respect to the security interest in the [Copyright] [Patent] [Trademark] Collateral made and granted hereby are more fully set forth in the Guaranty and Security
 

Annex 3 to Guaranty and Security Agreement
-2-
 
 

 

Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
 
Section 4.                       Grantor Remains Liable . Each Grantor hereby agrees that, anything herein to the contrary notwithstanding, such Grantor shall assume full and complete responsibility for the prosecution, defense, enforcement or any other necessary or desirable actions in connection with their [Copyrights] [Patents] [Trademarks] and IP Licenses subject to a security interest hereunder.
 
Section 5.                       Counterparts . This [Copyright] [Patent] [Trademark] Security Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.
 
Section 6.                       Governing Law . This [Copyright] [Patent] [Trademark] Security Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 
[SIGNATURE PAGES FOLLOW]
 

Annex 3 to Guaranty and Security Agreement
-3-
 
 

 

IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent] [Trademark] Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.
 
 
 
Very truly yours,
 
[GRANTOR], as Grantor
 
 
 
   
By:
 
   
Name:
 
   
Title:
 

ACCEPTED AND AGREED
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 
 
   
By:
     
Name:
     
Title:
     




Annex 3 to Guaranty and Security Agreement
-4-
 
 

 

ACKNOWLEDGMENT OF GRANTOR
 
STATE OF ____________________
)
 
 
) ss.
 
COUNTY OF __________________
)
 
 
On this ___ day of _____ ___, 20__ before me personally appeared _____ proved to me on the basis of satisfactory evidence to be the person who executed the foregoing instrument on behalf of _____, who being by me duly sworn did depose and say that he is an authorized officer of said corporation, that the said instrument was signed on behalf of said corporation as authorized by its Board of Directors and that he acknowledged said instrument to be the free act and deed of said corporation.
 
 
 
 
   
 
 
   
 
  Notary Public
   
 
 
 
 
 

 
Annex 3 to Guaranty and Security Agreement
-5-
 
 

 

SCHEDULE I
TO
[COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT
 
[Copyright] [Patent] [Trademark] Registrations
 
A.           REGISTERED [COPYRIGHTS] [PATENTS] [TRADEMARKS]
 
[Include Registration Number and Date]
 
B.           [COPYRIGHT] [PATENT] [TRADEMARK] APPLICATIONS
 
[Include Application Number and Date]
 
C.           IP LICENSES
 
[Include complete legal description of agreement (name of agreement, parties and date)]
 

 

Annex 3 to Guaranty and Security Agreement
-6-
 
 

 

SCHEDULE 1 – COMMERCIAL TORT CLAIMS
 
None
 
 
 
 
 

Schedule 1 to Guaranty and Security Agreement
-1-
 
 

 

SCHEDULE 2 – FILINGS
 
UCC Financing Statement covering all of assets of Cinedigm Digital Funding 2, LLC (as debtor) and naming Société Générale, New York Branch, as collateral agent, on behalf of  the Secured Parties, to be filed with the Delaware Secretary of State.
 
 
 
 
 

Schedule 2 to Guaranty and Security Agreement
-1-
 
 

 

SCHEDULE 3 – JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE
 
 
Legal Name:
Cinedigm Digital Funding 2, LLC
   
Jurisdiction of Organization:
Delaware
   
Organizational Identification Number:
5023164
   
Chief Executive Office:
Cinedigm Digital Funding 2, LLC
55 Madison Avenue, Suite 300
Morristown, NJ 07960
   
Any other Jurisdiction of Organization, Legal Name or Chief
Executive Office in the past five years:
 
None

 
 

Schedule 3 to Guaranty and Security Agreement
-1-
 
 

 

SCHEDULE 4 – LOCATION OF INVENTORY AND EQUIPMENT
 
Inventory
 
None
 
Equipment
 
Name of Theatre
Address
City
State and Zip Code
Screen #
College Square
6301 University Avenue
Cedar Falls
IA 50613
12
Coral Ridge Cinema
1451 Coral Ridge Avenue
Coralville
IA 52241
10
Crossroads Cinema
2450 Crossroads Blvd.
Waterloo
IA 50702
12
Sycamore Cinema
1602 Sycamore Street
Iowa City
IA 52240
12
Addison Cinemas
1555 West Lake Street
Addison
IL 60101
21
Chicago Heights Cinema
1301 Hilltop Avenue
Chicago Heights
IL 60411
14
Elgin Cinema
111 South Randall Road
Elgin
IL 60123
15
Gurnee Cinema
6144 Grand Avenue
Gurnee
IL 60031
20
Orland Park Cinemas
16350 South LaGrange Road
Orland Park
IL 60467
15
Duluth Cinema
300 Harbor Drive
Duluth
MN 55802
10
Elk River Cinema
570 Freeport
Elk River Mall
Elk River
MN 55330
17
Hastings Cinema
1325 South Frontage Road
Hastings
MN 55033
9
Lakes Cinema
4351 Stebner Road
Hermantown
MN 55811
10
Oakdale Cinema
5677 Hadley Avenue
Oakdale
MN 55128
17
Parkwood Cinema
1533 Frontage Road
North Waite Park
MN 56387
17
Rosemount Cinema
15280 Carrousel Way
Rosemount
MN 55068
8
Shakopee Cinema
1116 Shakopee Town Square
Shakopee
MN 55379
11
Century Cinema
3931 9th Avenue SW
Fargo
ND 58103
10
West Acres Cinema
4101 17th Avenue SW
Fargo
ND 58103
14
20 Grand Cinemas
14304 West Maple Road
Omaha
NE 68164
19
Edgewood Cinema
5220 South 56th Street
Lincoln
NE 68516
6
Lincoln Grand Cinema
1101 P Street
Lincoln Grand
NE 68508
14
South Pointe Cinema
2920 Pine Lake Road
Lincoln
NE 68516
6
Twin Creek Cinema
3909 Raynor Parkway
Bellevue
NE 68123
16
Village Pointe Cinema
304 North 174th Street
Omaha
NE 68118
16
Crosswoods Cinema
200 Hutchinson Avenue
Columbus
OH 43234
17
Pickerington Cinema
1776 Hill Road North
Pickerington
OH 43147
17
Appleton East Cinema
W3091 Van Roy Road
Appleton
WI 54915
16
 
 

 
Schedule 4 to Guaranty and Security Agreement
-1-
 
 

 

 
Name of Theatre
Address
City
State and Zip Code
Screen #
Bay Park Cinema
755 Willard Drive
Green Bay
WI 54324
16
Campus Ripon
103 Watson Street
Ripon
WI 54971
1
Cedar Creek Cinema
10101 Market Street, Box D20
Rothschild
WI 54474
10
La Crosse Cinema
2032 Warci Avenue
La Crosse
WI 54601
11
Eastgate Cinema
5202 High Crossing Blvd.
Madison
WI 53704
16
Green Bay East Cinema
100Q Kepler Drive
Green Bay
WI 54311
12
Hillside Cinema
2950 Hillside Drive
Delafield
WI 53018
14
Hollywood Cinema — Grand Chute
513 North Westhill Blvd.
Grand Chute
WI 54914
14
Majestic Cinema of Brookfield
770 North Springdale Road
Waukesha
WI 53186
16
Menomonee Falls Cinema
W180 N9393 Premier Lane
Menomonee Falls
WI 53051
16
North Shore Cinema
11700 North Port Washington Road
Mequon
WI 53092
11
Oshkosh Cinema
340 South Koeller Street
Oshkosh
WI 54902
12
Point Cinema
7825 Big Sky Drive
Madison
WI 53719
15
Renaissance Cinema
10411 Washington Avenue
Sturtevant
WI 53177
13
Ridge Cinema
5200 South Moorland Road
New Berlin
WI 53151
19
Saukville Cinema
350 S. Riverside Drive
Saukville
WI 53080
12
Sheboygan Cinema
3226 Kohler Memorial Drive
Sheboygan
WI 53081
13
South Shore Cinema
7261 South 13th Street
Oak Creek
WI 53154
16
 
 

 
BOOKS AND RECORDS
 
Cinedigm Digital Funding 2, LLC
55 Madison Avenue, Suite 300
Morristown, NJ 07960
 
 
 
 

Schedule 4 to Guaranty and Security Agreement
-2-
 
 

 

SCHEDULE 5 – PLEDGED COLLATERAL
 
None
 

Schedule 5 to Guaranty and Security Agreement
-1-
 
 

 

SCHEDULE 6 – INTELLECTUAL PROPERTY
 
Cinedigm Digital Funding 2, LLC licenses Access Digital Media Inc.'s proprietary Theatre Command Center Software pursuant to that certain Software License Agreement, dated as of  October 18, 2011, by and among Access Digital Media, Inc., as licensor, CDF2 Holdings, LLC, as licensee and Cinedigm Digital Funding 2, LLC, as licensee.
 
Cinedigm Digital Funding 2, LLC licenses Hollywood Software Inc.'s proprietary software products pursuant to that certain Software License Agreement, dated as of  October 18, 2011, by and between Hollywood Software Inc., as licensor, CDF2 Holdings, LLC, as licensee and Cinedigm Digital Funding 2, LLC, as licensee.
 


Schedule 6 to Guaranty and Security Agreement
-1-
 
 

 

EXHIBIT 4.1
 
 
 
 
 
 
 
 
 
 
EXECUTION VERSION
 
 



 
GUARANTY AND SECURITY AGREEMENT
 
DATED AS OF OCTOBER 18, 2011
 
AMONG
 
CINEDIGM DIGITAL FUNDING 2, LLC ,
 
AND
 
EACH GRANTOR
 
FROM TIME TO TIME PARTY HERETO
 
AND
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
AS COLLATERAL AGENT

 



 

 
 
 

 
ARTICLE 1
 
DEFINED TERMS
 
 
Section 1.1
 
Definitions
 
 
Section 1.2
 
Certain Other Terms
 
 
ARTICLE 2
 
GUARANTY
 
 
Section 2.1
 
Guaranty
 
 
Section 2.2
 
Limitation of Guaranty
 
 
Section 2.3
 
Contribution
 
 
Section 2.4
 
Authorization; Other Agreements
 
 
Section 2.5
 
Guaranty Absolute and Unconditional
 
 
Section 2.6
 
Waivers
 
 
Section 2.7
 
Reliance
 
 
ARTICLE 3
 
GRANT OF SECURITY INTEREST
 
 
Section 3.1
 
Collateral
 
 
Section 3.2
 
Grant of Security Interest in Collateral
 
 
ARTICLE 4
 
REPRESENTATIONS AND WARRANTIES
 
 
Section 4.1
 
Title; No Other Liens
 
 
Section 4.2
 
Perfection and Priority
 
 
Section 4.3
 
Jurisdiction of Organization; Chief Executive Office
 
 
Section 4.4
 
Locations of Inventory; Equipment and Books and Records
 
 
Section 4.5
 
Pledged Collateral
 
 
Section 4.6
 
Instruments and Tangible Chattel Paper Formerly Accounts
 
 
Section 4.7
 
Intellectual Property
 
 
Section 4.8
 
Commercial Tort Claims
 
 
Section 4.9
 
Specific Collateral
 
 
Section 4.10
 
Enforcement
 
 
Section 4.11
 
Solvency
 
 
Section 4.12
 
Representations and Warranties of the Credit Agreement
 
 
ARTICLE 5
 
COVENANTS
 
 
Section 5.1
 
Maintenance of Perfected Security Interest; Further Documentation and Consents
 
 
 
 

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TABLE OF CONTENTS
(continued)
Page
 
 
Section 5.2
 
Changes in Locations, Name, Etc
 
 
Section 5.3
 
Pledged Collateral
 
 
Section 5.4
 
Accounts
 
 
Section 5.5
 
Commodity Contracts
 
 
Section 5.6
 
Delivery of Instruments and Tangible Chattel Paper and
Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper
 
 
 
Section 5.7
 
Intellectual Property
 
 
Section 5.8
 
Notices
 
 
Section 5.9
 
Notice of Commercial Tort Claims
 
 
Section 5.10
 
Compliance with Credit Agreement
 
 
ARTICLE 6
 
REMEDIAL PROVISIONS
 
 
Section 6.1
 
Code and Other Remedies
 
 
Section 6.2
 
Accounts and Payments in Respect of General Intangibles;
Contracts
 
 
Section 6.3
 
Pledged Collateral
 
 
Section 6.4
 
Contracts
 
 
Section 6.5
 
Proceeds to be Turned over to and Held by Collateral Agent
 
 
Section 6.6
 
Registration Rights
 
 
Section 6.7
 
Deficiency
 
 
ARTICLE 7
 
THE COLLATERAL AGENT
 
 
Section 7.1
 
Collateral Agent's Appointment as Attorney-in-Fact
 
 
Section 7.2
 
Authorization to File Financing Statements
 
 
Section 7.3
 
Authority of Collateral Agent
 
 
Section 7.4
 
Duty: Obligations and Liabilities
 
 
ARTICLE 8
 
MISCELLANEOUS
 
 
Section 8.1
 
Reinstatement
 
 
Section 8.2
 
Release of Collateral
 
 
Section 8.3
 
Independent Obligations
 
 
Section 8.4
 
No Waiver by Course of Conduct
 
 
Section 8.5
 
Amendments in Writing
 
 
 
 

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TABLE OF CONTENTS
(continued)
Page
 
Section 8.6
 
Additional Grantors; Additional Pledged Collateral
 
 
Section 8.7
 
Notices
 
 
Section 8.8
 
Successors and Assigns
 
 
Section 8.9
 
Counterparts
 
 
Section 8.10
 
Severability
 
 
Section 8.11
 
Governing Law
 
 
Section 8.12
 
WAIVER OF JURY TRIAL
 
 
Section 8.13
 
Multiparty Agreement
 
 
 
 

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ANNEXES AND SCHEDULES
 
 
 
Annex 1
-
Form of Pledge Amendment
 
Annex 2
-
Form of Joinder Agreement
 
Annex 3
-
Form of Intellectual Property Security Agreement
       
 
Schedule 1
-
Commercial Tort Claims
 
Schedule 2
-
Filings
 
Schedule 3
-
Jurisdiction of Organization; Chief Executive Office
       
 
Schedule 4
-
Location of Inventory and Equipment
 
Schedule 5
-
Pledged Collateral
 
Schedule 6
-
Intellectual Property
 
 
-iv-
 
 

 

GUARANTY AND SECURITY AGREEMENT
 
GUARANTY AND SECURITY AGREEMENT, dated as of October 18, 2011, by CINEDIGM DIGITAL FUNDING 2, LLC, a Delaware limited liability company (the " Borrower "), and each of the other entities that becomes a party hereto pursuant to Section 8.6 (together with the Borrower, the " Grantors "), in favor of Société Générale, New York Branch, as collateral agent (in such capacity, together with its successors and permitted assigns, the " Collateral Agent ") for the Lenders and each other Secured Party (each as defined in the Credit Agreement referred to below).
 
W I T N E S S E T H:
 
WHEREAS, pursuant to the Credit Agreement dated as of October 18, 2011 (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the " Credit Agreement ") among the Borrower, the Lenders, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders and the other Secured Parties, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;
 
WHEREAS, each Grantor (other than the Borrower) has agreed to guaranty the Secured Obligations (as hereinafter defined) of the Borrower;
 
WHEREAS, each Grantor will derive substantial direct and indirect benefits from the making of the extensions of credit under the Credit Agreement; and
 
WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent;
 
NOW, THEREFORE, in consideration of the premises and to induce the Lenders and the Collateral Agent to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
 
ARTICLE 1
 
DEFINED TERMS
 
Section 1.1                        Definitions .
 
(a)           Capital terms used herein without definition are used as defined in the Credit Agreement.
 
(b)           The following terms have the meanings given to them in the UCC and terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC (such meanings to be equally applicable to both the singular and plural forms of the terms defined): " account ", " account debtor ", " as-extracted collateral ", " certificated security ", " chattel paper ", " commercial tort claim ", " commodity contract ", " deposit account ", " electronic chattel paper ", " equipment ", " farm products ", " fixture ", " general intangible ", " goods ", " health-care-
 

 
 

 

insurance receivable ", " instruments ", " inventory ", " investment property ", " letter-of-credit right ", " proceeds ", " record ", " securities account ", " security ", " supporting obligation " and " tangible chattel paper ".
 
(c)           The following terms shall have the following meanings:
 
" Agreement " means this Guaranty and Security Agreement.
 
" Applicable IP Office " means the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency within or outside the United States.
 
" Collateral " has the meaning specified in Section 3.1 .
 
" Contracts " means all contracts, undertakings, or agreements (other than rights evidenced by chattel paper, documents or instruments) to which any Grantor now is, or hereafter will be, bound, or a party, beneficiary or assignee, in any event, including all contracts, undertakings, or agreements in or under which any Grantor may now or hereafter have any right, title or interest, including each Digital Cinema Deployment Agreement, each Exhibitor Agreement, each Supply Agreement, the Management Services Agreement, each CDF2 Loan Document and each CHG Lease Facility Document, and any agreement relating to the terms of payment or the terms of performance of any account.
 
" Fraudulent Transfer Laws " has the meaning specified in Section 2.2 .
 
" Guaranteed Obligations " has the meaning specified in Section 2.1 .
 
" Guarantor " means each Grantor other than the Borrower.
 
" Guaranty " means the guaranty of the Guaranteed Obligations made by the Guarantors as set forth in this Agreement.
 
" Pledged Certificated Stock " means all certificated securities and any other Stock or Stock Equivalent of any Person evidenced by a certificate, instrument or other similar document (as defined in the UCC), in each case owned by any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Stock and Stock Equivalents set forth on Schedule 5 .
 
" Pledged Collateral " means, collectively, the Pledged Stock and the Pledged Debt Instruments.
 
" Pledged Debt Instruments " means all right, title and interest of any Grantor in instruments evidencing any Indebtedness owed to such Grantor or other obligations, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including each CDF2 Loan Document and all Indebtedness set forth on Schedule 5 , issued by the obligors named therein.
 

 
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" Pledged Investment Property " means any investment property owned by any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, other than any Pledged Stock or Pledged Debt Instruments.
 
" Pledged Stock " means all Pledged Certificated Stock and all Pledged Uncertificated Stock.
 
" Pledged Uncertificated Stock " means any Stock or Stock Equivalent of any Person owned by any Grantor that is not Pledged Certificated Stock, including all right, title and interest of any Grantor as a limited or general partner in any partnership not constituting Pledged Certificated Stock or as a member of any limited liability company, all right, title and interest of any Grantor in, to and under any Constituent Document of any partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including in each case those interests set forth on Schedule 5 , to the extent such interests are not certificated.
 
" Secured Obligations " has the meaning specified in Section 3.2 .
 
" Software " means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing.
 
" UCC " means the Uniform Commercial Code as from time to time in effect in the State of New York; provided , however , that, in the event that, by reason of mandatory provisions of any applicable Requirement of Law, any of the attachment, perfection or priority of the Collateral Agent's or any other Secured Party's security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction other than the State of New York, " UCC " shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions.
 
" Vehicles " means all vehicles covered by a certificate of title law of any state.
 
Section 1.2                        Certain Other Terms .
 
(a)           The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. References herein to an Annex, Schedule, Article, Section or clause refer to the appropriate Annex or Schedule to, or Article, Section or clause in this Agreement. Where the context requires, provisions relating to any Collateral when used in relation to a Grantor shall refer to such Grantor's Collateral or any relevant part thereof.
 
(b)            Section 1.5 of the Credit Agreement is applicable to this Agreement as and to the extent set forth therein.
 

 
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ARTICLE 2
 
GUARANTY
 
Section 2.1                        Guaranty . To induce the Lenders to make the Loans, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the Obligations of the Borrower whether existing on the date hereof or hereinafter incurred or created (other than obligations owing to SG under the SG Advisory Fee Note) (the "Guaranteed Obligations"). This Guaranty by each Guarantor hereunder constitutes a guaranty of payment and not of collection.
 
Section 2.2                        Limitation of Guaranty . Any term or provision of this Guaranty or any other Loan Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable hereunder shall not exceed the maximum amount for which such Guarantor can be liable without rendering this Guaranty or any other Loan Document, as it relates to such Guarantor, subject to avoidance under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title 11 of the United States Code or any applicable provisions of comparable Requirements of Law) (collectively, "Fraudulent Transfer Laws"). Any analysis of the provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established in Section 2.3 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under the Guaranty.
 
Section 2.3                        Contribution . To the extent that any Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a) the amount of the economic benefit actually received by such Guarantor from the Loans and other Guaranteed Obligations and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by the Borrower) in the same proportion as such Guarantor's net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.
 
Section 2.4                        Authorization; Other Agreements . The Secured Parties are hereby authorized, without notice to or demand upon any Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability hereunder, from time to time, to do each of the following:
 
(a)           (i) modify, amend, supplement or otherwise change, (ii) accelerate or otherwise change the time of payment of or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation or any Loan Document;
 
(b)           apply to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in such order as provided in the Loan Documents;
 

 
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(c)           refund at any time any payment received by any Secured Party in respect of any Guaranteed Obligation in such Secured Party's reasonable discretion;
 
(d)           (i) Sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise alter or release any Collateral for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add, release or substitute any one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner with the Borrower and any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and
 
(e)           settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.
 
Section 2.5                        Guaranty Absolute and Unconditional . Each Guarantor hereby waives and agrees not to assert any defense, whether arising in connection with or in respect of any of the following or otherwise, and hereby agrees that its obligations under this Guaranty are irrevocable, absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the following (which may not be pleaded and evidence of which may not be introduced in any proceeding with respect to this Guaranty, in each case except as otherwise agreed in writing by the Collateral Agent):
 
(a)           the invalidity or unenforceability of any obligation of the Borrower or any other Guarantor under any Loan Document or any other agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any security for the Guaranteed Obligations or any part thereof;
 
(b)           the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from the Borrower or any other Guarantor or other action to enforce the same or (ii) any action to enforce any Loan Document or any Lien thereunder;
 
(c)           the failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to, any Collateral;
 
(d)           any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against the Borrower, any other Guarantor or any of the Borrower's other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;
 
(e)           any foreclosure, whether or not through judicial sale, and any other Sale of any Collateral or any election following the occurrence of an Event of Default by any Secured Party to proceed separately against any Collateral in accordance with such Secured Party's rights under any applicable Requirement of Law; or
 

 
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(f)           any other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of the Borrower, any other Guarantor or any of the Borrower's other Subsidiaries, in each case other than the payment in full of the Guaranteed Obligations.
 
Section 2.6                        Waivers . Each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder including any of the following: (a) any demand for payment or performance and protest and notice of protest, (b) any notice of acceptance, (c) any presentment, demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming immediately due and payable and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any disability or other defense of the Borrower or any other Guarantor. Each Guarantor further unconditionally and irrevocably agrees, until indefeasible payment in full of the Guaranteed Obligations, not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against the Borrower or any other Guarantor by reason of any Loan Document or any payment made thereunder or (y) assert any claim, defense, setoff or counterclaim it may have against any other Loan Party or set off any of its obligations to such other Loan Party against obligations of such Loan Party to such Guarantor. No obligation of any Guarantor hereunder shall be discharged other than by complete performance.
 
Section 2.7                        Reliance . Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Borrower, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and each Guarantor hereby agrees that no Secured Party shall have any duty to advise any Guarantor of information known to it regarding such condition or any such circumstances. In the event any Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any such information to any Guarantor, such Secured Party shall be under no obligation to (a) undertake any investigation not a part of its regular business routine, (b) disclose any information that such Secured Party, pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to any Guarantor.
 
ARTICLE 3
 
GRANT OF SECURITY INTEREST
 
Section 3.1                        Collateral . For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests is collectively referred to as the " Collateral ":
 
(a)           all accounts, chattel paper, Contracts, deposit accounts (including any concentration account and Cash Management Account), securities accounts, documents (as
 

 
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defined in the UCC), equipment, general intangibles, instruments, inventory, investment property, and any supporting obligations related thereto;
 
(b)           the commercial tort claims described on Schedule 1 and on any supplement thereto received by the Collateral Agent pursuant to Section 5.9 ;
 
(c)           all books and records pertaining to the other property described in this Section 3.1 ;
 
(d)           all property of such Grantor held by any Secured Party, including all property of every description, in the custody of or in transit to such Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have any right or power, including but not limited to cash;
 
(e)           all other goods (including but not limited to fixtures) and personal property of such Grantor, whether tangible or intangible and wherever located;
 
(f)           any and all additions, accessions and improvements to, all substitutions and replacements for and all products of or derived from the foregoing; and
 
(g)           to the extent not otherwise included, all proceeds of the foregoing.
 
Section 3.2                        Grant of Security Interest in Collateral . Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all Obligations of such Grantor (other than the obligations of the Borrower owing to SG under the SG Advisory Fee Note) (the "Secured Obligations"), hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and under the Collateral of such Grantor.  Without limitation of the foregoing, each Grantor collaterally assigns all of such Grantor's right, title and interest in and to the Collateral to the Collateral Agent for the benefit of the holders of the Secured Obligations to secure the payment and performance of the Secured Obligations to the full extent that such a collateral assignment is possible under the relevant law.
 
ARTICLE 4
 
REPRESENTATIONS AND WARRANTIES
 
To induce the Lenders and the Collateral Agent to enter into the Loan Documents, each Grantor hereby represents and warrants each of the following to the Collateral Agent, the Lenders and the other Secured Parties:
 
Section 4.1                        Title; No Other Liens . Except for the Lien granted to the Collateral Agent pursuant to this Agreement and other Permitted Liens under any Loan Document (including Section 4.2), such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. Such Grantor (a) is the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien.
 

 
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Section 4.2                        Perfection and Priority . The security interest granted pursuant to this Agreement constitutes a valid and continuing perfected security interest in favor of the Collateral Agent in all Collateral subject, for the following Collateral, to the occurrence of the following: (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of the filings and other actions specified on Schedule 2 (which, in the case of all filings and other documents referred to on such schedule with respect to Collateral existing as of the Effective Date, have been delivered to the Collateral Agent in completed and duly authorized form), (ii) in the case of any deposit account, the execution of a Control Agreement, (iii) in the case of all Copyrights, Trademarks and Patents for which UCC filings are insufficient, all appropriate filings having been made with the United States Copyright Office or the United States Patent and Trademark Office, as applicable, (iv) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of a Contractual Obligation granting control under the UCC to the Collateral Agent over such letter-of-credit rights, (v) in the case of electronic chattel paper, the completion of all steps necessary to grant control to the Collateral Agent over such electronic chattel paper under the UCC and (vi) in the case of Vehicles, the actions required under Section 5.1(e). Such security interest shall be prior to all other Liens on the Collateral except for Customary Permitted Liens having priority over the Collateral Agent's Lien by operation of law or unless otherwise permitted by any Loan Document upon (i) in the case of all Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property, the delivery thereof to the Collateral Agent of such Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property consisting of instruments and certificates, in each case properly endorsed for transfer to the Collateral Agent or in blank, (ii) in the case of all Pledged Investment Property not in certificated form, the execution of Control Agreements with respect to such investment property and (iii) in the case of all other instruments and tangible chattel paper that are not Pledged Certificated Stock, Pledged Debt Instruments or Pledged Investment Property, the delivery thereof to the Collateral Agent of such instruments and tangible chattel paper. Except as set forth in this Section 4.2, as of the Effective Date all actions by each Grantor necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken. Upon the taking of the action described in this Section 4.2, such security interest shall be prior to all other Liens on the Collateral except for Customary Permitted Liens having priority over the Collateral Agent's Lien by operation of law or unless otherwise permitted by any Loan Document.
 
Section 4.3                        Jurisdiction of Organization; Chief Executive Office . Such Grantor's jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Grantor's chief executive office or sole place of business, in each case as of the date hereof, is specified on Schedule 3 and such Schedule 3 also lists all jurisdictions of incorporation, legal names and locations of such Grantor's chief executive office or sole place of business for the five years preceding the date hereof.
 
Section 4.4                        Locations of Inventory; Equipment and Books and Records . On the date hereof, such Grantor's inventory and equipment (other than inventory or equipment in transit) and books and records concerning the Collateral are kept at the locations listed on Schedule 4 and such Schedule 4 also lists the locations of such inventory, equipment and books and records for the five years preceding the date hereof.
 

 
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Section 4.5                        Pledged Collateral .
 
(a)           The Pledged Stock pledged by such Grantor hereunder (i) is listed on Schedule 5 and constitutes (or, in respect of Pledged Stock, the issuer of which is not a Subsidiary of or otherwise controlled by such Grantor, to such Grantor's knowledge constitutes) that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on Schedule 5 , and (ii) with respect to Pledged Stock, the issuer of which is a Subsidiary of or otherwise controlled by such Grantor, has been duly authorized, validly issued and is fully paid and nonassessable (other than Pledged Stock in limited liability companies and partnerships) and (iii) to the extent constituting an obligation, constitutes the legal, valid and binding obligation of the issuer thereof with respect thereto, enforceable in accordance with its terms.
 
(b)           As of the Effective Date, all Pledged Collateral (other than Pledged Uncertificated Stock) and all Pledged Investment Property consisting of instruments and certificates in existence as of the Effective Date have been delivered to the Collateral Agent in accordance with Section 5.3(a) .
 
(c)           Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall be entitled to exercise all of the rights of the Grantor granting the security interest in any Pledged Stock, and a transferee or assignee of such Pledged Stock shall become a holder of such Pledged Stock to the same extent as such Grantor and shall be entitled to participate in the management of the issuer of such Pledged Stock to the same extent as such Grantor and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.
 
Section 4.6                        Instruments and Tangible Chattel Paper Formerly Accounts . No amount payable to such Grantor under or in connection with any account is evidenced by any instrument or tangible chattel paper involving an amount in excess of $250,000 in the aggregate at any one time that has not been delivered to the Collateral Agent, properly endorsed for transfer, to the extent delivery is required by Section 5.6(a).
 
Section 4.7                        Intellectual Property .
 
(a)            Schedule 6 sets forth a true and complete list of the following Intellectual Property such Grantor owns, licenses or otherwise has the right to use:  (i) Intellectual Property that is registered or subject to applications for registration, (ii) Internet Domain Names and (iii) other Intellectual Property and material Software, separately identifying that owned and licensed to such Grantor and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by the Grantor with respect thereto.
 
(b)           On the Effective Date, all Intellectual Property owned by such Grantor is valid, in full force and effect, subsisting, unexpired and enforceable, and no Intellectual Property has been abandoned. No breach or default of any IP License shall be caused by any of the following, and none of the following shall limit or impair the ownership, use, validity or enforceability of, or

 
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any rights of such Grantor in, any Intellectual Property material to the business of such Grantor: (i) the consummation of the transactions contemplated by any Loan Document or (ii) any holding, decision, judgment or order rendered by any Governmental Authority in existence as of the Effective Date.  As of the Effective Date, there are no pending (or, to the knowledge of such Grantor, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes challenging the ownership, use, validity, enforceability of, or such Grantor's rights in, any Intellectual Property material to the business of such Grantor.  As of the Effective Date, to such Grantor's knowledge, no Person has been or is infringing, misappropriating, diluting, violating or otherwise impairing any such Intellectual Property of such Grantor. Such Grantor, and to such Grantor's knowledge each other party thereto, is not in material breach or default of any material IP License.
 
Section 4.8                        Commercial Tort Claims . The only commercial tort claims of any Grantor existing on the date hereof (regardless of whether the amount, defendant or other material facts can be determined and regardless of whether such commercial tort claim has been asserted, threatened or has otherwise been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on Schedule 1, which sets forth such information separately for each Grantor.
 
Section 4.9                        Specific Collateral . None of the Collateral is or is proceeds or products of farm products, as-extracted collateral, health-care-insurance receivables or timber to be cut.
 
Section 4.10                        Enforcement . No Permit, notice to or filing with any Governmental Authority or any other Person or any consent from any Person is required for the exercise by the Collateral Agent of its rights (including voting rights) provided for in this Agreement or the enforcement of remedies in respect of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except as may be required in connection with the disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally or any approvals that may be required to be obtained from any bailees or landlords to collect the Collateral.
 
Section 4.11                       Solvency .   Grantor is Solvent on the date hereof and Grantor does not intend to incur or believe that it will incur, debts that will be beyond its ability to pay as such debts mature.
 
Section 4.12                       Representations and Warranties of the Credit Agreement . The representations and warranties as to such Grantor and its Subsidiaries made by the Borrower in Article IV of the Credit Agreement as of a certain date are true and correct as of such date.
 
ARTICLE 5
 
COVENANTS
 
Each Grantor agrees with the Collateral Agent to the following, as long as any Secured Obligation or Commitment remains outstanding and, in each case, unless the Required Lenders otherwise consent in writing:

 
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Section 5.1                        Maintenance of Perfected Security Interest; Further Documentation and Consents .
(a)           Such Grantor shall (i) not use or permit any Collateral to be used in violation of any provision of any Loan Document, any Requirement of Law in any material respect or any policy of insurance covering the Collateral and (ii) not enter into any Contractual Obligation or undertaking restricting the right or ability of such Grantor or the Collateral Agent to Sell any Collateral if such restriction would have a Material Adverse Effect.
 
(b)           Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4.2 and shall defend such security interest and such priority against the claims and demands of all Persons.
 
(c)           Pursuant to clause (ii) of Section 6.1(e) of the Credit Agreement, such Grantor shall furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other documents in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail and in form and substance satisfactory to the Collateral Agent.
 
(d)           At any time and from time to time, upon the written request of the Collateral Agent, such Grantor shall, for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, (i) promptly and duly execute and deliver, and have recorded, such further documents, including an authorization to file (or, as applicable, the filing) of any financing statement or amendment under the UCC (or other filings under similar Requirements of Law) in effect in any jurisdiction with respect to the security interest created hereby and (ii) take such further action as the Collateral Agent may reasonably request, including (A) securing all approvals necessary or appropriate for the assignment to or for the benefit of the Collateral Agent of any Contractual Obligation, including any IP License, held by such Grantor and to enforce the security interests granted hereunder and (B) executing and delivering any Control Agreements with respect to deposit accounts and securities accounts.
 
(e)           If requested by the Collateral Agent, the Grantor shall arrange for the Collateral Agent's first priority security interest to be noted on the certificate of title of each Vehicle and shall file any other necessary documentation in each jurisdiction that the Collateral Agent shall deem advisable to perfect its security interests in any Vehicle.
 
Section 5.2                        Changes in Locations, Name, Etc . Except upon 30 days' prior written notice to the Collateral Agent and delivery to the Collateral Agent of (a) all documents reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interests provided for herein and (b) if applicable, a written supplement to Schedule 4 showing any additional locations at which inventory or equipment shall be kept, such Grantor shall not do any of the following:
 
(i)           permit any inventory or equipment to be kept at a location other than those listed on Schedule 4 , except for inventory or equipment in transit;
 
(ii)           change its jurisdiction of organization or its location, in each case from that referred to in Section 4.3 ; or

 
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(iii)           change its legal name or organizational identification number, if any, or corporation, limited liability company, partnership or other organizational structure to such an extent that any financing statement filed in connection with this Agreement would become misleading.
 
Section 5.3                        Pledged Collateral .
 
(a)            Delivery of Pledged Collateral . Such Grantor shall (i) deliver to the Collateral Agent, in suitable form for transfer and in form and substance satisfactory to the Collateral Agent, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates and instruments evidencing Pledged Investment Property and (ii) maintain all other Pledged Investment Property in a Cash Collateral Account.
 
(b)            Event of Default . During the continuance of an Event of Default, the Collateral Agent shall have the right, at any time in its discretion and without notice to the Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any Pledged Investment Property and (ii) exchange any certificate or instrument representing or evidencing any Pledged Collateral or any Pledged Investment Property for certificates or instruments of smaller or larger denominations.
 
(c)            Cash Distributions with respect to Pledged Collateral . Except as provided in Article 6 , such Grantor shall be entitled to receive all cash, interest, dividends and distributions paid in respect of the Pledged Collateral or the Pledged Investment Property.
 
(d)            Voting Rights . Except as provided in Article 6 , such Grantor shall be entitled to exercise all voting, consent and corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral and the Pledged Investment Property; provided , however , that no vote shall be cast, consent given or right exercised or other action taken by such Grantor that would impair the Collateral or be inconsistent with or result in any violation of any provision of any Loan Document.
 
Section 5.4                        Accounts .
 
(a)           Such Grantor shall not without the Collateral Agent's prior written consent, other than in the ordinary course of business, (i) grant any extension of the time of payment of any account, (ii) compromise or settle any account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any account, (iv) allow any credit or discount on any account or (v) amend, supplement or modify any account in any manner that could adversely affect the value thereof.
 
(b)           The Collateral Agent shall have the right to make test verifications of the accounts in any manner and through any medium that it reasonably considers advisable, and such Grantor shall furnish all such assistance and information as the Collateral Agent may reasonably require in connection therewith, provided , however , that unless a Default shall be continuing, (i) the Collateral Agent shall request no more than four such reports during any calendar year and (ii) the Collateral Agent may not directly contact any account debtor without Guarantor's prior written consent. At any time and from time to time, upon the Collateral Agent's request, such Grantor shall cause independent public accountants or others satisfactory to the Collateral Agent

 
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to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the accounts; provided , however , that unless a Default shall be continuing, the Collateral Agent shall request no more than four such reports during any calendar year.
 
Section 5.5                        Commodity Contracts . Such Grantor shall not have any commodity contract other than with a Person approved by the Collateral Agent and subject to a Control Agreement .
 
Section 5.6                        Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper .
 
(a)           If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by an instrument or tangible chattel paper involving an amount in excess of $250,000 in the aggregate at any one time other than such instrument delivered in accordance with Section 5.3(a) and in the possession of the Collateral Agent, such Grantor shall mark all such instruments and tangible chattel paper with the following legend: "This writing and the obligations evidenced or secured hereby are subject to the security interest of Société Générale, New York Branch, as Collateral Agent" and, at the request of the Collateral Agent, shall immediately deliver such instrument or tangible chattel paper to the Collateral Agent, duly indorsed in a manner satisfactory to the Collateral Agent.
 
(b)           Such Grantor shall not grant "control" (within the meaning of such term under Section 9-106 of the UCC) over any investment property to any Person other than the Collateral Agent.
 
(c)           If such Grantor is or becomes the beneficiary of a letter of credit that is not a supporting obligation of any Collateral, such Grantor shall promptly, and in any event within 2 Business Days after becoming a beneficiary, notify the Collateral Agent thereof and enter into a Contractual Obligation with the Collateral Agent, the issuer of such letter of credit or any nominated person with respect to the letter-of-credit rights under such letter of credit. Such Contractual Obligation shall assign such letter-of-credit rights to the Collateral Agent in a manner sufficient to grant control for the purposes of Section 9-107 of the UCC (or any similar section under any equivalent UCC). Such Contractual Obligation shall also direct all payments thereunder to a Cash Collateral Account. The provisions of the Contractual Obligation shall be in form and substance reasonably satisfactory to the Collateral Agent.
 
(d)           If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by electronic chattel paper, such Grantor shall take all steps necessary to grant the Collateral Agent control of all such electronic chattel paper for the purposes of Section 9-105 of the UCC (or any similar section under any equivalent UCC) and all "transferable records" as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.
 
Section 5.7                        Intellectual Property .
 
(a)           Promptly (and in any event within 10 Business Days) after any change to Schedule 6 for such Grantor, such Grantor shall provide the Collateral Agent notification thereof
 

 
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and the short-form intellectual property agreements and assignments as described in this Section 5.7 and other documents that the Collateral Agent reasonably requests with respect thereto.
 
(b)           Such Grantor shall (and shall cause all its licensees to) (i) (1) continue to use each Trademark material to such Grantor's business included in the Intellectual Property in order to maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark is currently used, free from any claim of abandonment for non-use, (2) maintain at least the same standards of quality of products and services offered under such Trademark as are currently maintained, (3) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, and (4) not adopt or use any other Trademark that is confusingly similar or a colorable imitation of such Trademark unless the Collateral Agent shall obtain a perfected security interest in such other Trademark pursuant to this Agreement and (ii) not do any act or omit to do any act whereby, (w) any Trademark material to such Grantor's business (or any goodwill associated therewith) may become destroyed, invalidated, impaired or harmed in any way, (x) any Patent material to such Grantor's business included in the Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, (y) any portion of the Copyrights material to such Grantor's business included in the Intellectual Property may become invalidated, otherwise impaired or fall into the public domain or (z) any Trade Secret material to such Grantor's business that is Intellectual Property may become publicly available or otherwise unprotectable.
 
(c)           Such Grantor shall notify the Collateral Agent promptly if it knows that any application or registration relating to any Intellectual Property material to the business of such Grantor may become forfeited, misused, unenforceable, abandoned or dedicated to the public, or of any adverse determination or development regarding the validity or enforceability of such Grantor's ownership of, interest in, right to use, register, own or maintain any such Intellectual Property (including the institution of, or any such determination or development in, any proceeding relating to the foregoing in any Applicable IP Office). Such Grantor shall take all actions that are necessary or reasonably requested by the Collateral Agent to maintain and pursue each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation included in the Intellectual Property material to the business of such Grantor.
 
(d)           Such Grantor shall not knowingly do any act or knowingly omit to do any act to infringe, misappropriate, dilute, violate or otherwise impair the Intellectual Property of any other Person. In the event that any Intellectual Property of such Grantor is or has been infringed, misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall take such action as it reasonably deems appropriate under the circumstances in response thereto, including promptly bringing suit and recovering all damages therefor to the extent it is commercially reasonable to do so.
 
(e)           Such Grantor shall execute and deliver to the Collateral Agent in form and substance reasonably acceptable to the Collateral Agent and suitable for (i) filing in the Applicable IP Office the short-form intellectual property security agreements in the form attached hereto as Annex 3 for all Copyrights, Trademarks, Patents and IP Licenses of such Grantor and (ii) recording with the appropriate Internet domain name registrar, a duly executed
 

 
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form of assignment for all Internet Domain Names of such Grantor (together with appropriate supporting documentation as may be requested by the Collateral Agent).
 
Section 5.8                        Notices . Such Grantor shall promptly notify the Collateral Agent in writing of its acquisition of any interest hereafter in property that is of a type where a security interest or lien must be or may be registered, recorded or filed under, or notice thereof given under, any federal statute or regulation.
 
Section 5.9                        Notice of Commercial Tort Claims . Such Grantor agrees that, if it shall acquire any interest in any commercial tort claim (whether from another Person or because such commercial tort claim shall have come into existence), (i) such Grantor shall, promptly upon such acquisition, deliver to the Collateral Agent, in each case in form and substance reasonably satisfactory to the Collateral Agent, a notice of the existence and nature of such commercial tort claim and a supplement to Schedule 1 containing a specific description of such commercial tort claim, (ii) Section 3.1 shall apply to such commercial tort claim and (iii) such Grantor shall execute and deliver to the Collateral Agent, in each case in form and substance reasonably satisfactory to the Collateral Agent, any document, and take all other action, reasonably deemed by the Collateral Agent to be reasonably necessary or appropriate for the Collateral Agent to obtain, on behalf of the Secured Parties, a perfected security interest having at least the priority set forth in Section 4.2 in all such commercial tort claims. Any supplement to Schedule 1 delivered pursuant to this Section 5.9 shall, after the receipt thereof by the Collateral Agent, become part of Schedule 1 for all purposes hereunder other than in respect of representations and warranties made prior to the date of such receipt.
 
Section 5.10                        Compliance with Credit Agreement . Such Grantor agrees to comply with all covenants and other provisions applicable to it under the Credit Agreement, including Sections 2.15, 11.3 and 11.4 of the Credit Agreement and agrees to the same submission to jurisdiction as that agreed to by the Borrower in the Credit Agreement.
 
ARTICLE 6
 
REMEDIAL PROVISIONS
 
Section 6.1                        Code and Other Remedies .
 
(a)            UCC Remedies . During the continuance of an Event of Default, the Collateral Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to any Secured Obligation, all rights and remedies of a secured party under the UCC or any other applicable law.
 
(b)            Disposition of Collateral . Without limiting the generality of the foregoing, the Collateral Agent may, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), during the continuance of any Event of Default (personally or through its agents or attorneys), (i) enter upon the premises where any Collateral is located, without any obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or any other Person notice or opportunity for a
 

 
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hearing on the Collateral Agent's claim or action, (ii) collect, receive, appropriate and realize upon any Collateral and (iii) Sell, grant an option or options to purchase and deliver any Collateral (or enter into Contractual Obligations to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Collateral Agent shall have the right, upon any such public sale or sales and, to the extent permitted by the UCC and other applicable Requirements of Law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or equity is hereby waived and released.
 
(c)            Management of the Collateral . Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at the Collateral Agent's request, it shall assemble the Collateral and make it available to the Collateral Agent at places that the Collateral Agent shall reasonably select, whether at such Grantor's premises or elsewhere, (ii) without limiting the foregoing, the Collateral Agent also has the right to require that each Grantor store and keep any Collateral pending further action by the Collateral Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii) until the Collateral Agent is able to Sell any Collateral, the Collateral Agent shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent and (iv) the Collateral Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to enforce any of the Collateral Agent's remedies (for the benefit of the Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment. The Collateral Agent shall not have any obligation to any Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to any Collateral while such Collateral is in the possession of the Collateral Agent.
 
(d)            Application of Proceeds . The Collateral Agent shall apply the cash proceeds of any action taken by it pursuant to this Section 6.1 , after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and any other Secured Party hereunder, including reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the Credit Agreement, and only after such application and after the payment by the Collateral Agent of any other amount required by any Requirement of Law, need the Collateral Agent account for the surplus, if any, to any Grantor.
 
(e)            Direct Obligation . Neither the Collateral Agent nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any Grantor, any other Loan Party or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof. All of the rights and remedies of the Collateral Agent and any other Secured Party under any Loan Document shall be cumulative, may be exercised individually or concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law. To the extent it may lawfully do so, each Grantor absolutely and
 

 
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irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any Secured Party, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.
 
(f)            Commercially Reasonable . To the extent that applicable Requirements of Law impose duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for the Collateral Agent to do any of the following:
 
(i)           fail to incur significant costs, expenses or other Liabilities reasonably deemed as such by the Collateral Agent to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;
 
(ii)           fail to obtain Permits, or other consents, for access to any Collateral to Sell or for the collection or Sale of any Collateral, or, if not required by other Requirements of Law, fail to obtain Permits or other consents for the collection or disposition of any Collateral;
 
(iii)           fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;
 
(iv)           advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature or to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring any such Collateral;
 
(v)           exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature or, to the extent deemed appropriate by the Collateral Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;
 
(vi)           dispose of assets in wholesale rather than retail markets;
 
(vii)           disclaim disposition warranties, such as title, possession or quiet enjoyment; or
 

 
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(viii)           purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of any Collateral or to provide the Collateral Agent a guaranteed return from the collection or disposition of any Collateral.
 
Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a non-exhaustive list of actions or omissions that are commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by the Secured Parties shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 6.1 . Without limitation upon the foregoing, nothing contained in this Section 6.1 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this Section 6.1 .
 
(g)            IP Licenses . For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Section 6.1 (including in order to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, Sell or grant options to purchase any Collateral) at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent, for the benefit of the Secured Parties, (i) an irrevocable, nonexclusive, worldwide license (exercisable without payment of royalty or other compensation to such Grantor), including in such license the right to sublicense, use and practice any Intellectual Property now owned or hereafter acquired by such Grantor and access to all media in which any of the licensed items may be recorded or stored and to all Software and programs used for the compilation or printout thereof and (ii) an irrevocable license (without payment of rent or other compensation to such Grantor) to use, operate and occupy all real property owned, operated, leased, subleased or otherwise occupied by such Grantor.
 
Section 6.2                        Accounts and Payments in Respect of General Intangibles; Contracts .
 
(a)           In addition to, and not in substitution for or limitation of, any similar requirement in the Credit Agreement, if required by the Collateral Agent at any time during the continuance of an Event of Default, any payment of accounts or payment under any Contract or otherwise in respect of general intangibles, when collected by any Grantor, shall be promptly (and, in any event, within 2 Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent, in a Cash Collateral Account, subject to withdrawal by the Collateral Agent as provided in Section 6.4 . Until so turned over, such payment shall be held by such Grantor in trust for the Collateral Agent, and segregated from other funds of such Grantor. Each such deposit of proceeds of accounts and payments under any Contract or otherwise in respect of general intangibles shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.
 
(b)           At any time during the continuance of an Event of Default:
 
(i)           each Grantor shall, upon the Collateral Agent's request, deliver to the Collateral Agent all original and other documents evidencing, and relating to, the Contracts and transactions that gave rise to any account or any payment in respect of general intangibles, including all original orders, invoices and shipping receipts and notify account debtors that the
 

 
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accounts or general intangibles have been collaterally assigned to the Collateral Agent and that payments in respect thereof shall be made directly to the Collateral Agent;
 
(ii)           the Collateral Agent may, without notice, at any time during the continuance of an Event of Default, limit or terminate the authority of a Grantor to collect its accounts or amounts due under Contracts, other general intangibles or any thereof and, in its own name or in the name of others, communicate with account debtors to verify with them to the Collateral Agent's satisfaction the existence, amount and terms of any account or amounts due under any Contract or other general intangible. In addition, the Collateral Agent may at any time enforce such Grantor's rights, under Contracts, under applicable law, or otherwise, against such account debtors and obligors of general intangibles; and
 
(iii)           each Grantor shall take all actions, deliver all documents and provide all information necessary or reasonably requested by the Collateral Agent to ensure any Internet Domain Name is registered.
 
(c)           Anything herein to the contrary notwithstanding, each Grantor shall remain liable to observe and perform all the conditions and obligations to be observed and performed by it under each Contract, each account and each payment in respect of general intangibles, all in accordance with the terms of any Contract or other agreement giving rise thereto. No Secured Party shall have any obligation or liability under any Contract or other agreement giving rise to an account or a payment in respect of a general intangible by reason of or arising out of any Loan Document or the receipt by any Secured Party of any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any obligation of any Grantor under or pursuant to any Contract or other agreement giving rise to an account or a payment in respect of a general intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
 
Section 6.3                        Pledged Collateral .
 
(a)            Voting Rights . During the continuance of an Event of Default, upon notice by the Collateral Agent to the relevant Grantor or Grantors, the Collateral Agent or its nominee may exercise (A) any voting, consent, corporate and other right pertaining to the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock, the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent may determine), all without liability except to account for property actually received by it; provided , however , that the Collateral Agent shall have no duty to any Grantor to exercise any
 

 
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such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
 
(b)            Proxies . In order to permit the Collateral Agent to exercise the voting and other consensual rights that it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Collateral Agent all such proxies, dividend payment orders and other instruments as the Collateral Agent may from time to time reasonably request and (ii) without limiting the effect of clause (i) above, such Grantor hereby grants to the Collateral Agent an irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations.
 
(c)            Authorization of Issuers .   Each Grantor hereby expressly irrevocably authorizes and instructs, without any further instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with any instruction received by it from the Collateral Agent in writing that states that an Event of Default is continuing and is otherwise in accordance with the terms of this Agreement and each Grantor agrees that such issuer shall be fully protected from Liabilities to such Grantor in so complying and (ii) unless otherwise expressly permitted hereby, pay any dividend or make any other payment with respect to the Pledged Collateral directly to the Collateral Agent.
 
Section 6.4                        Contracts .   Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, at its option, exercise one or more of the following remedies with respect to the Contracts that constitute Collateral:
 
(a)           (i) take any action permitted under Section 6.1 , Section 6.2 , or otherwise under this Agreement and (ii) in the place and stead of the applicable Grantor, exercise any other rights of such Grantor under the Contracts in accordance with the terms thereof.  Without limitation of the foregoing, each Grantor agrees that upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, but is not obligated to, give notices, consents and demands and make elections under the Contracts, modify or waive the terms of the Contracts and enforce the Contracts, in each case, to the same extent and on the same terms as such Grantor might have done.  It is understood and agreed that notwithstanding the exercise of such rights and/or the taking of such actions by the Collateral Agent, such Grantor shall remain liable for performance of its obligations under the Contracts;
 
(b)           upon receipt by the Collateral Agent of notice from any counterparty to any Contract (the " Counterparties ") of such Counterparty's intent to terminate such Contract, the Collateral Agent shall be entitled, but shall not be obligated, to (i) cure or cause to be cured the
 

 
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condition giving rise to such Counterparty's right of termination of such Contract, or (ii) acquire and assume (or assign and cause the assumption by a third party of) the rights and obligations of the applicable Grantor under such Contract; and
 
(c)           upon termination of any Contract by operation of law or otherwise, the Collateral Agent shall be entitled, but shall not be obligated, to enter into a new agreement (" Successor Agreement ") with the Counterparty to such terminated Contract, on the same terms and with the same provisions as such terminated Contract.  Each Grantor shall have no rights or obligations whatsoever with respect to any Successor Agreement (it being understood that nothing herein shall release the Grantor of any obligations it may have under such terminated Contract).
 
Each Grantor acknowledges that the rights of the Collateral Agent described in this Section 6.4 are necessary to protect the interests of the Secured Parties and agrees to accept any actions taken by Collateral Agent in accordance with this Section 6.4 .  It is also understood and agreed that notwithstanding the taking of any such actions by the Collateral Agent pursuant to this Section 6.4 , the Collateral Agent shall not incur any liability to such Grantor or any other Person as a result of any such actions, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of the Collateral Agent (each as determined in a final, non-appealable judgment by a court of competent jurisdiction).  Each Grantor (i) authorizes the actions of the Counterparties under this Section 6.4 and (ii) agrees that following the receipt by the Collateral Agent of such notice described under subsection (b) above, or upon termination of any Contract as described in subsection (c), the Counterparties are authorized to, without further inquiry, rely on and act in accordance with any instructions such Counterparty receives which purport to be originated from the Collateral Agent without further consent from such Grantor notwithstanding any conflicting or contrary instructions such Counterparty receives from such Grantor, and such Counterparty shall have no liability to the Collateral Agent, the Grantors or any other Person in relying on and acting in accordance with any such instructions.
 
Section 6.5                        Proceeds to be Turned over to and Held by Collateral Agent . Unless otherwise expressly provided in the Credit Agreement or this Agreement, all proceeds of any Collateral received by any Grantor hereunder in cash or Cash Equivalents shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be turned over to the Collateral Agent in the exact form received (with any necessary endorsement). All such proceeds of Collateral and any other proceeds of any Collateral received by the Collateral Agent in cash or Cash Equivalents shall be held by the Collateral Agent in a Cash Collateral Account. All proceeds being held by the Collateral Agent in a Cash Collateral Account (or by such Grantor in trust for the Collateral Agent) shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in the Credit Agreement.
 
Section 6.6                        Registration Rights .
 
(a)           If, in the opinion of the Collateral Agent, it is necessary or advisable to Sell any portion of the Pledged Collateral by registering such Pledged Collateral under the provisions of the Securities Act of 1933 (the " Securities Act "), each relevant Grantor shall cause the issuer
 

 
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thereof (or, to the extent the issuer thereof is not a Subsidiary or otherwise controlled by such Grantor, use commercially reasonable efforts to cause the issuer thereof) to do or cause to be done all acts as may be, in the opinion of the Collateral Agent, necessary or advisable to register such Pledged Collateral or that portion thereof to be Sold under the provisions of the Securities Act, all as directed by the Collateral Agent in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto and in compliance with the securities or laws of any jurisdiction that the Collateral Agent shall designate.
 
(b)           Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act and applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act or under applicable state securities laws even if such issuer would agree to do so.
 
(c)           Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of any portion of the Pledged Collateral pursuant to this Section 6.6 valid and binding and in compliance with all applicable Requirements of Law. Each Grantor further agrees that a breach of any covenant contained in this Section 6.6 will cause irreparable injury to the Collateral Agent and other Secured Parties, that the Collateral Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.6 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreement.
 
Section 6.7                        Deficiency . Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed by the Collateral Agent or any other Secured Party to collect such deficiency.
 
ARTICLE 7
 
THE COLLATERAL AGENT
 
Section 7.1                        Collateral Agent's Appointment as Attorney-in-Fact .
 
(a)           Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any Related Person thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the
 

 
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name of such Grantor or in its own name, for the purpose of carrying out the terms of the Loan Documents, to take any appropriate action and to execute any document or instrument that may be necessary or desirable to accomplish the purposes of the Loan Documents, and, without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent and its Related Persons the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the following when an Event of Default shall be continuing:
 
(i)           in the name of such Grantor, in its own name or otherwise, take possession of and indorse and collect any check, draft, note, acceptance or other instrument for the payment of moneys due under any account or general intangible or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any such moneys due under any Contract, account or general intangible or with respect to any other Collateral whenever payable;
 
(ii)           in the case of any Intellectual Property owned by or licensed to the Grantors, execute, deliver and have recorded any document that the Collateral Agent may request to evidence, effect, publicize or record the Collateral Agent's security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;
 
(iii)           pay or discharge taxes and Liens levied or placed on or threatened against any Collateral, effect any repair or pay any insurance called for by the terms of the Credit Agreement (including all or any part of the premiums therefor and the costs thereof);
 
(iv)           execute, in connection with any sale provided for in Section 6.1 or Section 6.6 , any document to effect or otherwise necessary or appropriate in relation to evidence the Sale of any Collateral; or
 
(v)           (A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct, (B) ask or demand for, and collect and receive payment of and receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral, (C) sign and indorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment, verification, notice and other document in connection with any Collateral, (D) commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other right in respect of any Collateral, (E) defend any actions, suits, proceedings, audits, claims, demands, orders or disputes brought against such Grantor with respect to any Collateral, (F) settle, compromise or adjust any such actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate, (G) assign any Intellectual Property owned by the Grantors or any IP Licenses of the Grantors throughout the world on such terms and conditions and in such manner as the Collateral Agent shall in its sole discretion determine, including the execution and filing of any document necessary to effectuate or record such assignment, (H) take any of the actions described in Sections 6.2 and 6.4 , and (I) generally, Sell, grant a Lien on, make any Contractual Obligation with respect to and otherwise deal with, any
 

 
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Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes and do, at the Collateral Agent's option, at any time or from time to time, all acts and things that the Collateral Agent deems necessary to protect, preserve or realize upon any Collateral and the Secured Parties' security interests therein and to effect the intent of the Loan Documents, all as fully and effectively as such Grantor might do.
 
(b)           If any Grantor fails to perform or comply with any Contractual Obligation contained herein, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such Contractual Obligation.
 
(c)           The expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 7.1 , together with interest thereon at a rate set forth in Section 2.6 ( Interest ) of the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable to the Collateral Agent in accordance with Section 4 of the Multiparty Agreement.
 
(d)           Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 7.1 . All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the Secured Obligations are indefeasibly paid in full.
 
Section 7.2                        Authorization to File Financing Statements . Each Grantor authorizes the Collateral Agent and its Related Persons, at any time and from time to time, to file or record financing statements, amendments thereto, and other filing or recording documents or instruments with respect to any Collateral in such form and in such offices as the Collateral Agent reasonably determines appropriate to perfect the security interests of the Collateral Agent under this Agreement, and such financing statements and amendments may describe the Collateral covered thereby as "all assets of the debtor". A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction. Such Grantor also hereby ratifies its authorization for the Collateral Agent to have filed any initial financing statement or amendment thereto under the UCC (or other similar laws) in effect in any jurisdiction if filed prior to the date hereof.
 
Section 7.3                        Authority of Collateral Agent .   Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such authority.

 
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Section 7.4                        Duty: Obligations and Liabilities .
 
(a)            Duty of Collateral Agent . The Collateral Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. The powers conferred on the Collateral Agent hereunder are solely to protect the Collateral Agent's interest in the Collateral and shall not impose any duty upon the Collateral Agent to exercise any such powers. The Collateral Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Related Persons shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. In addition, the Collateral Agent shall not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Collateral Agent in good faith.
 
(b)            Obligations and Liabilities with respect to Collateral . No Secured Party and no Related Person thereof shall be liable for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any Collateral. The powers conferred on the Collateral Agent hereunder shall not impose any duty upon any other Secured Party to exercise any such powers. The other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
 
ARTICLE 8
 
MISCELLANEOUS
 
Section 8.1                        Reinstatement . Each Grantor agrees that, if any payment made by any Loan Party or other Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured Party to such Loan Party, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect as fully as if such payment had never been made. If, prior to any of the foregoing, (a) any Lien or other Collateral securing such Grantor's liability hereunder shall have been released or terminated by virtue of the foregoing or (b) any provision of the Guaranty hereunder shall have been terminated, cancelled or surrendered, such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.

 
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Section 8.2                        Release of Collateral .
(a)           At the time provided in clause (iii) of Section 10.11(b) of the Credit Agreement, the Collateral shall be released from the Lien created hereby and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. Each Grantor is hereby authorized to file at such time UCC amendments and any other necessary documents evidencing the termination of the Liens so released. At the request of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral of such Grantor held by the Collateral Agent hereunder and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.
 
(b)           If the Collateral Agent shall be directed or permitted pursuant to clause (i) or (ii) of Section 10.11(b) of the Credit Agreement to release any Lien or any Collateral, such Collateral shall be released from the Lien created hereby to the extent provided under, and subject to the terms and conditions set forth in, such clauses (i) and (ii) . In connection therewith, the Collateral Agent, at the request of any Grantor, shall execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such release.
 
(c)           At the time provided in Section 10.11(a) of the Credit Agreement and at the request of the Borrower, a Grantor shall be released from its obligations hereunder in the event that all the Securities of such Grantor shall be Sold to any Person that is not an Affiliate of Holdings, the Borrower and the Subsidiaries of the Borrower in a transaction permitted by the Loan Documents.
 
Section 8.3                        Independent Obligations . The obligations of each Grantor hereunder are independent of and separate from the Secured Obligations and the Guaranteed Obligations of any other Grantor. If any Secured Obligation or Guaranteed Obligation is not paid when due, or upon any Event of Default, the Collateral Agent may, at its sole election, proceed directly and at once, without notice, against any Grantor and any Collateral to collect and recover the full amount of any Secured Obligation or Guaranteed Obligation then due, without first proceeding against any other Grantor, any other Loan Party, any other guarantor or any other Collateral and without first joining any other Grantor, any other Loan Party or any other guarantor in any proceeding.
 
Section 8.4                        No Waiver by Course of Conduct . No Secured Party shall by any act (except by a written instrument pursuant to Section 8.5), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such Secured Party would otherwise have on any future occasion.
 
Section 8.5                        Amendments in Writing . None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance
 

 
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with Section 11.1 of the Credit Agreement; provided, however, that annexes to this Agreement may be supplemented (but no existing provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder Agreements, in substantially the form of Annex 1 and Annex 2, respectively, in each case duly executed by the Collateral Agent and each Grantor directly affected thereby.
 
Section 8.6                        Additional Grantors; Additional Pledged Collateral .
 
(a)            Joinder Agreements . If, at the option of the Borrower or as required pursuant to Section 7.10 of the Credit Agreement, the Borrower shall cause any Subsidiary that is not a Grantor to become a Grantor hereunder, such Subsidiary shall execute and deliver to the Collateral Agent a Joinder Agreement substantially in the form of Annex 2 and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date.
 
(b)            Pledge Amendments . To the extent any Pledged Collateral has not been delivered as of the Effective Date, such Grantor shall deliver a pledge amendment duly executed by the Grantor in substantially the form of Annex 1 (each, a " Pledge Amendment "). Such Grantor authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement.
 
Section 8.7                        Notices . All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in Section 11.11 of the Credit Agreement; provided, however, that any such notice, request or demand to or upon any Grantor shall be addressed to the Borrower's notice address set forth in such Section 11.11.
 
Section 8.8                        Successors and Assigns . This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of each Secured Party and their successors and assigns; provided, however, that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent.
 
Section 8.9                        Counterparts . This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or by Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.
 
Section 8.10                        Severability . Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision in any other jurisdiction.
 
Section 8.11                        Governing Law . This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

 
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Section 8.12                        WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING
WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.12.
 
Section 8.13                        Multiparty Agreement .   Notwithstanding anything to the contrary in this Agreement, the rights and remedies of the Collateral Agent (including the rights and remedies provided in Article 6 hereof) are in addition to, and not in lieu of, its rights and remedies under the Multiparty Agreement.
 
[SIGNATURE PAGES FOLLOW]
 

 
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written.
 

 
CINEDIGM DIGITAL FUNDING 2, LLC, as Grantor
 
 
 
   
By:
  /s/ Gary S. Loffredo
   
Name:
  Gary S. Loffredo
   
Title:
  General Counsel and Secretary




Signature Page to Guaranty and Security Agreement
 
 

 

ACCEPTED AND AGREED
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
as Collateral Agent

 
   
By:
/s/ Richard O. Knowlton
   
 
Richard O. Knowlton
Managing Director
 
   
       



Signature Page to Guaranty and Security Agreement
 
 

 

ANNEX 1
 
TO
 
GUARANTY AND SECURITY AGREEMENT 1
 
FORM OF PLEDGE AMENDMENT
 
This PLEDGE AMENDMENT, dated as of _____ ___, 20__, is delivered pursuant to Section 8.6 of the Guaranty and Security Agreement, dated as of October 18, 2011, by CINEDIGM DIGITAL FUNDING 2, LLC (the " Borrower "), the undersigned Grantor and the other Affiliates of the Borrower from time to time party thereto as Grantors in favor of Société Générale, New York Branch, as collateral agent for the Secured Parties referred to therein (the " Guaranty and Security Agreement "). Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.
 
The undersigned hereby agrees that this Pledge Amendment may be attached to the Guaranty and Security Agreement and that the Pledged Collateral listed on Annex 1-A to this Pledge Amendment shall be and become part of the Collateral referred to in the Guaranty and Security Agreement and shall secure all Secured Obligations of the undersigned.
 
The undersigned hereby represents and warrants that each of the representations and warranties contained in Sections 4.1 , 4.2 , 4.5 and 4.10 of the Guaranty and Security Agreement is true and correct in respect of the Pledged Collateral listed on Annex 1-A as of the date hereof as if made on and as of such date.
 
 

 
[GRANTOR]
 
 
 
   
By:
 
   
Name:
 
   
Title:
 



 


 
1 To be used for pledge of undelivered Pledged Collateral by existing Grantor.
 

Annex 1 to Guaranty and Security Agreement
-1-
 
 

 
 
 
ANNEX 1-A
 
PLEDGED STOCK
 
Issuer
Class
Certificate No(s)
Par Value
Number of Shares, Units or Interests
         
 
PLEDGED DEBT INSTRUMENTS
 
Issuer
Description of Debt
Certificate No(s)
Final Maturity
Principal Amount
         

 
 
 
ACKNOWLEDGED AND AGREED
 
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 

 

   
By:
     
Name:
     
Title:
     

 

 
Annex 1 to Guaranty and Security Agreement
-2-
 
 

 

ANNEX 2
 
TO
 
GUARANTY AND SECURITY AGREEMENT
 
FORM OF JOINDER AGREEMENT
 
This JOINDER AGREEMENT, dated as of _____ ___, 20__, is delivered pursuant to Section 8.6 of the Guaranty and Security Agreement, dated as of October 18, 2011, by CINEDIGM DIGITAL FUNDING 2, LLC (the " Borrower ") and the Affiliates of the Borrower from time to time party thereto as Grantors in favor of Société Générale, New York Branch, as collateral agent for the Secured Parties referred to therein (the " Guaranty and Security Agreement "). Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.
 
By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 8.6 of the Guaranty and Security Agreement, hereby becomes a party to the Guaranty and Security Agreement as a Grantor thereunder with the same force and effect as if originally named as a Grantor therein and, without limiting the generality of the foregoing, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of the undersigned, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned and expressly assumes all obligations and liabilities of a Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of the Guaranty and Security Agreement.
 
The information set forth in Annex 1-A is hereby added to the information set forth in Schedules 1 through 6 to the Guaranty and Security Agreement.  By acknowledging and agreeing to this Joinder Agreement, the undersigned hereby agree that this Joinder Agreement may be attached to the Guaranty and Security Agreement and that the Pledged Collateral listed on Annex 1-A to this Joinder Amendment shall be and become part of the Collateral referred to in the Guaranty and Security Agreement and shall secure all Secured Obligations of the undersigned.
 
The undersigned hereby represents and warrants that each of the representations and warranties contained in Article 4 of the Guaranty and Security Agreement applicable to it is true and correct on and as the date hereof as if made on and as of such date.
 

Annex 2 to Guaranty and Security Agreement
-1-
 
 

 

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.
 
 
 
[ADDITIONAL GRANTOR]
 
 
 
   
By:
 
   
Name:
 
   
Title:
 


                                                               

Annex 2 to Guaranty and Security Agreement
-2-
 
 

 

 
ACKNOWLEDGED AND AGREED
 
as of the date first above written:

CINEDIGM DIGITAL FUNDING 2, LLC,
as Grantor
 

   
By:
     
Name:
     
Title:
     

 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 

   
By:
     
Name:
     
Title:
     


 

Annex 2 to Guaranty and Security Agreement
-3-
 
 

 

ANNEX 1-A
 
[Description of Collateral to be added to Schedules 1 through 6 to the Guaranty and Security Agreement]
 

 

Annex 2 to Guaranty and Security Agreement
-4-
 
 

 

ANNEX 3
 
TO
 
GUARANTY AND SECURITY AGREEMENT
 
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
 
THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of _____ ___, 20__, is made by each of the entities listed on the signature pages hereof (each a " Grantor " and, collectively, the " Grantors "), in favor of Société Générale, New York Branch, as collateral agent (in such capacity, together with its successors and permitted assigns, the " Collateral Agent ") for the Secured Parties (as defined in the Credit Agreement referred to below).
 
W I T N E S S E T H:
 
WHEREAS, pursuant to the Credit Agreement, dated as of October 18, 2011 (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the " Credit Agreement "), among Cinedigm Digital Funding 2, LLC (the " Borrower "), the Lenders, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders and the other Secured Parties, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;
 
WHEREAS, pursuant to a Guaranty and Security Agreement of even date herewith in favor of the Collateral Agent (the " Guaranty and Security Agreement "), each Grantor (other than the Borrower) has agreed to guarantee the Guaranteed Obligations (as defined therein) and each Grantor has agreed to grant a security interest in its assets to secure the Secured Obligations (as defined therein); and
 
WHEREAS, all of the Grantors are party to the Guaranty and Security Agreement pursuant to which the Grantors are required to execute and deliver this [Copyright] [Patent] [Trademark] Security Agreement;
 
NOW, THEREFORE, in consideration of the premises and to induce the Lenders and the Collateral Agent to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
 
Section 1.                       Defined Terms . Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.
 
Section 2.                       Grant of Security Interest in [Copyright] [Trademark] [Patent] Collateral . Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and under the following Collateral of such Grantor (the " [Copyright] [Trademark] [Patent] Collateral "):
 

Annex 3 to Guaranty and Security Agreement
-1-
 
 

 

(a)           [all of its Copyrights and all IP Licenses providing for the grant by or to such Grantor of any right under any Copyright, including, without limitation, those referred to on Schedule 1 hereto;
 
(b)           all renewals, reversions and extensions of the foregoing; and
 
(c)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
or
 
(a)           [all of its Patents and all IP Licenses providing for the grant by or to such Grantor of any right under any Patent, including, without limitation, those referred to on Schedule 1 hereto;
 
(b)           all reissues, reexaminations, continuations, continuations-in-part, divisionals, renewals and extensions of the foregoing; and
 
(c)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
or
 
(d)           [all of its Trademarks and all IP Licenses providing for the grant by or to such Grantor of any right under any Trademark, including, without limitation, those referred to on Schedule 1 hereto;
 
(e)           all renewals and extensions of the foregoing;
 
(f)           all goodwill of the business connected with the use of, and symbolized by, each such Trademark; and
 
(g)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
Section 3.                       Guaranty and Security Agreement . The security interest granted pursuant to this [Copyright] [Patent] [Trademark] Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Guaranty and Security Agreement and each Grantor hereby acknowledges and agrees that the rights and remedies of the Collateral Agent with respect to the security interest in the [Copyright] [Patent] [Trademark] Collateral made and granted hereby are more fully set forth in the Guaranty and Security
 

Annex 3 to Guaranty and Security Agreement
-2-
 
 

 

Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
 
Section 4.                       Grantor Remains Liable . Each Grantor hereby agrees that, anything herein to the contrary notwithstanding, such Grantor shall assume full and complete responsibility for the prosecution, defense, enforcement or any other necessary or desirable actions in connection with their [Copyrights] [Patents] [Trademarks] and IP Licenses subject to a security interest hereunder.
 
Section 5.                       Counterparts . This [Copyright] [Patent] [Trademark] Security Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.
 
Section 6.                       Governing Law . This [Copyright] [Patent] [Trademark] Security Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 
[SIGNATURE PAGES FOLLOW]
 

Annex 3 to Guaranty and Security Agreement
-3-
 
 

 

IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent] [Trademark] Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.
 
 
 
Very truly yours,
 
[GRANTOR], as Grantor
 
 
 
   
By:
 
   
Name:
 
   
Title:
 

ACCEPTED AND AGREED
 
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 
 
   
By:
     
Name:
     
Title:
     




Annex 3 to Guaranty and Security Agreement
-4-
 
 

 

ACKNOWLEDGMENT OF GRANTOR
 
STATE OF ____________________
)
 
 
) ss.
 
COUNTY OF __________________
)
 
 
On this ___ day of _____ ___, 20__ before me personally appeared _____ proved to me on the basis of satisfactory evidence to be the person who executed the foregoing instrument on behalf of _____, who being by me duly sworn did depose and say that he is an authorized officer of said corporation, that the said instrument was signed on behalf of said corporation as authorized by its Board of Directors and that he acknowledged said instrument to be the free act and deed of said corporation.
 
 
 
 
   
 
 
   
 
  Notary Public
   
 
 
 
 
 

 
Annex 3 to Guaranty and Security Agreement
-5-
 
 

 

SCHEDULE I
 
TO
 
[COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT
 
[Copyright] [Patent] [Trademark] Registrations
 
A.           REGISTERED [COPYRIGHTS] [PATENTS] [TRADEMARKS]
 
[Include Registration Number and Date]
 
B.           [COPYRIGHT] [PATENT] [TRADEMARK] APPLICATIONS
 
[Include Application Number and Date]
 
C.           IP LICENSES
 
[Include complete legal description of agreement (name of agreement, parties and date)]
 

 

Annex 3 to Guaranty and Security Agreement
-6-
 
 

 

SCHEDULE 1 – COMMERCIAL TORT CLAIMS
 
None
 
 
 
 
 

Schedule 1 to Guaranty and Security Agreement
-1-
 
 

 

SCHEDULE 2 – FILINGS
 
UCC Financing Statement covering all of assets of Cinedigm Digital Funding 2, LLC (as debtor) and naming Société Générale, New York Branch, as collateral agent, on behalf of  the Secured Parties, to be filed with the Delaware Secretary of State.
 
 
 
 
 

Schedule 2 to Guaranty and Security Agreement
-1-
 
 

 

SCHEDULE 3 – JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE
 
 
Legal Name:
Cinedigm Digital Funding 2, LLC
   
Jurisdiction of Organization:
Delaware
   
Organizational Identification Number:
5023164
   
Chief Executive Office:
Cinedigm Digital Funding 2, LLC
55 Madison Avenue, Suite 300
Morristown, NJ 07960
   
Any other Jurisdiction of Organization, Legal Name or Chief
Executive Office in the past five years:
 
None

 
 

Schedule 3 to Guaranty and Security Agreement
-1-
 
 

 

SCHEDULE 4 – LOCATION OF INVENTORY AND EQUIPMENT
 
Inventory
 
None
 
Equipment
 
Name of Theatre
Address
City
State and Zip Code
Screen #
College Square
6301 University Avenue
Cedar Falls
IA 50613
12
Coral Ridge Cinema
1451 Coral Ridge Avenue
Coralville
IA 52241
10
Crossroads Cinema
2450 Crossroads Blvd.
Waterloo
IA 50702
12
Sycamore Cinema
1602 Sycamore Street
Iowa City
IA 52240
12
Addison Cinemas
1555 West Lake Street
Addison
IL 60101
21
Chicago Heights Cinema
1301 Hilltop Avenue
Chicago Heights
IL 60411
14
Elgin Cinema
111 South Randall Road
Elgin
IL 60123
15
Gurnee Cinema
6144 Grand Avenue
Gurnee
IL 60031
20
Orland Park Cinemas
16350 South LaGrange Road
Orland Park
IL 60467
15
Duluth Cinema
300 Harbor Drive
Duluth
MN 55802
10
Elk River Cinema
570 Freeport
Elk River Mall
Elk River
MN 55330
17
Hastings Cinema
1325 South Frontage Road
Hastings
MN 55033
9
Lakes Cinema
4351 Stebner Road
Hermantown
MN 55811
10
Oakdale Cinema
5677 Hadley Avenue
Oakdale
MN 55128
17
Parkwood Cinema
1533 Frontage Road
North Waite Park
MN 56387
17
Rosemount Cinema
15280 Carrousel Way
Rosemount
MN 55068
8
Shakopee Cinema
1116 Shakopee Town Square
Shakopee
MN 55379
11
Century Cinema
3931 9th Avenue SW
Fargo
ND 58103
10
West Acres Cinema
4101 17th Avenue SW
Fargo
ND 58103
14
20 Grand Cinemas
14304 West Maple Road
Omaha
NE 68164
19
Edgewood Cinema
5220 South 56th Street
Lincoln
NE 68516
6
Lincoln Grand Cinema
1101 P Street
Lincoln Grand
NE 68508
14
South Pointe Cinema
2920 Pine Lake Road
Lincoln
NE 68516
6
Twin Creek Cinema
3909 Raynor Parkway
Bellevue
NE 68123
16
Village Pointe Cinema
304 North 174th Street
Omaha
NE 68118
16
Crosswoods Cinema
200 Hutchinson Avenue
Columbus
OH 43234
17
Pickerington Cinema
1776 Hill Road North
Pickerington
OH 43147
17
Appleton East Cinema
W3091 Van Roy Road
Appleton
WI 54915
16
 
 

 
Schedule 4 to Guaranty and Security Agreement
-1-
 
 

 

 
Name of Theatre
Address
City
State and Zip Code
Screen #
Bay Park Cinema
755 Willard Drive
Green Bay
WI 54324
16
Campus Ripon
103 Watson Street
Ripon
WI 54971
1
Cedar Creek Cinema
10101 Market Street, Box D20
Rothschild
WI 54474
10
La Crosse Cinema
2032 Warci Avenue
La Crosse
WI 54601
11
Eastgate Cinema
5202 High Crossing Blvd.
Madison
WI 53704
16
Green Bay East Cinema
100Q Kepler Drive
Green Bay
WI 54311
12
Hillside Cinema
2950 Hillside Drive
Delafield
WI 53018
14
Hollywood Cinema — Grand Chute
513 North Westhill Blvd.
Grand Chute
WI 54914
14
Majestic Cinema of Brookfield
770 North Springdale Road
Waukesha
WI 53186
16
Menomonee Falls Cinema
W180 N9393 Premier Lane
Menomonee Falls
WI 53051
16
North Shore Cinema
11700 North Port Washington Road
Mequon
WI 53092
11
Oshkosh Cinema
340 South Koeller Street
Oshkosh
WI 54902
12
Point Cinema
7825 Big Sky Drive
Madison
WI 53719
15
Renaissance Cinema
10411 Washington Avenue
Sturtevant
WI 53177
13
Ridge Cinema
5200 South Moorland Road
New Berlin
WI 53151
19
Saukville Cinema
350 S. Riverside Drive
Saukville
WI 53080
12
Sheboygan Cinema
3226 Kohler Memorial Drive
Sheboygan
WI 53081
13
South Shore Cinema
7261 South 13th Street
Oak Creek
WI 53154
16
 
 

 
BOOKS AND RECORDS
 
Cinedigm Digital Funding 2, LLC
55 Madison Avenue, Suite 300
Morristown, NJ 07960
 
 
 
 

Schedule 4 to Guaranty and Security Agreement
-2-
 
 

 

SCHEDULE 5 – PLEDGED COLLATERAL
 
None
 

Schedule 5 to Guaranty and Security Agreement
-1-
 
 

 

SCHEDULE 6 – INTELLECTUAL PROPERTY
 
Cinedigm Digital Funding 2, LLC licenses Access Digital Media Inc.'s proprietary Theatre Command Center Software pursuant to that certain Software License Agreement, dated as of  October 18, 2011, by and among Access Digital Media, Inc., as licensor, CDF2 Holdings, LLC, as licensee and Cinedigm Digital Funding 2, LLC, as licensee.
 
Cinedigm Digital Funding 2, LLC licenses Hollywood Software Inc.'s proprietary software products pursuant to that certain Software License Agreement, dated as of  October 18, 2011, by and between Hollywood Software Inc., as licensor, CDF2 Holdings, LLC, as licensee and Cinedigm Digital Funding 2, LLC, as licensee.
 


Schedule 6 to Guaranty and Security Agreement
-1-
 
 

 


EXHIBIT 4.3
 
 
EXECUTION VERSION



 
 
SECURITY AGREEMENT
 
DATED AS O F OCTOBER 18, 2011
 
AMONG
 
CDF2 HOLDINGS, LLC ,
 
AND
 
EACH GRANTOR
 
FROM TIME TO TIME PARTY HERETO
 
AND
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
AS COLLATERAL AGENT






 
 
 

 
TABLE OF CONTENTS
Page
 


ARTICLE 1
DEFINED TERMS
Section 1.1
Definitions
Section 1.2
Certain Other Terms
ARTICLE 2
[RESERVED]
ARTICLE 3
GRANT OF SECURITY INTEREST
Section 3.1
Collateral
Section 3.2
Grant of Security Interest in Collateral
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1
Title; No Other Liens
Section 4.2
Perfection and Priority
Section 4.3
Jurisdiction of Organization; Chief Executive Office
Section 4.4
Locations of Inventory; Equipment and Books and Records
Section 4.5
[Reserved]
Section 4.6
[Reserved]
Section 4.7
Intellectual Property
Section 4.8
[Reserved]
Section 4.9
Specific Collateral
Section 4.10
Enforcement
Section 4.11
Solvency
Section 4.12
Representations and Warranties of the Credit Agreement
ARTICLE 5
COVENANTS
Section 5.1
Maintenance of Perfected Security Interest; Further Documentation and Consents
Section 5.2
Changes in Locations, Name, Etc
Section 5.3
[Reserved]
Section 5.4
[Reserved]
Section 5.5
[Reserved]
Section 5.6
[Reserved]
Section 5.7
Intellectual Property
Section 5.8
Notices
Section 5.9
[Reserved]
Section 5.10
Compliance with Credit Agreement
ARTICLE 6
REMEDIAL PROVISIONS
Section 6.1
Code and Other Remedies
Section 6.2
Accounts and Payments in Respect of General Intangibles; Contracts
Section 6.3
[Reserved]
Section 6.4
Contracts
Section 6.5
Proceeds to be Turned over to and Held by Collateral Agent
Section 6.6
[Reserved]
Section 6.7
Deficiency
ARTICLE 7
THE COLLATERAL AGENT
Section 7.1
Collateral Agent's Appointment as Attorney-in-Fact
Section 7.2
Authorization to File Financing Statements
Section 7.3
Authority of Collateral Agent
 
 

 
-i-
 

 
 

 
TABLE OF CONTENTS
 (continued)
 
Page

 
Section 7.4
Duty: Obligations and Liabilities
ARTICLE 8
MISCELLANEOUS
Section 8.1
Reinstatement
Section 8.2
Release of Collateral
Section 8.3
Independent Obligations
Section 8.4
No Waiver by Course of Conduct
Section 8.5
Amendments in Writing
Section 8.6
Additional Grantors
Section 8.7
Notices
Section 8.8
Successors and Assigns
Section 8.9
Counterparts
Section 8.10
Severability
Section 8.11
Governing Law
Section 8.12
WAIVER OF JURY TRIAL
Section 8.13
Multiparty Agreement
 
 

 
-ii-
 

 
 

 
TABLE OF CONTENTS


ANNEXES AND SCHEDULES
 
Annex 1
-
Form of Joinder Agreement
Annex 2
-
Form of Intellectual Property Security Agreement
 
Schedule 1
-
Filings
Schedule 2
-
Jurisdiction of Organization; Chief Executive Office
Schedule 3
-
Location of Inventory, Equipment and Books and Records
Schedule 4
-
Intellectual Property
 
 
 

 
 
-iii-
 

 
 

 
SECURITY AGREEMENT
 
SECURITY AGREEMENT, dated as of October 18, 2011, by CDF2 HOLDINGS, LLC, a Delaware limited liability company (" Holdings "), and each of the other entities that becomes a party hereto pursuant to Section 8 . 6 (together with Holdings, the " Grantors "), in favor of Société Générale, New York Branch, as collateral agent (in such capacity, together with its successors and permitted assigns, the " Collateral Agent ") for the Lenders and each other Secured Party (each as defined in the Credit Agreement referred to below).
 
W I T N E S S E T H:
 
WHEREAS, pursuant to the Credit Agreement dated as of October 18, 2011 (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the " Credit Agreement ") among Cinedigm Digital Funding 2, LLC (the " Borrower "), the Lenders, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders and the other Secured Parties, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;
 
WHEREAS, each Grantor will derive substantial direct and indirect benefits from the making of the extensions of credit under the Credit Agreement; and
 
WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent;
 
NOW, THEREFORE, in consideration of the premises and to induce the Lenders and the Collateral Agent to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
 
ARTICLE 1
 
DEFINED TERMS
 
Section 1.1                        Definition s .
 
(a)           Capital terms used herein without definition are used as defined in the Credit Agreement.
 
(b)           The following terms have the meanings given to them in the UCC and terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC (such meanings to be equally applicable to both the singular and plural forms of the terms defined): " account ", " account debtor ", " as-extracted collateral ", " chattel paper ", " equipment ", " farm products ", " general intangible ", " goods ", " health-care-insurance receivable ", " instruments ", " inventory ", " proceeds ", " record ", and " security ".
 

 
 

 

(c)           The following terms shall have the following meanings:
 
" Agreement " means this Security Agreement.
 
" Applicable IP Office " means the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency within or outside the United States.
 
" Collateral " has the meaning specified in Section 3 . 1 .
 
" Contracts " means all contracts, undertakings, or agreements (other than rights evidenced by chattel paper, documents or instruments) to which any Grantor now is, or hereafter will be, bound, or a party, beneficiary or assignee, in any event, including all contracts, undertakings, or agreements in or under which any Grantor may now or hereafter have any right, title or interest.
 
" Intellectual Property " means intellectual property included in or relating to the Collateral.
 
" Secured Obligations " has the meaning specified in Section 3 . 2 .
 
" Software " means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing, in each case included in or relating to the Collateral.
 
" UCC " means the Uniform Commercial Code as from time to time in effect in the State of New York; provided , however , that, in the event that, by reason of mandatory provisions of any applicable Requirement of Law, any of the attachment, perfection or priority of the Collateral Agent's or any other Secured Party's security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction other than the State of New York, " UCC " shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions.
 
Section 1.2                        Certain Other Term s .
 
(a)           The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. References herein to an Annex, Schedule, Article, Section or clause refer to the appropriate Annex or Schedule to, or Article, Section or clause in this Agreement. Where the context requires, provisions relating to any Collateral when used in relation to a Grantor shall refer to such Grantor's Collateral or any relevant part thereof.
 
(b)            Section 1 . 5 of the Credit Agreement is applicable to this Agreement as and to the extent set forth therein.
 
ARTICLE 2
 
[RESERVED]
 

 
-2-

 

ARTICLE 3
 
GRANT OF SECURITY INTEREST
 
Section 3.1                        Collatera l . For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests is collectively referred to as the " Collateral ":
 
(a)           all equipment and inventory consisting of Digital Systems and any general intangibles related thereto;
 
(b)           all books and records pertaining to the other property described in this Section 3 . 1 ;
 
(c)           any and all additions, accessions and improvements to, all substitutions and replacements for and all products of or derived from the foregoing; and
 
(d)           to the extent not otherwise included, all proceeds of the foregoing.
 
Section 3.2                        Grant of Security Interest in Collatera l . Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all Obligations of the Borrower with respect to the Revolving Loans (the " Secured Obligations "), hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties, a Lien on and security interest in, all of its right, title and interest in, to and under the Collateral of such Grantor.  Without limitation of the foregoing, each Grantor collaterally assigns all of such Grantor's right, title and interest in and to the Collateral to the Collateral Agent for the benefit of the holders of the Secured Obligations to secure the payment and performance of the Secured Obligations to the full extent that such a collateral assignment is possible under the relevant law.
 
ARTICLE 4
 
REPRESENTATIONS AND WARRANTIES
 
To induce the Lenders and the Collateral Agent to enter into the Loan Documents, each Grantor hereby represents and warrants each of the following to the Collateral Agent, the Lenders and the other Secured Parties:
 
Section 4.1                        Title; No Other Lien s . Except for the Lien granted to the Collateral Agent pursuant to this Agreement and other Permitted Liens under any Loan Document (including Section 4 . 2 ), such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. Such Grantor (a) is the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien.
 
Section 4.2                        Perfection and Priorit y . The security interest granted pursuant to this Agreement constitutes a valid and continuing perfected security interest in favor of the Collateral
 

 
-3-

 

Agent in all Collateral subject, for the following Collateral, to the occurrence of the following: (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of the filings and other actions specified on Schedule 1 (which, in the case of all filings and other documents referred to on such schedule with respect to Collateral existing as of the Effective Date, have been delivered to the Collateral Agent in completed and duly authorized form) and (ii) in the case of all Copyrights, Trademarks and Patents for which UCC filings are insufficient, all appropriate filings having been made with the United States Copyright Office or the United States Patent and Trademark Office, as applicable. Except as set forth in this Section 4 . 2 , as of the Effective Date all actions by each Grantor necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken. Upon the taking of the action described in this Section 4 . 2 , such security interest shall be prior to all other Liens on the Collateral except for Customary Permitted Liens having priority over the Collateral Agent's Lien by operation of law or unless otherwise permitted by any Loan Document.
 
Section 4.3                        Jurisdiction of Organization; Chief Executive Offic e . Such Grantor's jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Grantor's chief executive office or sole place of business, in each case as of the date hereof, is specified on Schedule 2 and such Schedule 2 also lists all jurisdictions of incorporation, legal names and locations of such Grantor's chief executive office or sole place of business for the five years preceding the date hereof.
 
Section 4.4                        Locations of Inventory; Equipment and Books and Record s . On the date hereof, such Grantor's inventory and equipment (other than inventory or equipment in transit) and books and records concerning the Collateral are kept at the locations listed on Schedule 3 and such Schedule 3 also lists the locations of such inventory, equipment and books and records for the five years preceding the date hereof.
 
Section 4.5                       [Reserved]
 
Section 4.6                       [Reserved]
 
Section 4.7                        Intellectual Propert y .
 
(a)            Schedule 4 sets forth a true and complete list of the following Intellectual Property such Grantor owns, licenses or otherwise has the right to use:  (i) Intellectual Property that is registered or subject to applications for registration, (ii) Internet Domain Names and (iii) other Intellectual Property and material Software, separately identifying that owned and licensed to such Grantor and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by the Grantor with respect thereto.
 
(b)           On the Effective Date, all Intellectual Property owned by such Grantor is valid, in full force and effect, subsisting, unexpired and enforceable, and no Intellectual Property has been abandoned. No breach or default of any IP License shall be caused by any of the following, and
 

 
-4-

 

none of the following shall limit or impair the ownership, use, validity or enforceability of, or any rights of such Grantor in, any Intellectual Property material to the business of such Grantor: (i) the consummation of the transactions contemplated by any Loan Document or (ii) any holding, decision, judgment or order rendered by any Governmental Authority in existence as of the Effective Date.  As of the Effective Date, there are no pending (or, to the knowledge of such Grantor, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes challenging the ownership, use, validity, enforceability of, or such Grantor's rights in, any Intellectual Property material to the business of such Grantor.  As of the Effective Date, to such Grantor's knowledge, no Person has been or is infringing, misappropriating, diluting, violating or otherwise impairing any such Intellectual Property of such Grantor. Such Grantor, and to such Grantor's knowledge each other party thereto, is not in material breach or default of any material IP License included in the Collateral.
 
Section 4.8                       [Reserved]
 
Section 4.9                        Specific Collatera l . None of the Collateral is or is proceeds or products of farm products, as-extracted collateral, health-care-insurance receivables or timber to be cut.
 
Section 4.10                        Enforcemen t . No Permit, notice to or filing with any Governmental Authority or any other Person or any consent from any Person is required for the exercise by the Collateral Agent of its rights (including voting rights) provided for in this Agreement or the enforcement of remedies in respect of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except any approvals that may be required to be obtained from any bailees or landlords to collect the Collateral.
 
Section 4.11                        Solvenc y .  Grantor is Solvent on the date hereof and Grantor does not intend to incur or believe that it will incur, debts that will be beyond its ability to pay as such debts mature.
 
Section 4.12                        Representations and Warranties of the Credit Agreemen t . The representations and warranties as to such Grantor and its Subsidiaries made by the Borrower in Article IV of the Credit Agreement as of a certain date are true and correct as of such date.
 
ARTICLE 5
 
COVENANTS
 
Each Grantor agrees with the Collateral Agent to the following, as long as any Secured Obligation or Commitment remains outstanding and, in each case, unless the Required Lenders otherwise consent in writing:
 
Section 5.1                        Maintenance of Perfected Security Interest; Further Documentation and Consent s .
 
(a)           Such Grantor shall (i) not use or permit any Collateral to be used in violation of any provision of any Loan Document, any Requirement of Law in any material respect or any policy of insurance covering the Collateral and (ii) not enter into any Contractual Obligation or undertaking, other than the CHG Lease Facility Documents, restricting the right or ability of
 

 
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such Grantor or the Collateral Agent to Sell any Collateral if such restriction would have a Material Adverse Effect.
 
(b)           Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4 . 2 and shall defend such security interest and such priority against the claims and demands of all Persons.
 
(c)           Pursuant to clause (ii) of Section 6 . 1(e) of the Credit Agreement, such Grantor shall furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other documents in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail and in form and substance satisfactory to the Collateral Agent.
 
(d)           At any time and from time to time, upon the written request of the Collateral Agent, such Grantor shall, for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, (i) promptly and duly execute and deliver, and have recorded, such further documents, including an authorization to file (or, as applicable, the filing) of any financing statement or amendment under the UCC (or other filings under similar Requirements of Law) in effect in any jurisdiction with respect to the security interest created hereby and (ii) take such further action as the Collateral Agent may reasonably request, including securing all approvals necessary or appropriate for the assignment to or for the benefit of the Collateral Agent of any Contractual Obligation, including any IP License, held by such Grantor and to enforce the security interests granted hereunder.
 
Section 5.2                        Changes in Locations, Name, Et c . Except upon 30 days' prior written notice to the Collateral Agent and delivery to the Collateral Agent of (a) all documents reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interests provided for herein and (b) if applicable, a written supplement to Schedule 3 showing any additional locations at which inventory or equipment shall be kept, such Grantor shall not do any of the following:
 
(i)           permit any inventory or equipment to be kept at a location other than those listed on Schedule 3 , except for inventory or equipment in transit;
 
(ii)           change its jurisdiction of organization or its location, in each case from that referred to in Section 4 . 3 ; or
 
(iii)           change its legal name or organizational identification number, if any, or corporation, limited liability company, partnership or other organizational structure to such an extent that any financing statement filed in connection with this Agreement would become misleading.
 
Section 5.3                       [Reserved]
 
Section 5.4                       [Reserved]
 
Section 5.5                       [Reserved]
 

 
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Section 5.6                       [Reserved]
 
Section 5.7                        Intellectual Propert y .
 
(a)           Promptly (and in any event within 10 Business Days) after any change to Schedule 4 for such Grantor, such Grantor shall provide the Collateral Agent notification thereof and the short-form intellectual property agreements and assignments as described in this Section 5 . 7 and other documents that the Collateral Agent reasonably requests with respect thereto.
 
(b)           Such Grantor shall (and shall cause all its licensees to) (i) (1) continue to use each Trademark material to such Grantor's business included in the Intellectual Property in order to maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark is currently used, free from any claim of abandonment for non-use, (2) maintain at least the same standards of quality of products and services offered under such Trademark as are currently maintained, (3) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, and (4) not adopt or use any other Trademark that is confusingly similar or a colorable imitation of such Trademark unless the Collateral Agent shall obtain a perfected security interest in such other Trademark pursuant to this Agreement and (ii) not do any act or omit to do any act whereby, (w) any Trademark included in the Intellectual Property material to such Grantor's business (or any goodwill associated therewith) may become destroyed, invalidated, impaired or harmed in any way, (x) any Patent material to such Grantor's business included in the Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, (y) any portion of the Copyrights material to such Grantor's business included in the Intellectual Property may become invalidated, otherwise impaired or fall into the public domain or (z) any Trade Secret material to such Grantor's business that is Intellectual Property may become publicly available or otherwise unprotectable.
 
(c)           Such Grantor shall notify the Collateral Agent promptly if it knows that any application or registration relating to any Intellectual Property material to the business of such Grantor may become forfeited, misused, unenforceable, abandoned or dedicated to the public, or of any adverse determination or development regarding the validity or enforceability of such Grantor's ownership of, interest in, right to use, register, own or maintain any such Intellectual Property (including the institution of, or any such determination or development in, any proceeding relating to the foregoing in any Applicable IP Office). Such Grantor shall take all actions that are necessary or reasonably requested by the Collateral Agent to maintain and pursue each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation included in the Intellectual Property material to the business of such Grantor.
 
(d)           Such Grantor shall not knowingly do any act or knowingly omit to do any act to infringe, misappropriate, dilute, violate or otherwise impair the Intellectual Property of any other Person. In the event that any Intellectual Property of such Grantor is or has been infringed, misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall take such action as it reasonably deems appropriate under the circumstances in response thereto, including promptly bringing suit and recovering all damages therefor to the extent it is commercially reasonable to do so.
 

 
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(e)           Such Grantor shall execute and deliver to the Collateral Agent in form and substance reasonably acceptable to the Collateral Agent and suitable for (i) filing in the Applicable IP Office the short-form intellectual property security agreements in the form attached hereto as Annex 2 for all Copyrights, Trademarks, Patents and IP Licenses of such Grantor and (ii) recording with the appropriate Internet domain name registrar, a duly executed form of assignment for all Internet Domain Names of such Grantor (together with appropriate supporting documentation as may be requested by the Collateral Agent).
 
Section 5.8                        Notice s . Such Grantor shall promptly notify the Collateral Agent in writing of its acquisition of any interest hereafter in property that is of a type where a security interest or lien must be or may be registered, recorded or filed under, or notice thereof given under, any federal statute or regulation.
 
Section 5.9                       [Reserved]
 
Section 5.10                        Compliance with Credit Agreemen t . Such Grantor agrees to comply with all covenants and other provisions applicable to it under the Credit Agreement, including Sections 2 . 14 , 11 . 3 and 11 . 4 of the Credit Agreement and agrees to the same submission to jurisdiction as that agreed to by the Borrower in the Credit Agreement.
 
ARTICLE 6
 
REMEDIAL PROVISIONS
 
Section 6.1                        Code and Other Remedie s .
 
(a)            UCC Remedies . During the continuance of an Event of Default, the Collateral Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to any Secured Obligation, all rights and remedies of a secured party under the UCC or any other applicable law.
 
(b)            Disposition of Collateral . Without limiting the generality of the foregoing, the Collateral Agent may, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), during the continuance of any Event of Default (personally or through its agents or attorneys), (i) enter upon the premises where any Collateral is located, without any obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or any other Person notice or opportunity for a hearing on the Collateral Agent's claim or action, (ii) collect, receive, appropriate and realize upon any Collateral and (iii) Sell, grant an option or options to purchase and deliver any Collateral (or enter into Contractual Obligations to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Collateral Agent shall have the right, upon any such public sale or sales and, to the extent permitted by the UCC and other applicable Requirements of Law, upon any such private
 

 
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sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or equity is hereby waived and released.
 
(c)            Management of the Collateral . Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at the Collateral Agent's request, it shall assemble the Collateral and make it available to the Collateral Agent at places that the Collateral Agent shall reasonably select, whether at such Grantor's premises or elsewhere, (ii) without limiting the foregoing, the Collateral Agent also has the right to require that each Grantor store and keep any Collateral pending further action by the Collateral Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii) until the Collateral Agent is able to Sell any Collateral, the Collateral Agent shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent and (iv) the Collateral Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to enforce any of the Collateral Agent's remedies (for the benefit of the Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment. The Collateral Agent shall not have any obligation to any Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to any Collateral while such Collateral is in the possession of the Collateral Agent.
 
(d)            Application of Proceeds . The Collateral Agent shall apply the cash proceeds of any action taken by it pursuant to this Section 6 . 1 , after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and any other Secured Party hereunder, including reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the Credit Agreement, and only after such application and after the payment by the Collateral Agent of any other amount required by any Requirement of Law, need the Collateral Agent account for the surplus, if any, to any Grantor.
 
(e)            Direct Obligation . Neither the Collateral Agent nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any Grantor, any other Loan Party or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof. All of the rights and remedies of the Collateral Agent and any other Secured Party under any Loan Document shall be cumulative, may be exercised individually or concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any Secured Party, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.
 

 
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(f)            Commercially Reasonable . To the extent that applicable Requirements of Law impose duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for the Collateral Agent to do any of the following:
 
(i)           fail to incur significant costs, expenses or other Liabilities reasonably deemed as such by the Collateral Agent to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;
 
(ii)           fail to obtain Permits, or other consents, for access to any Collateral to Sell or for the collection or Sale of any Collateral, or, if not required by other Requirements of Law, fail to obtain Permits or other consents for the collection or disposition of any Collateral;
 
(iii)           fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;
 
(iv)           advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature or to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring any such Collateral;
 
(v)           exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature or, to the extent deemed appropriate by the Collateral Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;
 
(vi)           dispose of assets in wholesale rather than retail markets;
 
(vii)           disclaim disposition warranties, such as title, possession or quiet enjoyment; or
 
(viii)           purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of any Collateral or to provide the Collateral Agent a guaranteed return from the collection or disposition of any Collateral.
 
Each Grantor acknowledges that the purpose of this Section 6 . 1 is to provide a non-exhaustive list of actions or omissions that are commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by the Secured Parties shall

 
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not be deemed commercially unreasonable solely on account of not being indicated in this Section 6 . 1 . Without limitation upon the foregoing, nothing contained in this Section 6 . 1 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this Section 6 . 1 .
 
(g)            IP Licenses . For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Section 6 . 1 (including in order to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, Sell or grant options to purchase any Collateral) at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent, for the benefit of the Secured Parties, (i) an irrevocable, nonexclusive, worldwide license (exercisable without payment of royalty or other compensation to such Grantor), including in such license the right to sublicense, use and practice any Intellectual Property now owned or hereafter acquired by such Grantor and access to all media in which any of the licensed items may be recorded or stored and to all Software and programs used for the compilation or printout thereof and (ii) an irrevocable license (without payment of rent or other compensation to such Grantor) to use, operate and occupy all real property owned, operated, leased, subleased or otherwise occupied by such Grantor.
 
Section 6.2                        Accounts and Payments in Respect of General Intangibles; Contract s .
 
(a)           In addition to, and not in substitution for or limitation of, any similar requirement in the Credit Agreement, if required by the Collateral Agent at any time during the continuance of an Event of Default, any payment of accounts or payment under any Contract or otherwise in respect of general intangibles, when collected by any Grantor, shall be promptly (and, in any event, within 2 Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent, in a Cash Collateral Account, subject to withdrawal by the Collateral Agent as provided in Section 6 . 4 . Until so turned over, such payment shall be held by such Grantor in trust for the Collateral Agent, and segregated from other funds of such Grantor. Each such deposit of proceeds of accounts and payments under any Contract or otherwise in respect of general intangibles shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.
 
(b)           At any time during the continuance of an Event of Default:
 
(i)           each Grantor shall, upon the Collateral Agent's request, deliver to the Collateral Agent all original and other documents evidencing, and relating to, the Contracts and transactions that gave rise to any account or any payment in respect of general intangibles, including all original orders, invoices and shipping receipts and notify account debtors that the accounts or general intangibles have been collaterally assigned to the Collateral Agent and that payments in respect thereof shall be made directly to the Collateral Agent;
 

 
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(ii)           the Collateral Agent may, without notice, at any time during the continuance of an Event of Default, limit or terminate the authority of a Grantor to collect its accounts or amounts due under Contracts, other general intangibles or any thereof and, in its own name or in the name of others, communicate with account debtors to verify with them to the Collateral Agent's satisfaction the existence, amount and terms of any account or amounts due under any Contract or other general intangible. In addition, the Collateral Agent may at any time enforce such Grantor's rights, under Contracts, under applicable law, or otherwise, against such account debtors and obligors of general intangibles; and
 
(iii)           each Grantor shall take all actions, deliver all documents and provide all information necessary or reasonably requested by the Collateral Agent to ensure any Internet Domain Name is registered.
 
(c)           Anything herein to the contrary notwithstanding, each Grantor shall remain liable to observe and perform all the conditions and obligations to be observed and performed by it under each Contract, each account and each payment in respect of general intangibles, all in accordance with the terms of any Contract or other agreement giving rise thereto. No Secured Party shall have any obligation or liability under any Contract or other agreement giving rise to an account or a payment in respect of a general intangible by reason of or arising out of any Loan Document or the receipt by any Secured Party of any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any obligation of any Grantor under or pursuant to any Contract or other agreement giving rise to an account or a payment in respect of a general intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
 
Section 6.3                       [Reserved]
 
Section 6.4                        Contracts .  Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, at its option, exercise one or more of the following remedies with respect to the Contracts that constitute Collateral:
 
(a)           (i) take any action permitted under Section 6 . 1 , Section 6 . 2 , or otherwise under this Agreement and (ii) in the place and stead of the applicable Grantor, exercise any other rights of such Grantor under the Contracts in accordance with the terms thereof.  Without limitation of the foregoing, each Grantor agrees that upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, but is not obligated to, give notices, consents and demands and make elections under the Contracts, modify or waive the terms of the Contracts and enforce the Contracts, in each case, to the same extent and on the same terms as such Grantor might have done.  It is understood and agreed that notwithstanding the exercise of such rights and/or the taking of such actions by the Collateral Agent, such Grantor shall remain liable for performance of its obligations under the Contracts;
 
(b)           upon receipt by the Collateral Agent of notice from any counterparty to any Contract (the " Counterparties ") of such Counterparty's intent to terminate such Contract, the Collateral Agent shall be entitled, but shall not be obligated, to (i) cure or cause to be cured the condition giving rise to such Counterparty's right of termination of such Contract, or (ii) acquire
 

 
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and assume (or assign and cause the assumption by a third party of) the rights and obligations of the applicable Grantor under such Contract; and
 
(c)           upon termination of any Contract by operation of law or otherwise, the Collateral Agent shall be entitled, but shall not be obligated, to enter into a new agreement (" Successor Agreement ") with the Counterparty to such terminated Contract, on the same terms and with the same provisions as such terminated Contract.  Each Grantor shall have no rights or obligations whatsoever with respect to any Successor Agreement (it being understood that nothing herein shall release the Grantor of any obligations it may have under such terminated Contract).
 
Each Grantor acknowledges that the rights of the Collateral Agent described in this Section 6 . 4 are necessary to protect the interests of the Secured Parties and agrees to accept any actions taken by the Collateral Agent in accordance with this Section 6 . 4 .  It is also understood and agreed that notwithstanding the taking of any such actions by the Collateral Agent pursuant to this Section 6 . 4 , the Collateral Agent shall not incur any liability to such Grantor or any other Person as a result of any such actions, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of the Collateral Agent (each as determined in a final, non-appealable judgment by a court of competent jurisdiction).  Each Grantor (i) authorizes the actions of the Counterparties under this Section 6 . 4 and (ii) agrees that following the receipt by the Collateral Agent of such notice described under subsection (b) above, or upon termination of any Contract as described in subsection (c), the Counterparties are authorized to, without further inquiry, rely on and act in accordance with any instructions such Counterparty receives which purport to be originated from the Collateral Agent without further consent from such Grantor notwithstanding any conflicting or contrary instructions such Counterparty receives from such Grantor, and such Counterparty shall have no liability to the Collateral Agent, the Grantors or any other Person in relying on and acting in accordance with any such instructions.
 
Section 6.5                        Proceeds to be Turned over to and Held by Collateral Agen t . Unless otherwise expressly provided in the Credit Agreement or this Agreement, all proceeds of any Collateral received by any Grantor hereunder in cash or Cash Equivalents shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be turned over to the Collateral Agent in the exact form received (with any necessary endorsement). All such proceeds of Collateral and any other proceeds of any Collateral received by the Collateral Agent in cash or Cash Equivalents shall be held by the Collateral Agent in a Cash Collateral Account. All proceeds being held by the Collateral Agent in a Cash Collateral Account (or by such Grantor in trust for the Collateral Agent) shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in the Credit Agreement.
 
Section 6.6                       [Reserved]
 
Section 6.7                        Deficienc y . Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed by the Collateral Agent or any other Secured Party to collect such deficiency.
 

 
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ARTICLE 7
 
THE COLLATERAL AGENT
 
Section 7.1                        Collateral Agent's Appointment as Attorney-in-Fac t .
 
(a)           Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any Related Person thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of the Loan Documents, to take any appropriate action and to execute any document or instrument that may be necessary or desirable to accomplish the purposes of the Loan Documents, and, without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent and its Related Persons the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the following when an Event of Default shall be continuing:
 
(i)           in the name of such Grantor, in its own name or otherwise, take possession of and indorse and collect any check, draft, note, acceptance or other instrument for the payment of moneys due under any account or general intangible or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any such moneys due under any Contract, account or general intangible or with respect to any other Collateral whenever payable;
 
(ii)           in the case of any Intellectual Property owned by or licensed to the Grantors, execute, deliver and have recorded any document that the Collateral Agent may request to evidence, effect, publicize or record the Collateral Agent's security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;
 
(iii)           pay or discharge taxes and Liens levied or placed on or threatened against any Collateral, effect any repair or pay any insurance called for by the terms of the Credit Agreement (including all or any part of the premiums therefor and the costs thereof);
 
(iv)           execute, in connection with any sale provided for in Section 6 . 1 , any document to effect or otherwise necessary or appropriate in relation to evidence the Sale of any Collateral; or
 
(v)           (A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct, (B) ask or demand for, and collect and receive payment of and receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral, (C) sign and indorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment, verification, notice and other document in connection with any Collateral, (D) commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other right in respect of any Collateral, (E) defend any actions, suits, proceedings, audits, claims, demands, orders or disputes brought against such Grantor with
 

 
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respect to any Collateral, (F) settle, compromise or adjust any such actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate, (G) assign any Intellectual Property owned by the Grantors or any IP Licenses of the Grantors throughout the world on such terms and conditions and in such manner as the Collateral Agent shall in its sole discretion determine, including the execution and filing of any document necessary to effectuate or record such assignment, (H) take any of the actions described in Sections 6 . 2 and 6 . 4 , and (I) generally, Sell, grant a Lien on, make any Contractual Obligation with respect to and otherwise deal with, any Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes and do, at the Collateral Agent's option, at any time or from time to time, all acts and things that the Collateral Agent deems necessary to protect, preserve or realize upon any Collateral and the Secured Parties' security interests therein and to effect the intent of the Loan Documents, all as fully and effectively as such Grantor might do.
 
(b)           If any Grantor fails to perform or comply with any Contractual Obligation contained herein, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such Contractual Obligation.
 
(c)           The expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 7 . 1 , together with interest thereon at a rate set forth in Section 2 . 6 ( Interest ) of the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable to the Collateral Agent in accordance with Section 4 of the Multiparty Agreement.
 
(d)           Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 7 . 1 . All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the Secured Obligations are indefeasibly paid in full.
 
Section 7.2                        Authorization to File Financing Statement s . Each Grantor authorizes the Collateral Agent and its Related Persons, at any time and from time to time, to file or record financing statements, amendments thereto, and other filing or recording documents or instruments with respect to any Collateral in such form and in such offices as the Collateral Agent reasonably determines appropriate to perfect the security interests of the Collateral Agent under this Agreement. A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction.  Such Grantor also hereby ratifies its authorization for the Collateral Agent to have filed any initial financing statement or amendment thereto under the UCC (or other similar laws) in effect in any jurisdiction if filed prior to the date hereof.
 
Section 7.3                        Authority of Collateral Agen t . Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto
 

 
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as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such authority.
 
Section 7.4                        Duty: Obligations and Liabilitie s .
 
(a)            Duty of Collateral Agent . The Collateral Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. The powers conferred on the Collateral Agent hereunder are solely to protect the Collateral Agent's interest in the Collateral and shall not impose any duty upon the Collateral Agent to exercise any such powers. The Collateral Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Related Persons shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. In addition, the Collateral Agent shall not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Collateral Agent in good faith.
 
(b)            Obligations and Liabilities with respect to Collateral . No Secured Party and no Related Person thereof shall be liable for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any Collateral. The powers conferred on the Collateral Agent hereunder shall not impose any duty upon any other Secured Party to exercise any such powers. The other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
 
ARTICLE 8
 
MISCELLANEOUS
 
Section 8.1                        Reinstatemen t . Each Grantor agrees that, if any payment made by any Loan Party or other Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured Party to such Loan Party, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect as fully as if such payment had never been made. If, prior to any of the foregoing, any Lien or other Collateral securing such Grantor's liability hereunder shall have been released or terminated by virtue of the foregoing, such Lien, other Collateral shall be reinstated in full force and effect and such prior release, termination,
 

 
-16-

 

cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.
 
Section 8.2                        Release of Collatera l . At the time provided in Section 10 . 11(c) of the Credit Agreement, the Collateral shall be released from the Lien created hereby and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. Each Grantor is hereby authorized to file at such time UCC amendments and any other necessary documents evidencing the termination of the Liens so released. At the request of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral of such Grantor held by the Collateral Agent hereunder and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.
 
Section 8.3                        Independent Obligation s . The obligations of each Grantor hereunder are independent of and separate from the Secured Obligations of any other Grantor. If any Secured Obligation is not paid when due, or upon any Event of Default, the Collateral Agent may, at its sole election, proceed directly and at once, without notice, against any Grantor and any Collateral to collect and recover the full amount of any Secured Obligation then due, without first proceeding against any other Grantor, any other Loan Party, any guarantor or any other Collateral and without first joining any other Grantor, any other Loan Party or any guarantor in any proceeding.
 
Section 8.4                        No Waiver by Course of Conduc t . No Secured Party shall by any act (except by a written instrument pursuant to Section 8 . 5 ), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such Secured Party would otherwise have on any future occasion.
 
Section 8.5                        Amendments in Writin g . None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 11 . 1 of the Credit Agreement; provided , however , that annexes to this Agreement may be supplemented (but no existing provisions may be modified and no Collateral may be released) through Joinder Agreements, in substantially the form of Annex 1 duly executed by the Collateral Agent and each Grantor directly affected thereby.
 
Section 8.6                        Additional Grantor s . If Holdings shall form or acquire any Subsidiary (other than the Borrower or any Subsidiary of the Borrower) which shall obtain any interest in any portion of the Collateral, Holdings shall cause such Subsidiary to become a Grantor hereunder, such Subsidiary shall execute and deliver to the Collateral Agent a Joinder Agreement
 

 
-17-

 

substantially in the form of Annex 1 and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date.
 
Section 8.7                        Notice s . All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in Section 11 . 11 of the Credit Agreement; provided , however , that any such notice, request or demand to or upon any Grantor shall be addressed to Grantor, c/o the Borrower at the Borrower's notice address set forth in such Section 11 . 11 .
 
Section 8.8                        Successors and Assign s . This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of each Secured Party and their successors and assigns; provided , however , that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent.
 
Section 8.9                        Counterpart s . This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or by Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.
 
Section 8.10                        Severabilit y . Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision in any other jurisdiction.
 
Section 8.11                        Governing La w . This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 
Section 8.12                        WAIVER OF JURY TRIA L . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8 . 12 .
 

Section 8.13                        Multiparty Agreemen t .  Notwithstanding anything to the contrary in this Agreement, the rights and remedies of the Collateral Agent (including the rights and remedies
 

 
-18-

 

provided in Article 6 hereof) (a) are in addition to, and not in lieu of, its rights and remedies under the Multiparty Agreement and (b) are subject to the terms of the Multiparty Agreement.  In the event of any conflict between the terms of the Multiparty Agreement and this Agreement, the terms of the Multiparty Agreement shall govern and control.
 
[SIGNATURE PAGES FOLLOW]
 

 
-19-

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written.
 

 
CDF2 HOLDINGS, LLC, as Grantor
 
 
   
By:
  /s/ Gary S. Loffredo
   
Name:
  Gary S. Loffredo
   
Title:
  President

Signature Page to Security Agreement
 
 

 

ACCEPTED AND AGREED
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
as Collateral Agent

   
By:
/s/ Richard O. Knowlton
   
 
Richard O. Knowlton
Managing Director
 
   
       


Signature Page to Security Agreement
 
 

 

ANNEX 1
TO
SECURITY AGREEMENT
 
FORM OF JOINDER AGREEMENT
 
This JOINDER AGREEMENT, dated as of _____ ___, 20__, is delivered pursuant to Section 8 . 6 of the Security Agreement, dated as of October 18, 2011, by CDF2 HOLDINGS, LLC (" Holdings ") and the Affiliates of Holdings from time to time party thereto as Grantors in favor of Société Générale, New York Branch, as collateral agent for the Secured Parties referred to therein (the " Security Agreement "). Capitalized terms used herein without definition are used as defined in the Security Agreement.
 
By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 8 . 6 of the Security Agreement, hereby becomes a party to the Security Agreement as a Grantor thereunder with the same force and effect as if originally named as a Grantor therein and, without limiting the generality of the foregoing, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of the undersigned, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned and expressly assumes all obligations and liabilities of a Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of the Security Agreement.
 
The information set forth in Annex 1-A is hereby added to the information set forth in Schedules 1 through 4 to the Security Agreement.  By acknowledging and agreeing to this Joinder Agreement, the undersigned hereby agree that this Joinder Agreement may be attached to the Security Agreement and that the Collateral listed on Annex 1-A to this Joinder Amendment shall be and become part of the Collateral referred to in the Security Agreement and shall secure all Secured Obligations of the undersigned.
 
The undersigned hereby represents and warrants that each of the representations and warranties contained in Article 4 of the Security Agreement applicable to it is true and correct on and as the date hereof as if made on and as of such date.
 

Annex 1 to Security Agreement
-1-
 
 

 

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.
 
 
 

 
[ADDITIONAL GRANTOR]
 
 
 
   
By:
 
   
Name:
 
   
Title:
 

                                                            

Annex 1 to Security Agreement
-2-
 
 

 

 
ACKNOWLEDGED AND AGREED
as of the date first above written:

CDF2 HOLDINGS, LLC,
as Grantor
 
   
By:
     
Name:
     
Title:
     


 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 
   
By:
     
Name:
     
Title:
     



 

Annex 1 to Security Agreement
-3-
 
 

 

ANNEX 1-A
 
[Description of Collateral to be added to Schedules 1 through 4 to the Security Agreement]
 


Annex 1 to Security Agreement
-4-
 
 

 

ANNEX 2
SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
 
THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of _____ ___, 20__, is made by each of the entities listed on the signature pages hereof (each a " Grantor " and, collectively, the " Grantors "), in favor of Société Générale, New York Branch, as collateral agent (in such capacity, together with its successors and permitted assigns, the " Collateral Agent ") for the Secured Parties (as defined in the Credit Agreement referred to below).
 
W I T N E S S E T H:
 
WHEREAS, pursuant to the Credit Agreement, dated as of October 18, 2011 (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the " Credit Agreement "), among Cinedigm Digital Funding 2, LLC (the " Borrower "), the Lenders, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders and the other Secured Parties, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;
 
WHEREAS, pursuant to the Security Agreement dated October 18, 2011 in favor of the Collateral Agent (the " Security Agreement "), each Grantor has agreed to grant a security interest in certain of its assets to secure the Secured Obligations (as defined therein); and
 
WHEREAS, all of the Grantors are party to the Security Agreement pursuant to which the Grantors are required to execute and deliver this [Copyright] [Patent] [Trademark] Security Agreement;
 
NOW, THEREFORE, in consideration of the premises and to induce the Lenders and the Collateral Agent to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
 
Section 1.                       Defined Terms . Capitalized terms used herein without definition are used as defined in the Security Agreement.
 
Section 2.                       Grant of Security Interest in [Copyright] [Trademark] [Patent] Collateral . Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties, a Lien on and security interest in, all of its right, title and interest in, to and under the following Collateral of such Grantor (the " [Copyright] [Trademark] [Patent] Collateral "):
 
(a)           [all of its Copyrights and all IP Licenses providing for the grant by or to such Grantor of any right under any Copyright referred to on Schedule 1 hereto;
 
 
Annex 2 to Security Agreement
-1-
 

 
 
(b)           all renewals, reversions and extensions of the foregoing; and
 
(c)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
or
 
(d)           [all of its Patents and all IP Licenses providing for the grant by or to such Grantor of any right under any Patent referred to on Schedule 1 hereto;
 
(e)           all reissues, reexaminations, continuations, continuations-in-part, divisionals, renewals and extensions of the foregoing; and
 
(f)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
or
 
(g)           [all of its Trademarks and all IP Licenses providing for the grant by or to such Grantor of any right under any Trademark referred to on Schedule 1 hereto;
 
(h)           all renewals and extensions of the foregoing;
 
(i)           all goodwill of the business connected with the use of, and symbolized by, each such Trademark; and
 
(j)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
Section 3.                       Security Agreement . The security interest granted pursuant to this [Copyright] [Patent] [Trademark] Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and each Grantor hereby acknowledges and agrees that the rights and remedies of the Collateral Agent with respect to the security interest in the [Copyright] [Patent] [Trademark] Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
 
Section 4.                       Grantor Remains Liable . Each Grantor hereby agrees that, anything herein to the contrary notwithstanding, such Grantor shall assume full and complete responsibility for the prosecution, defense, enforcement or any other necessary or desirable actions in connection with their [Copyrights] [Patents] [Trademarks] and IP Licenses subject to a security interest hereunder.
 
 
Annex 2 to Security Agreement
-2-
 

 
 
 
Section 5.                       Counterparts . This [Copyright] [Patent] [Trademark] Security Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.
 
Section 6.                       Governing Law . This [Copyright] [Patent] [Trademark] Security Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 
[SIGNATURE PAGES FOLLOW]
 

Annex 2 to Security Agreement
-3-
 
 

 

IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent] [Trademark] Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.
 
 
 
Very truly yours,
 
[GRANTOR], as Grantor
 
 
 
   
By:
 
   
Name:
 
   
Title:
 

 
ACCEPTED AND AGREED
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 
 
   
By:
     
Name:
     
Title:
     


Annex 2 to Security Agreement
-4-
 
 

 

ACKNOWLEDGMENT OF GRANTOR
 
STATE OF                              )
  ) ss.
COUNTY OF                         )
 
On this ___ day of _____ ___, 20__ before me personally appeared _____ proved to me on the basis of satisfactory evidence to be the person who executed the foregoing instrument on behalf of _____, who being by me duly sworn did depose and say that he is an authorized officer of said corporation, that the said instrument was signed on behalf of said corporation as authorized by its Board of Directors and that he acknowledged said instrument to be the free act and deed of said corporation.
 
 
 
 
   
 
 
   
 
  Notary Public
   
 
 
 
 

 
Annex 2 to Security Agreement
-5-
 
 

 

SCHEDULE I
TO
[COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT
 
[Copyright] [Patent] [Trademark] Registrations
 
A.           REGISTERED [COPYRIGHTS] [PATENTS] [TRADEMARKS]
 
[Include Registration Number and Date]
 
B.           [COPYRIGHT] [PATENT] [TRADEMARK] APPLICATIONS
 
[Include Application Number and Date]
 
C.           IP LICENSES
 
[Include complete legal description of agreement (name of agreement, parties and date)]
 

 

Annex 2 to Security Agreement
-6-
 
 

 

SCHEDULE 1 – FILINGS
 
UCC Financing Statement covering the Collateral and naming CDF2 Holdings, LLC (as debtor) and Société Générale, New York Branch as secured party, to be filed with the Delaware Secretary of State.

Schedule 1 to Security Agreement
-1-
 
 

 

SCHEDULE 2 – JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE
 
 
Legal Name:
CDF2 Holdings, LLC
   
Jurisdiction of Organization:
Delaware
   
Organizational Identification Number:
4889179
   
Chief Executive Office:
CDF2 Holdings, LLC
55 Madison Avenue, Suite 300
Morristown, NJ 07960
   
Any other Jurisdiction of Organization, Legal Name or Chief
Executive Office in the past five years:
 
None

 

Schedule 2 to Security Agreement
-1-
 
 

 

SCHEDULE 3 – LOCATION OF INVENTORY, EQUIPMENT
AND BOOKS AND RECORDS
 
Inventory

None

Equipment
 
Name of Theatre
Address
City
State and Zip Code
Screen #
College Square
6301 University Avenue
Cedar Falls
IA 50613
12
Coral Ridge Cinema
1451 Coral Ridge Avenue
Coralville
IA 52241
10
Crossroads Cinema
2450 Crossroads Blvd.
Waterloo
IA 50702
12
Sycamore Cinema
1602 Sycamore Street
Iowa City
IA 52240
12
Addison Cinemas
1555 West Lake Street
Addison
IL 60101
21
Chicago Heights Cinema
1301 Hilltop Avenue
Chicago Heights
IL 60411
14
Elgin Cinema
111 South Randall Road
Elgin
IL 60123
15
Gurnee Cinema
6144 Grand Avenue
Gurnee
IL 60031
20
Orland Park Cinemas
16350 South LaGrange Road
Orland Park
IL 60467
15
Duluth Cinema
300 Harbor Drive
Duluth
MN 55802
10
Elk River Cinema
570 Freeport
Elk River Mall
Elk River
MN 55330
17
Hastings Cinema
1325 South Frontage Road
Hastings
MN 55033
9
Lakes Cinema
4351 Stebner Road
Hermantown
MN 55811
10
Oakdale Cinema
5677 Hadley Avenue
Oakdale
MN 55128
17
Parkwood Cinema
1533 Frontage Road
North Waite Park
MN 56387
17
Rosemount Cinema
15280 Carrousel Way
Rosemount
MN 55068
8
Shakopee Cinema
1116 Shakopee Town Square
Shakopee
MN 55379
11
Century Cinema
3931 9 th Avenue SW
Fargo
ND 58103
10
West Acres Cinema
4101 17th Avenue SW
Fargo
ND 58103
14
20 Grand Cinemas
14304 West Maple Road
Omaha
NE 68164
19
Edgewood Cinema
5220 South 56th Street
Lincoln
NE 68516
6
Lincoln Grand Cinema
1101 P Street
Lincoln Grand
NE 68508
14
 

Schedule 3 to Security Agreement
-1-
 
 

 

Name of Theatre
Address
City
State and Zip Code
Screen #
South Pointe Cinema
2920 Pine Lake Road
Lincoln
NE 68516
6
Twin Creek Cinema
3909 Raynor Parkway
Bellevue
NE 68123
16
Village Pointe Cinema
304 North 174th Street
Omaha
NE 68118
16
Crosswoods Cinema
200 Hutchinson Avenue
Columbus
OH 43234
17
Pickerington Cinema
1776 Hill Road North
Pickerington
OH 43147
17
Appleton East Cinema
W3091 Van Roy Road
Appleton
WI 54915
16
Bay Park Cinema
755 Willard Drive
Green Bay
WI 54324
16
Campus Ripon
103 Watson Street
Ripon
WI 54971
1
Cedar Creek Cinema
10101 Market Street, Box D20
Rothschild
WI 54474
10
La Crosse Cinema
2032 Warci Avenue
La Crosse
WI 54601
11
Eastgate Cinema
5202 High Crossing Blvd.
Madison
WI 53704
16
Green Bay East Cinema
100Q Kepler Drive
Green Bay
WI 54311
12
Hillside Cinema
2950 Hillside Drive
Delafield
WI 53018
14
Hollywood Cinema — Grand Chute
513 North Westhill Blvd.
Grand Chute
WI 54914
14
Majestic Cinema of Brookfield
770 North Springdale Road
Waukesha
WI 53186
16
Menomonee Falls Cinema
W180 N9393 Premier Lane
Menomonee Falls
WI 53051
16
North Shore Cinema
11700 North Port Washington Road
Mequon
WI 53092
11
Oshkosh Cinema
340 South Koeller Street
Oshkosh
WI 54902
12
Point Cinema
7825 Big Sky Drive
Madison
WI 53719
15
Renaissance Cinema
10411 Washington Avenue
Sturtevant
WI 53177
13
Ridge Cinema
5200 South Moorland Road
New Berlin
WI 53151
19
Saukville Cinema
350 S. Riverside Drive
Saukville
WI 53080
12
Sheboygan Cinema
3226 Kohler Memorial Drive
Sheboygan
WI 53081
13
South Shore Cinema
7261 South 13th Street
 
Oak Creek
WI 53154
16

Books and Records

Cinedigm Digital Funding 2, LLC
55 Madison Avenue, Suite 300
Morristown, NJ 07960

Schedule 3 to Security Agreement
-2-
 
 

 

SCHEDULE 4 – INTELLECTUAL PROPERTY
 
CDF2 Holdings, LLC licenses Access Digital Media Inc.'s proprietary Theatre Command Center Software pursuant to that certain Software License Agreement, dated as of  October 18, 2011, by and between Access Digital Media, Inc., as licensor, CDF2 Holdings, LLC, as licensee and Cinedigm Digital Funding 2, LLC, as licensee.
CDF2 Holdings, LLC licenses Hollywood Software Inc.'s proprietary software products pursuant to that certain Software License Agreement, dated as of  October 18, 2011, by and between Hollywood Software Inc., as licensor, CDF2 Holdings, LLC, as licensee and Cinedigm Digital Funding 2, LLC, as licensee.


Schedule 4 to Security Agreement
-1-
 
 

 

EXHIBIT 4.4
 
 
 
 
 
 
 
 
 
 
 
Execution Version

 


 
 
 
SECURITY AGREEMENT
 
DATED AS OF OCTOBER 18 , 2011
 
AMONG
 
CDF2 HOLDINGS, LLC ,
 
AND
 
EACH GRANTOR
 
FROM TIME TO TIME PARTY HERETO
 
AND
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
AS COLLATERAL AGENT

 

 



 
 
 

 
TABLE OF CONTENTS
 
Page
 
 
ARTICLE 1
 
DEFINED TERMS
 
 
Section 1.1
 
Definitions
 
 
Section 1.2
 
Certain Other Terms
 
 
ARTICLE 2
 
[RESERVED]
 
 
ARTICLE 3
 
GRANT OF SECURITY INTEREST
 
 
Section 3.1
 
Collateral
 
 
Section 3.2
 
Grant of Security Interest in Collateral
 
 
ARTICLE 4
 
REPRESENTATIONS AND WARRANTIES
 
 
Section 4.1
 
Title; No Other Liens
 
 
Section 4.2
 
Perfection and Priority
 
 
Section 4.3
 
Jurisdiction of Organization; Chief Executive Office
 
 
Section 4.4
 
Locations of Inventory; Equipment and Books and Records
 
 
Section 4.5
 
Pledged Collateral
 
 
Section 4.6
 
Instruments and Tangible Chattel Paper Formerly Accounts
 
 
Section 4.7
 
Intellectual Property
 
 
Section 4.8
 
Commercial Tort Claims
 
 
Section 4.9
 
Specific Collateral
 
 
Section 4.10
 
Enforcement
 
 
Section 4.11
 
Solvency
 
 
ARTICLE 5
 
COVENANTS
 
 
Section 5.1
 
Maintenance of Perfected Security Interest; Further
Documentation and Consents
 
 
Section 5.2
 
Changes in Locations, Name, Etc
 
 
Section 5.3
 
Pledged Collateral
 
 
Section 5.4
 
Accounts
 
 
Section 5.5
 
Commodity Contracts
 
 
Section 5.6
 
Delivery of Instruments and Tangible Chattel Paper and
Control of Investment Property, Letter-of-Credit Rights and
Electronic Chattel Paper
 
 
Section 5.7
 
Intellectual Property
 
 
Section 5.8
 
Notices
 
 
 
 
-i-
 

 
TABLE OF CONTENTS
(continued)
 
Page
 
 
Section 5.9
 
Notice of Commercial Tort Claims
 
 
ARTICLE 6
 
REMEDIAL PROVISIONS
 
 
Section 6.1
 
Code and Other Remedies
 
 
Section 6.2
 
Accounts and Payments in Respect of General Intangibles;
Contracts
 
 
Section 6.3
 
Pledged Collateral
 
 
Section 6.4
 
Contracts
 
 
Section 6.5
 
Proceeds to be Turned over to and Held by Collateral Agent
 
 
Section 6.6
 
Registration Rights
 
 
Section 6.7
 
Deficiency
 
 
ARTICLE 7
 
THE COLLATERAL AGENT
 
 
Section 7.1
 
Collateral Agent’s Appointment as Attorney-in-Fact
 
 
Section 7.2
 
Authorization to File Financing Statements
 
 
Section 7.3
 
Authority of Collateral Agent
 
 
Section 7.4
 
Duty: Obligations and Liabilities
 
 
ARTICLE 8
 
MISCELLANEOUS
 
 
Section 8.1
 
Reinstatement
 
 
Section 8.2
 
Release of Collateral
 
 
Section 8.3
 
Independent Obligations
 
 
Section 8.4
 
No Waiver by Course of Conduct
 
 
Section 8.5
 
Amendments in Writing
 
 
Section 8.6
 
Additional Grantors; Additional Pledged Collateral
 
 
Section 8.7
 
Notices
 
 
Section 8.8
 
Successors and Assigns
 
 
Section 8.9
 
Counterparts
 
 
Section 8.10
 
Severability
 
 
Section 8.11
 
Governing Law
 
 
Section 8.12
 
WAIVER OF JURY TRIAL
 
 
Section 8.13
 
Multiparty Agreement
 
 

 
  -ii-
 
 
 
 
TABLE OF CONTENTS
 
 
ANNEXES AND SCHEDULES
 
 
Annex 1
-
Form of Pledge Amendment
 
Annex 2
-
Form of Joinder Agreement
 
Annex 3
 
-
 
Form of Intellectual Property Security Agreement
 
Schedule 1
-
Commercial Tort Claims
 
Schedule 2
-
Filings
 
Schedule 3
-
Jurisdiction of Organization; Chief Executive Office
 
 
Schedule 4
-
Location of Inventory and Equipment
 
Schedule 5
-
Pledged Collateral
 
Schedule 6
 
-
 
Intellectual Property
 
 
 
-iii-
 

 
 

 
SECURITY AGREEMENT
 
SECURITY AGREEMENT, dated as of October 18, 2011, by CDF2 HOLDINGS, LLC, a Delaware limited liability company ( “ Holdings ”), and each of the other entities that becomes a party hereto pursuant to Section 8.6 (together with Holdings, the “ Grantors ”), in favor of Société Générale, New York Branch, as collateral agent (in such capacity, together with its successors and permitted assigns, the “ Collateral Agent ”) for CHG-MERIDIAN U.S. FINANCE, LTD., a California corporation (“ CHG ”), and any other CHG Lease Participants (as defined in the Multiparty Agreement) (collectively with CHG, the “ Secured Parties ”).
 
W I T N E S S E T H:
 
WHEREAS, CHG and any other CHG Lease Participants are providing a lease facility under two or more master lease agreements and associated lease schedules (collectively, the “ CHG Lease Agreement ”) to Holdings, as evidenced by the CHG Lease Facility Documents (as defined in the Multiparty Agreement), each dated as of even date herewith;
 
WHEREAS, each Grantor will derive substantial direct and indirect benefits from the CHG Lease Facility Documents; and
 
WHEREAS, it is a condition precedent to the obligations of CHG and any other CHG Lease Participants under the CHG Lease Facility Documents that the Grantors shall have executed and delivered this Agreement to the Collateral Agent.
 
NOW, THEREFORE, in consideration of the premises and to induce CHG and any other CHG Lease Participants to enter into the CHG Lease Facility Documents and to induce CHG and any other CHG Lease Participants to perform their obligations under the CHG Lease Facility Documents, each Grantor hereby agrees with the Collateral Agent as follows:
 
ARTICLE 1
DEFINED TERMS
 
Section 1.1                       Definitions .
 
(a)           Capital terms used herein without definition are used as defined in the Senior Credit Documents.
 
(b)           The following terms have the meanings given to them in the UCC and terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC (such meanings to be equally applicable to both the singular and plural forms of the terms defined): “ account ”, “ account debtor ”, “ as-extracted collateral ”, “ certificated security ”, “ chattel paper ”, “ commercial tort claim ”, “ commodity contract ”, “ deposit account ”, “ electronic chattel paper ”, “ equipment ”, “ farm products ”, “ fixture ”, “ general intangible ”, “ goods ”, “ health-care-insurance receivable ”, “ instruments ”, “ inventory ”, “ investment property ”, “ letter-of-credit right ”, “ proceeds ”, “ record ”, “ securities account ”, “ security ”, “ supporting obligation ” and “ tangible chattel paper ”.
 
(c)           The following terms shall have the following meanings:
 

 
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Agreement ” means this Security Agreement.
 
Applicable IP Office ” means the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency within or outside the United States.
 
CHG Lease Obligations ” has the meaning specified in the Multiparty Agreement.
 
Collateral ” has the meaning specified in Section 3.1 .  For avoidance of doubt and notwithstanding anything to the contrary herein, Collateral shall not include Excluded Stock and any proceeds thereof.
 
Contractual Obligation ” has the meaning specified in the Senior Credit Documents.
 
Contracts ” means all contracts, undertakings, or agreements (other than rights evidenced by chattel paper, documents or instruments) to which any Grantor now is, or hereafter will be, bound, or a party, beneficiary or assignee, in any event, including all contracts, undertakings, or agreements in or under which any Grantor may now or hereafter have any right, title or interest, including each Digital Cinema Deployment Agreement, each Exhibitor Agreement, each Supply Agreement, the Management Services Agreement, and any agreement relating to the terms of payment or the terms of performance of any account.
 
Control Agreement ” has the meaning specified in the Senior Credit Documents.
 
Customary Permitted Liens ” has the meaning specified in the Senior Credit Documents.
 
Effective Date ” has the meaning specified in the Senior Credit Documents.
 
Event of Default ” has the meaning specified in the CHG Lease Agreement.
 
Excluded Stock ” means the Stock of Holdings in the Senior Credit Agreement Borrower.
 
Material Adverse Effect ” has the meaning specified in the CHG Lease Agreement.
 
Multiparty Agreement ” means the Multiparty Agreement dated of even date herewith entered into by and among CINEDIGM DIGITAL FUNDING 2, LLC, a Delaware limited liability company, ACCESS DIGITAL CINEMA PHASE2 CORP., a Delaware corporation, Holdings, CINEDIGM DIGITAL CINEMA CORP., a Delaware corporation, each Grantor (as defined therein) from time to time party hereto, CHG, SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH, as collateral agent and administrative agent under the Senior Credit Documents, BALLANTYNE STRONG, INC., a Delaware corporation and the other Approved Vendors (as defined in the Senior Credit Documents) from time to time parties thereto.
 
Person ” has the meaning specified in the Senior Credit Documents.
 
Pledged Certificated Stock ” means, other than Excluded Stock, all certificated securities and any other Stock or Stock Equivalent of any Person evidenced by a certificate, instrument or other similar document (as defined in the UCC), in each case owned by any Grantor, and any
 

 
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distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Stock and Stock Equivalents set forth on Schedule 5 .
 
Pledged Collateral ” means, collectively, the Pledged Stock and the Pledged Debt Instruments.
 
Pledged Debt Instruments ” means all right, title and interest of any Grantor in instruments evidencing any Indebtedness owed to such Grantor or other obligations, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Indebtedness set forth on Schedule 5 , issued by the obligors named therein.
 
Pledged Investment Property ” means, other than Excluded Stock, any investment property owned by any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, other than any Pledged Stock or Pledged Debt Instruments.
 
Pledged Stock ” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.
 
Pledged Uncertificated Stock ” means, other than Excluded Stock, any Stock or Stock Equivalent of any Person owned by any Grantor that is not Pledged Certificated Stock, including all right, title and interest of any Grantor as a limited or general partner in any partnership not constituting Pledged Certificated Stock or as a member of any limited liability company, all right, title and interest of any Grantor in, to and under any Constituent Document of any partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including in each case those interests set forth on Schedule 5 , to the extent such interests are not certificated.
 
Secured Obligations ” has the meaning specified in Section 3.2 .
 
Requirement of Law ” has the meaning specified in the Senior Credit Documents.
 
Senior Credit Agreement Borrower ” means Cinedigm Digital Funding 2, LLC, a Delaware limited liability company.
 
Senior Credit Documents ” has the meaning specified in the Multiparty Agreement.
 
Software ” means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing, in each case included in or relating to the Collateral.
 
UCC ” means the Uniform Commercial Code as from time to time in effect in the State of New York; provided , however , that, in the event that, by reason of mandatory provisions of any applicable Requirement of Law, any of the attachment, perfection or priority of the Collateral Agent’s or any other Secured Party’s security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction other than the State of New York, “ UCC ” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the
 

 
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provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions.
 
Vehicles ” means all vehicles covered by a certificate of title law of any state.
 
Section 1.2                       Certain Other Terms .  The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. References herein to an Annex, Schedule, Article, Section or clause refer to the appropriate Annex or Schedule to, or Article, Section or clause in this Agreement. Where the context requires, provisions relating to any Collateral when used in relation to a Grantor shall refer to such Grantor’s Collateral or any relevant part thereof.
 
ARTICLE 2
[RESERVED]
 
ARTICLE 3
GRANT OF SECURITY INTEREST
 
Section 3.1                       Collateral . For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests is collectively referred to as the “ Collateral ”:
 
(a)           all accounts, chattel paper, Contracts, deposit accounts (including any concentration account and Cash Management Account), securities accounts, documents (as defined in the UCC), equipment, general intangibles, instruments, inventory, investment property, and any supporting obligations related thereto;
 
(b)           the commercial tort claims described on Schedule 1 and on any supplement thereto received by the Collateral Agent pursuant to Section 5.9 ;
 
(c)           all books and records pertaining to the other property described in this Section 3.1 ;
 
(d)           all property of such Grantor held by any Secured Party, including all property of every description, in the custody of or in transit to such Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have any right or power, including but not limited to cash;
 
(e)           all other goods (including but not limited to fixtures) and personal property of such Grantor, whether tangible or intangible and wherever located;
 
(f)           any and all additions, accessions and improvements to, all substitutions and replacements for and all products of or derived from the foregoing; and
 
(g)           to the extent not otherwise included, all proceeds of the foregoing.
 

 
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Notwithstanding anything to the contrary contained herein or in any other CHG Lease Facility Document, this Agreement shall not constitute nor evidence a grant of a security interest, collateral assignment or any other type of Lien in Excluded Stock or any proceeds thereof.
 
Section 3.2                       Grant of Security Interest in Collateral .  Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all CHG Lease Obligations of such Grantor (the “ Secured Obligations ”), hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and under the Collateral of such Grantor.  Without limitation of the foregoing, each Grantor collaterally assigns all of such Grantor’s right, title and interest in and to the Collateral to the Collateral Agent for the benefit of the holders of the Secured Obligations to secure the payment and performance of the Secured Obligations to the full extent that such a collateral assignment is possible under the relevant law.
 
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
 
To induce CHG and any other CHG Lease Participants to enter into the CHG Lease Facility Documents, each Grantor hereby represents and warrants each of the following to the Collateral Agent, CHG and the other Secured Parties:
 
Section 4.1                       Title; No Other Liens . Except for the Lien granted to the Collateral Agent pursuant to this Agreement and other Permitted Liens under any CHG Lease Facility Document or Senior Credit Document, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. Such Grantor (a) is the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien.
 
Section 4.2                       Perfection and Priority . The security interest granted pursuant to this Agreement constitutes a valid and continuing perfected security interest in favor of the Collateral Agent in all Collateral subject, for the following Collateral, to the occurrence of the following: (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of the filings and other actions specified on Schedule 2 (which, in the case of all filings and other documents referred to on such schedule with respect to Collateral existing as of the Effective Date, have been delivered to the Collateral Agent in completed and duly authorized form), (ii) in the case of any deposit account, the execution of a Control Agreement, (iii) in the case of all Copyrights, Trademarks and Patents for which UCC filings are insufficient, all appropriate filings having been made with the United States Copyright Office or the United States Patent and Trademark Office, as applicable, (iv) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of a Contractual Obligation granting control under the UCC to the Collateral Agent over such letter-of-credit rights, (v) in the case of electronic chattel paper, the completion of all steps necessary to grant control to the Collateral Agent over such electronic chattel paper under the UCC and (vi) in the case of Vehicles, the actions required under Section 5.1(e) .  Such security interest shall be prior
 

 
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to all other Liens on the Collateral except for Customary Permitted Liens having priority over the Collateral Agent’s Lien by operation of law, Liens granted pursuant to the Holdings Security Agreement (as defined in the Senior Credit Documents) or unless otherwise permitted by any CHG Lease Facility Document or Senior Credit Document or upon (i) in the case of all Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property, the delivery thereof to the Collateral Agent of such Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property consisting of instruments and certificates, in each case properly endorsed for transfer to the Collateral Agent or in blank, (ii) in the case of all Pledged Investment Property not in certificated form, the execution of Control Agreements with respect to such investment property and (iii) in the case of all other instruments and tangible chattel paper that are not Pledged Certificated Stock, Pledged Debt Instruments or Pledged Investment Property, the delivery thereof to the Collateral Agent of such instruments and tangible chattel paper.  Except as set forth in this Section 4.2 , as of the Effective Date all actions by each Grantor necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken. Upon the taking of the action described in this Section 4.2 , such security interest shall be prior to all other Liens on the Collateral except for Customary Permitted Liens having priority over the Collateral Agent’s Lien by operation of law, Liens granted pursuant to the Holdings Security Agreement (as defined in the Senior Credit Documents) or unless otherwise permitted by any Senior Credit Document or CHG Lease Facility Document.
 
Section 4.3                       Jurisdiction of Organization; Chief Executive Office . Such Grantor’s jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Grantor’s chief executive office or sole place of business, in each case as of the date hereof, is specified on Schedule 3 and such Schedule 3 also lists all jurisdictions of incorporation, legal names and locations of such Grantor’s chief executive office or sole place of business for the five years preceding the date hereof.
 
Section 4.4                       Locations of Inventory; Equipment and Books and Records . On the date hereof, such Grantor’s inventory and equipment (other than inventory or equipment in transit) and books and records concerning the Collateral are kept at the locations listed on Schedule 4 and such Schedule 4 also lists the locations of such inventory, equipment and books and records for the five years preceding the date hereof.
 
Section 4.5                        Pledged Collateral .
 
(a)           The Pledged Stock pledged by such Grantor hereunder (i) is listed on Schedule 5 and constitutes (or, in respect of Pledged Stock, the issuer of which is not a Subsidiary of or otherwise controlled by such Grantor, to such Grantor’s knowledge constitutes) that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on Schedule 5 , and (ii) with respect to Pledged Stock, the issuer of which is a Subsidiary of or otherwise controlled by such Grantor, has been duly authorized, validly issued and is fully paid and nonassessable (other than Pledged Stock in limited liability companies and partnerships) and (iii) to the extent constituting an obligation, constitutes the legal, valid and binding obligation of the issuer thereof with respect thereto, enforceable in accordance with its terms.
 
(b)           As of the Effective Date, all Pledged Collateral (other than Pledged Uncertificated Stock) and all Pledged Investment Property consisting of instruments and certificates in
 

 
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existence as of the Effective Date have been delivered to the Collateral Agent in accordance with Section 5.3(a) .
 
(c)           Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall be entitled to exercise all of the rights of the Grantor granting the security interest in any Pledged Stock, and a transferee or assignee of such Pledged Stock shall become a holder of such Pledged Stock to the same extent as such Grantor and shall be entitled to participate in the management of the issuer of such Pledged Stock to the same extent as such Grantor and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.
 
Section 4.6                        Instruments and Tangible Chattel Paper Formerly Accounts . No amount payable to such Grantor under or in connection with any account is evidenced by any instrument or tangible chattel paper involving an amount in excess of $250,000 in the aggregate at any one time that has not been delivered to the Collateral Agent, properly endorsed for transfer, to the extent delivery is required by Section 5.6(a) .
 
Section 4.7                        Intellectual Property .
 
(a)            Schedule 6 sets forth a true and complete list of the following Intellectual Property such Grantor owns, licenses or otherwise has the right to use:  (i) Intellectual Property that is registered or subject to applications for registration, (ii) Internet Domain Names and (iii) other Intellectual Property and material Software, separately identifying that owned and licensed to such Grantor and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by the Grantor with respect thereto.
 
(b)           On the Effective Date, all Intellectual Property owned by such Grantor is valid, in full force and effect, subsisting, unexpired and enforceable, and no Intellectual Property has been abandoned. No breach or default of any IP License shall be caused by any of the following, and none of the following shall limit or impair the ownership, use, validity or enforceability of, or any rights of such Grantor in, any Intellectual Property material to the business of such Grantor: (i) the consummation of the transactions contemplated by any CHG Lease Facility Document or Senior Credit Document or (ii) any holding, decision, judgment or order rendered by any Governmental Authority in existence as of the Effective Date.  As of the Effective Date, there are no pending (or, to the knowledge of such Grantor, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes challenging the ownership, use, validity, enforceability of, or such Grantor’s rights in, any Intellectual Property material to the business of such Grantor.  As of the Effective Date, to such Grantor’s knowledge, no Person has been or is infringing, misappropriating, diluting, violating or otherwise impairing any such Intellectual Property of such Grantor. Such Grantor, and to such Grantor’s knowledge each other party thereto, is not in material breach or default of any material IP License.
 
Section 4.8                        Commercial Tort Claims . The only commercial tort claims of any Grantor existing on the date hereof (regardless of whether the amount, defendant or other material facts
 

 
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can be determined and regardless of whether such commercial tort claim has been asserted, threatened or has otherwise been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on Schedule 1 , which sets forth such information separately for each Grantor.
 
Section 4.9                        Specific Collateral . None of the Collateral is or is proceeds or products of farm products, as-extracted collateral, health-care-insurance receivables or timber to be cut.
 
Section 4.10                        Enforcement . No Permit, notice to or filing with any Governmental Authority or any other Person or any consent from any Person is required for the exercise by the Collateral Agent of its rights (including voting rights) provided for in this Agreement or the enforcement of remedies in respect of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except as may be required in connection with the disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally or any approvals that may be required to be obtained from any bailees or landlords to collect the Collateral.
 
Section 4.11                        Solvency .  Grantor is Solvent on the date hereof and Grantor does not intend to incur or believe that it will incur, debts that will be beyond its ability to pay as such debts mature.
 
ARTICLE 5
COVENANTS
 
Each Grantor agrees with the Collateral Agent to the following, as long as any Secured Obligation remains outstanding:
 
Section 5.1                        Maintenance of Perfected Security Interest; Further Documentation and Consents .
 
(a)           Such Grantor shall (i) not use or permit any Collateral to be used in violation of any provision of any CHG Lease Facility Document or Senior Credit Document, any Requirement of Law in any material respect or any policy of insurance covering the Collateral and (ii) not enter into any Contractual Obligation or undertaking restricting the right or ability of such Grantor or the Collateral Agent to Sell any Collateral if such restriction would have a Material Adverse Effect.
 
(b)           Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4.2 and shall defend such security interest and such priority against the claims and demands of all Persons.
 
(c)           Such Grantor shall furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other documents in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail and in form and substance satisfactory to the Collateral Agent.
 
(d)           At any time and from time to time, upon the written request of the Collateral Agent, such Grantor shall, for the purpose of obtaining or preserving the full benefits of this
 

 
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Agreement and of the rights and powers herein granted, (i) promptly and duly execute and deliver, and have recorded, such further documents, including an authorization to file (or, as applicable, the filing) of any financing statement or amendment under the UCC (or other filings under similar Requirements of Law) in effect in any jurisdiction with respect to the security interest created hereby and (ii) take such further action as the Collateral Agent may reasonably request, including (A) securing all approvals necessary or appropriate for the assignment to or for the benefit of the Collateral Agent of any Contractual Obligation, including any IP License, held by such Grantor and to enforce the security interests granted hereunder and (B) executing and delivering any Control Agreements with respect to deposit accounts and securities accounts.
 
(e)           If requested by the Collateral Agent, the Grantor shall arrange for the Collateral Agent’s first priority security interest to be noted on the certificate of title of each Vehicle and shall file any other necessary documentation in each jurisdiction that the Collateral Agent shall deem advisable to perfect its security interests in any Vehicle.
 
Section 5.2                        Changes in Locations, Name, Etc . Except upon 30 days’ prior written notice to the Collateral Agent and delivery to the Collateral Agent of (a) all documents reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interests provided for herein and (b) if applicable, a written supplement to Schedule 4 showing any additional locations at which inventory or equipment shall be kept, such Grantor shall not do any of the following:
 
(i)           permit any inventory or equipment to be kept at a location other than those listed on Schedule 4 , except for inventory or equipment in transit;
 
(ii)           change its jurisdiction of organization or its location, in each case from that referred to in Section 4.3 ; or
 
(iii)           change its legal name or organizational identification number, if any, or corporation, limited liability company, partnership or other organizational structure to such an extent that any financing statement filed in connection with this Agreement would become misleading.
 
Section 5.3                        Pledged Collateral .
 
(a)            Delivery of Pledged Collateral . Such Grantor shall (i) deliver to the Collateral Agent, in suitable form for transfer and in form and substance satisfactory to the Collateral Agent, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates and instruments evidencing Pledged Investment Property and (ii) maintain all other Pledged Investment Property in a Cash Collateral Account.
 
(b)            Event of Default . During the continuance of an Event of Default, the Collateral Agent shall have the right, at any time in its discretion and without notice to the Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any Pledged Investment Property and (ii) exchange any certificate or instrument representing or evidencing any Pledged Collateral or any Pledged Investment Property for certificates or instruments of smaller or larger denominations.
 

 
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(c)            Cash Distributions with respect to Pledged Collateral . Except as provided in Article 6 , such Grantor shall be entitled to receive all cash, interest, dividends and distributions paid in respect of the Pledged Collateral or the Pledged Investment Property.
 
(d)            Voting Rights . Except as provided in Article 6 , such Grantor shall be entitled to exercise all voting, consent and corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral and the Pledged Investment Property; provided , however , that no vote shall be cast, consent given or right exercised or other action taken by such Grantor that would impair the Collateral or be inconsistent with or result in any violation of any provision of any CHG Lease Facility Document.
 
Section 5.4                        Accounts .
 
(a)           Such Grantor shall not without the Collateral Agent’s prior written consent, other than in the ordinary course of business, (i) grant any extension of the time of payment of any account, (ii) compromise or settle any account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any account, (iv) allow any credit or discount on any account or (v) amend, supplement or modify any account in any manner that could adversely affect the value thereof.
 
(b)           The Collateral Agent shall have the right to make test verifications of the accounts in any manner and through any medium that it reasonably considers advisable, and such Grantor shall furnish all such assistance and information as the Collateral Agent may reasonably require in connection therewith, provided , however , that unless a Default shall be continuing, (i) the Collateral Agent shall request no more than four such reports during any calendar year and (ii) the Collateral Agent may not directly contact any account debtor without Grantor’s prior written consent. At any time and from time to time, upon the Collateral Agent’s request, such Grantor shall cause independent public accountants or others satisfactory to the Collateral Agent to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the accounts; provided , however , that unless a Default shall be continuing, the Collateral Agent shall request no more than four such reports during any calendar year.
 
Section 5.5                        Commodity Contracts . Such Grantor shall not have any commodity contract other than with a Person approved by the Collateral Agent and subject to a Control Agreement.
 
Section 5.6                        Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper .
 
(a)           If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by an instrument or tangible chattel paper involving an amount in excess of $250,000 in the aggregate at any one time other than such instrument delivered in accordance with Section 5.3(a) and in the possession of the Collateral Agent, such Grantor shall mark all such instruments and tangible chattel paper with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interest of Société Générale, New York Branch, as Collateral Agent” and, at the request of the Collateral
 

 
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Agent, shall immediately deliver such instrument or tangible chattel paper to the Collateral Agent, duly indorsed in a manner satisfactory to the Collateral Agent.
 
(b)           Such Grantor shall not grant “control” (within the meaning of such term under Section 9-106 of the UCC) over any investment property to any Person other than the Collateral Agent.
 
(c)           If such Grantor is or becomes the beneficiary of a letter of credit that is not a supporting obligation of any Collateral, such Grantor shall promptly, and in any event within 2 Business Days after becoming a beneficiary, notify the Collateral Agent thereof and enter into a Contractual Obligation with the Collateral Agent, the issuer of such letter of credit or any nominated person with respect to the letter-of-credit rights under such letter of credit. Such Contractual Obligation shall assign such letter-of-credit rights to the Collateral Agent in a manner sufficient to grant control for the purposes of Section 9-107 of the UCC (or any similar section under any equivalent UCC). Such Contractual Obligation shall also direct all payments thereunder to a Cash Collateral Account. The provisions of the Contractual Obligation shall be in form and substance reasonably satisfactory to the Collateral Agent.
 
(d)           If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by electronic chattel paper, such Grantor shall take all steps necessary to grant the Collateral Agent control of all such electronic chattel paper for the purposes of Section 9-105 of the UCC (or any similar section under any equivalent UCC) and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.
 
Section 5.7                        Intellectual Property .
 
(a)           Promptly (and in any event within 10 Business Days) after any change to Schedule 6 for such Grantor, such Grantor shall provide the Collateral Agent notification thereof and the short-form intellectual property agreements and assignments as described in this Section 5.7 and other documents that the Collateral Agent reasonably requests with respect thereto.
 
(b)           Such Grantor shall (and shall cause all its licensees to) (i) (1) continue to use each Trademark material to such Grantor’s business included in the Intellectual Property in order to maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark is currently used, free from any claim of abandonment for non-use, (2) maintain at least the same standards of quality of products and services offered under such Trademark as are currently maintained, (3) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, and (4) not adopt or use any other Trademark that is confusingly similar or a colorable imitation of such Trademark unless the Collateral Agent shall obtain a perfected security interest in such other Trademark pursuant to this Agreement and (ii) not do any act or omit to do any act whereby, (w) any Trademark material to such Grantor’s business (or any goodwill associated therewith) may become destroyed, invalidated, impaired or harmed in any way, (x) any Patent material to such Grantor’s business included in the Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, (y) any portion of the Copyrights material to such Grantor’s business included in the Intellectual Property may become invalidated,
 

 
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otherwise impaired or fall into the public domain or (z) any Trade Secret material to such Grantor’s business that is Intellectual Property may become publicly available or otherwise unprotectable.
 
(c)           Such Grantor shall notify the Collateral Agent promptly if it knows that any application or registration relating to any Intellectual Property material to the business of such Grantor may become forfeited, misused, unenforceable, abandoned or dedicated to the public, or of any adverse determination or development regarding the validity or enforceability of such Grantor’s ownership of, interest in, right to use, register, own or maintain any such Intellectual Property (including the institution of, or any such determination or development in, any proceeding relating to the foregoing in any Applicable IP Office). Such Grantor shall take all actions that are necessary or reasonably requested by the Collateral Agent to maintain and pursue each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation included in the Intellectual Property material to the business of such Grantor.
 
(d)           Such Grantor shall not knowingly do any act or knowingly omit to do any act to infringe, misappropriate, dilute, violate or otherwise impair the Intellectual Property of any other Person. In the event that any Intellectual Property of such Grantor is or has been infringed, misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall take such action as it reasonably deems appropriate under the circumstances in response thereto, including promptly bringing suit and recovering all damages therefor to the extent it is commercially reasonable to do so.
 
(e)           Such Grantor shall execute and deliver to the Collateral Agent in form and substance reasonably acceptable to the Collateral Agent and suitable for (i) filing in the Applicable IP Office the short-form intellectual property security agreements in the form attached hereto as Annex 3 for all Copyrights, Trademarks, Patents and IP Licenses of such Grantor and (ii) recording with the appropriate Internet domain name registrar, a duly executed form of assignment for all Internet Domain Names of such Grantor (together with appropriate supporting documentation as may be requested by the Collateral Agent).
 
Section 5.8                        Notices . Such Grantor shall promptly notify the Collateral Agent in writing of its acquisition of any interest hereafter in property that is of a type where a security interest or lien must be or may be registered, recorded or filed under, or notice thereof given under, any federal statute or regulation.
 
Section 5.9                        Notice of Commercial Tort Claims . Such Grantor agrees that, if it shall acquire any interest in any commercial tort claim (whether from another Person or because such commercial tort claim shall have come into existence), (i) such Grantor shall, promptly upon such acquisition, deliver to the Collateral Agent, in each case in form and substance reasonably satisfactory to the Collateral Agent, a notice of the existence and nature of such commercial tort claim and a supplement to Schedule 1 containing a specific description of such commercial tort claim, (ii) Section 3.1 shall apply to such commercial tort claim and (iii) such Grantor shall execute and deliver to the Collateral Agent, in each case in form and substance reasonably satisfactory to the Collateral Agent, any document, and take all other action, reasonably deemed by the Collateral Agent to be reasonably necessary or appropriate for the Collateral Agent to
 

 
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obtain, on behalf of the Secured Parties, a perfected security interest having at least the priority set forth in Section 4.2 in all such commercial tort claims. Any supplement to Schedule 1 delivered pursuant to this Section 5.9 shall, after the receipt thereof by the Collateral Agent, become part of Schedule 1 for all purposes hereunder other than in respect of representations and warranties made prior to the date of such receipt.
 
ARTICLE 6
REMEDIAL PROVISIONS
 
Section 6.1                        Code and Other Remedies .
 
(a)            UCC Remedies . During the continuance of an Event of Default, the Collateral Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to any Secured Obligation, all rights and remedies of a secured party under the UCC or any other applicable law.
 
(b)            Disposition of Collateral . Without limiting the generality of the foregoing, the Collateral Agent may, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), during the continuance of any Event of Default (personally or through its agents or attorneys), (i) enter upon the premises where any Collateral is located, without any obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or any other Person notice or opportunity for a hearing on the Collateral Agent’s claim or action, (ii) collect, receive, appropriate and realize upon any Collateral and (iii) Sell, grant an option or options to purchase and deliver any Collateral (or enter into Contractual Obligations to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Collateral Agent shall have the right, upon any such public sale or sales and, to the extent permitted by the UCC and other applicable Requirements of Law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or equity is hereby waived and released.
 
(c)            Management of the Collateral . Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at the Collateral Agent’s request, it shall assemble the Collateral and make it available to the Collateral Agent at places that the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere, (ii) without limiting the foregoing, the Collateral Agent also has the right to require that each Grantor store and keep any Collateral pending further action by the Collateral Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii) until the Collateral Agent is able to Sell any Collateral, the Collateral Agent shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent and (iv) the Collateral Agent may, if it so elects, seek the appointment of a receiver or keeper to take
 

 
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possession of any Collateral and to enforce any of the Collateral Agent’s remedies (for the benefit of the Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment. The Collateral Agent shall not have any obligation to any Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to any Collateral while such Collateral is in the possession of the Collateral Agent.
 
(d)            Application of Proceeds . The Collateral Agent shall apply the cash proceeds of any action taken by it pursuant to this Section 6.1 , after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and any other Secured Party hereunder, including reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the CHG Lease Documents, and only after such application and after the payment by the Collateral Agent of any other amount required by any Requirement of Law, need the Collateral Agent account for the surplus, if any, to any Grantor.
 
(e)            Direct Obligation . Neither the Collateral Agent nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any Grantor, any other Loan Party or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof.  All of the rights and remedies of the Collateral Agent and any other Secured Party under any CHG Lease Facility Document shall be cumulative, may be exercised individually or concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any Secured Party, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.
 
(f)            Commercially Reasonable . To the extent that applicable Requirements of Law impose duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for the Collateral Agent to do any of the following:
 
(i)           fail to incur significant costs, expenses or other Liabilities reasonably deemed as such by the Collateral Agent to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;
 
(ii)           fail to obtain Permits, or other consents, for access to any Collateral to Sell or for the collection or Sale of any Collateral, or, if not required by other Requirements of Law, fail to obtain Permits or other consents for the collection or disposition of any Collateral;
 

 
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(iii)           fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;
 
(iv)           advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature or to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring any such Collateral;
 
(v)           exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature or, to the extent deemed appropriate by the Collateral Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;
 
(vi)           dispose of assets in wholesale rather than retail markets;
 
(vii)           disclaim disposition warranties, such as title, possession or quiet enjoyment; or
 
(viii)           purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of any Collateral or to provide the Collateral Agent a guaranteed return from the collection or disposition of any Collateral.
 
Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a non-exhaustive list of actions or omissions that are commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by the Secured Parties shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 6.1 . Without limitation upon the foregoing, nothing contained in this Section 6.1 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this Section 6.1 .
 
(g)            IP Licenses . For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Section 6.1 (including in order to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, Sell or grant options to purchase any Collateral) at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent, for the benefit of the Secured Parties, (i) an irrevocable, nonexclusive, worldwide license (exercisable without payment of royalty or other compensation to such Grantor), including in such license the right to sublicense, use and practice any Intellectual Property now owned or hereafter acquired by such Grantor and access to all media in which any of the licensed items may be recorded or stored and to all Software and programs used for the compilation or printout thereof and (ii) an irrevocable
 

 
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license (without payment of rent or other compensation to such Grantor) to use, operate and occupy all real property owned, operated, leased, subleased or otherwise occupied by such Grantor.
 
Section 6.2                        Accounts and Payments in Respect of General Intangibles; Contracts .
 
(a)           In addition to, and not in substitution for or limitation of, any similar requirement in the CHG Lease Agreement, if required by the Collateral Agent at any time during the continuance of an Event of Default, any payment of accounts or payment under any Contract or otherwise in respect of general intangibles, when collected by any Grantor, shall be promptly (and, in any event, within 2 Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent, in a Cash Collateral Account, subject to withdrawal by the Collateral Agent as provided in Section 6.4 . Until so turned over, such payment shall be held by such Grantor in trust for the Collateral Agent, and segregated from other funds of such Grantor. Each such deposit of proceeds of accounts and payments under any Contract or otherwise in respect of general intangibles shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.
 
(b)           At any time during the continuance of an Event of Default:
 
(i)           each Grantor shall, upon the Collateral Agent’s request, deliver to the Collateral Agent all original and other documents evidencing, and relating to, the Contracts and transactions that gave rise to any account or any payment in respect of general intangibles, including all original orders, invoices and shipping receipts and notify account debtors that the accounts or general intangibles have been collaterally assigned to the Collateral Agent and that payments in respect thereof shall be made directly to the Collateral Agent;
 
(ii)           the Collateral Agent may, without notice, at any time during the continuance of an Event of Default, limit or terminate the authority of a Grantor to collect its accounts or amounts due under Contracts, other general intangibles or any thereof and, in its own name or in the name of others, communicate with account debtors to verify with them to the Collateral Agent’s satisfaction the existence, amount and terms of any account or amounts due under any Contract or other general intangible. In addition, the Collateral Agent may at any time enforce such Grantor’s rights, under Contracts, under applicable law, or otherwise, against such account debtors and obligors of general intangibles; and
 
(iii)           each Grantor shall take all actions, deliver all documents and provide all information necessary or reasonably requested by the Collateral Agent to ensure any Internet Domain Name is registered.
 
(c)           Anything herein to the contrary notwithstanding, each Grantor shall remain liable to observe and perform all the conditions and obligations to be observed and performed by it under each Contract, each account and each payment in respect of general intangibles, all in accordance with the terms of any Contract or other agreement giving rise thereto. No Secured Party shall have any obligation or liability under any Contract or other agreement giving rise to an account or a payment in respect of a general intangible by reason of or arising out of any CHG Lease Facility Document or the receipt by any Secured Party of any payment relating
 

 
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thereto, nor shall any Secured Party be obligated in any manner to perform any obligation of any Grantor under or pursuant to any Contract or other agreement giving rise to an account or a payment in respect of a general intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
 
Section 6.3                        Pledged Collateral .
 
(a)            Voting Rights . During the continuance of an Event of Default, upon notice by the Collateral Agent to the relevant Grantor or Grantors, the Collateral Agent or its nominee may exercise (A) any voting, consent, corporate and other right pertaining to the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock, the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent may determine), all without liability except to account for property actually received by it; provided , however , that the Collateral Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
 
(b)            Proxies . In order to permit the Collateral Agent to exercise the voting and other consensual rights that it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Collateral Agent all such proxies, dividend payment orders and other instruments as the Collateral Agent may from time to time reasonably request and (ii) without limiting the effect of clause (i) above, such Grantor hereby grants to the Collateral Agent an irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations.
 
(c)            Authorization of Issuers .  Each Grantor hereby expressly irrevocably authorizes and instructs, without any further instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with any instruction received by it from the Collateral Agent in writing that states that an Event of Default is continuing and is
 

 
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otherwise in accordance with the terms of this Agreement and each Grantor agrees that such issuer shall be fully protected from Liabilities to such Grantor in so complying and (ii) unless otherwise expressly permitted hereby, pay any dividend or make any other payment with respect to the Pledged Collateral directly to the Collateral Agent.
 
Section 6.4                        Contracts .  Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, at its option, exercise one or more of the following remedies with respect to the Contracts that constitute Collateral:
 
(a)           (i) take any action permitted under Section 6.1 , Section 6.2 , or otherwise under this Agreement and (ii) in the place and stead of the applicable Grantor, exercise any other rights of such Grantor under the Contracts in accordance with the terms thereof.  Without limitation of the foregoing, each Grantor agrees that upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, but is not obligated to, give notices, consents and demands and make elections under the Contracts, modify or waive the terms of the Contracts and enforce the Contracts, in each case, to the same extent and on the same terms as such Grantor might have done.  It is understood and agreed that notwithstanding the exercise of such rights and/or the taking of such actions by the Collateral Agent, such Grantor shall remain liable for performance of its obligations under the Contracts;
 
(b)           upon receipt by the Collateral Agent of notice from any counterparty to any Contract (the “ Counterparties ”) of such Counterparty’s intent to terminate such Contract, the Collateral Agent shall be entitled, but shall not be obligated, to (i) cure or cause to be cured the condition giving rise to such Counterparty’s right of termination of such Contract, or (ii) acquire and assume (or assign and cause the assumption by a third party of) the rights and obligations of the applicable Grantor under such Contract; and
 
(c)           upon termination of any Contract by operation of law or otherwise, the Collateral Agent shall be entitled, but shall not be obligated, to enter into a new agreement (“ Successor Agreement ”) with the Counterparty to such terminated Contract, on the same terms and with the same provisions as such terminated Contract.  Each Grantor shall have no rights or obligations whatsoever with respect to any Successor Agreement (it being understood that nothing herein shall release the Grantor of any obligations it may have under such terminated Contract).
 
Each Grantor acknowledges that the rights of the Collateral Agent described in this Section 6.4 are necessary to protect the interests of the Secured Parties and agrees to accept any actions taken by Collateral Agent in accordance with this Section 6.4 .  It is also understood and agreed that notwithstanding the taking of any such actions by the Collateral Agent pursuant to this Section 6.4 , the Collateral Agent shall not incur any liability to such Grantor or any other Person as a result of any such actions, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of the Collateral Agent (each as determined in a final, non-appealable judgment by a court of competent jurisdiction).  Each Grantor (i) authorizes the actions of the Counterparties under this Section 6.4 and (ii) agrees that following the receipt by the Collateral Agent of such notice described under subsection (b) above, or upon termination of any Contract as described in subsection (c), the Counterparties are authorized to, without further inquiry, rely on and act in accordance with any instructions such Counterparty receives which
 

 
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purport to be originated from the Collateral Agent without further consent from such Grantor notwithstanding any conflicting or contrary instructions such Counterparty receives from such Grantor, and such Counterparty shall have no liability to the Collateral Agent, the Grantors or any other Person in relying on and acting in accordance with any such instructions.
 
Section 6.5                        Proceeds to be Turned over to and Held by Collateral Agent . Unless otherwise expressly provided in the CHG Lease Agreement, the Senior Credit Documents or this Agreement, all proceeds of any Collateral received by any Grantor hereunder in cash or Cash Equivalents shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be turned over to the Collateral Agent in the exact form received (with any necessary endorsement). All such proceeds of Collateral and any other proceeds of any Collateral received by the Collateral Agent in cash or Cash Equivalents shall be held by the Collateral Agent in a Cash Collateral Account. All proceeds being held by the Collateral Agent in a Cash Collateral Account (or by such Grantor in trust for the Collateral Agent) shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in the CHG Lease Agreement.
 
Section 6.6                        Registration Rights .
 
(a)           If, in the opinion of the Collateral Agent, it is necessary or advisable to Sell any portion of the Pledged Collateral by registering such Pledged Collateral under the provisions of the Securities Act of 1933 (the “ Securities Act ”), each relevant Grantor shall cause the issuer thereof (or, to the extent the issuer thereof is not a Subsidiary or otherwise controlled by such Grantor, use commercially reasonable efforts to cause the issuer thereof) to do or cause to be done all acts as may be, in the opinion of the Collateral Agent, necessary or advisable to register such Pledged Collateral or that portion thereof to be Sold under the provisions of the Securities Act, all as directed by the Collateral Agent in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto and in compliance with the securities or laws of any jurisdiction that the Collateral Agent shall designate.
 
(b)           Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act and applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act or under applicable state securities laws even if such issuer would agree to do so.
 

 
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(c)           Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of any portion of the Pledged Collateral pursuant to this Section 6.6 valid and binding and in compliance with all applicable Requirements of Law. Each Grantor further agrees that a breach of any covenant contained in this Section 6.6 will cause irreparable injury to the Collateral Agent and other Secured Parties, that the Collateral Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.6 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the CHG Lease Agreement.
 
Section 6.7                        Deficiency . Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed by the Collateral Agent or any other Secured Party to collect such deficiency.
 
ARTICLE 7
THE COLLATERAL AGENT
 
Section 7.1                        Collateral Agent’s Appointment as Attorney-in-Fact .
 
(a)           Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any Related Person thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of the CHG Lease Facility Documents, to take any appropriate action and to execute any document or instrument that may be necessary or desirable to accomplish the purposes of the CHG Lease Facility Documents, and, without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent and its Related Persons the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the following when an Event of Default shall be continuing:
 
(i)           in the name of such Grantor, in its own name or otherwise, take possession of and indorse and collect any check, draft, note, acceptance or other instrument for the payment of moneys due under any account or general intangible or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any such moneys due under any Contract, account or general intangible or with respect to any other Collateral whenever payable;
 
(ii)           in the case of any Intellectual Property owned by or licensed to the Grantors, execute, deliver and have recorded any document that the Collateral Agent may request to evidence, effect, publicize or record the Collateral Agent’s security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;
 

 
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(iii)           pay or discharge taxes and Liens levied or placed on or threatened against any Collateral, effect any repair or pay any insurance called for by the terms of the CHG Lease Agreement (including all or any part of the premiums therefor and the costs thereof);
 
(iv)           execute, in connection with any sale provided for in Section 6.1 or Section 6.6 , any document to effect or otherwise necessary or appropriate in relation to evidence the Sale of any Collateral; or
 
(v)           (A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct, (B) ask or demand for, and collect and receive payment of and receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral, (C) sign and indorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment, verification, notice and other document in connection with any Collateral, (D) commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other right in respect of any Collateral, (E) defend any actions, suits, proceedings, audits, claims, demands, orders or disputes brought against such Grantor with respect to any Collateral, (F) settle, compromise or adjust any such actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate, (G) assign any Intellectual Property owned by the Grantors or any IP Licenses of the Grantors throughout the world on such terms and conditions and in such manner as the Collateral Agent shall in its sole discretion determine, including the execution and filing of any document necessary to effectuate or record such assignment, (H) take any of the actions described in Sections 6.2 and 6.4 , and (I) generally, Sell, grant a Lien on, make any Contractual Obligation with respect to and otherwise deal with, any Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes and do, at the Collateral Agent’s option, at any time or from time to time, all acts and things that the Collateral Agent deems necessary to protect, preserve or realize upon any Collateral and the Secured Parties’ security interests therein and to effect the intent of the CHG Lease Facility Documents, all as fully and effectively as such Grantor might do.
 
(b)           If any Grantor fails to perform or comply with any Contractual Obligation contained herein, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such Contractual Obligation.
 
(c)           The expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 7.1 , from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable to the Collateral Agent in accordance with Section 4 of the Multiparty Agreement.
 
(d)           Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 7.1 . All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the Secured Obligations are indefeasibly paid in full.
 

 
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Section 7.2                        Authorization to File Financing Statements . Each Grantor authorizes the Collateral Agent and its Related Persons, at any time and from time to time, to file or record financing statements, amendments thereto, and other filing or recording documents or instruments with respect to any Collateral in such form and in such offices as the Collateral Agent reasonably determines appropriate to perfect the security interests of the Collateral Agent under this Agreement, and such financing statements and amendments may describe the Collateral covered thereby as “all assets of the debtor” provided it excludes Excluded Stock. A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction. Such Grantor also hereby ratifies its authorization for the Collateral Agent to have filed any initial financing statement or amendment thereto under the UCC (or other similar laws) in effect in any jurisdiction if filed prior to the date hereof.
 
Section 7.3                        Authority of Collateral Agent . Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed by the CHG Lease Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such authority.
 
Section 7.4                        Duty: Obligations and Liabilities .
 
(a)            Duty of Collateral Agent . The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. The powers conferred on the Collateral Agent hereunder are solely to protect the Collateral Agent’s interest in the Collateral and shall not impose any duty upon the Collateral Agent to exercise any such powers. The Collateral Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Related Persons shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. In addition, the Collateral Agent shall not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Collateral Agent in good faith.
 
(b)            Obligations and Liabilities with respect to Collateral . No Secured Party and no Related Person thereof shall be liable for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any Collateral. The powers conferred on the Collateral Agent hereunder shall not impose any duty upon any other Secured Party to exercise any such powers. The other Secured Parties shall be accountable only for amounts that they actually receive as a
 

 
22

 

result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
 
ARTICLE 8
MISCELLANEOUS
 
Section 8.1                        Reinstatement . Each Grantor agrees that, if any payment made by any Loan Party or other Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured Party to such Loan Party, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect as fully as if such payment had never been made. If, prior to any of the foregoing, any Lien or other Collateral securing such Grantor’s liability hereunder shall have been released or terminated by virtue of the foregoing, such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.
 
Section 8.2                        Release of Collateral .
 
(a)           Upon the full and final payment of the CHG Lease Obligations, the Collateral shall be released from the Lien created hereby and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. Each Grantor is hereby authorized to file at such time UCC amendments and any other necessary documents evidencing the termination of the Liens so released. At the request of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral of such Grantor held by the Collateral Agent hereunder and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.
 
(b)           If the Collateral Agent shall be directed by CHG and any other CHG Lease Participants to release any Lien or any Collateral, such Collateral shall be released from the Lien created hereby to the extent provided under, and subject to the terms and conditions set forth in, such clauses (i) and (ii) . In connection therewith, the Collateral Agent, at the request of any Grantor, shall execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such release.
 
(c)           At the time provided in the Senior Credit Documents and at the request of Holdings, a Grantor shall be released from its obligations hereunder in the event that all the Securities of such Grantor shall be Sold to any Person that is not an Affiliate of Holdings,
 

 
23

 

Holdings and the Subsidiaries of Holdings in a transaction permitted by the Senior Credit Documents.
 
Section 8.3                        Independent Obligations . The obligations of each Grantor hereunder are independent of and separate from the Secured Obligations of any other Grantor. If any Secured Obligation is not paid when due, or upon any Event of Default, the Collateral Agent may, at its sole election, proceed directly and at once, without notice, against any Grantor and any Collateral to collect and recover the full amount of any Secured Obligation then due, without first proceeding against any other Grantor, any other Loan Party, or any other Collateral and without first joining any other Grantor or any other Loan Party in any proceeding.
 
Section 8.4                        No Waiver by Course of Conduct . No Secured Party shall by any act (except by a written instrument pursuant to Section 8.5 ), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such Secured Party would otherwise have on any future occasion.
 
Section 8.5                        Amendments in Writing . None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with the CHG Lease Agreement; provided , however , that annexes to this Agreement may be supplemented (but no existing provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder Agreements, in substantially the form of Annex 1 and Annex 2 , respectively, in each case duly executed by the Collateral Agent and each Grantor directly affected thereby.
 
Section 8.6                        Additional Grantors; Additional Pledged Collateral .
 
(a)            Joinder Agreements .  If Holdings shall form or acquire any Subsidiary (other than the Senior Credit Agreement Borrower or any Subsidiary of the Senior Credit Agreement Borrower) which shall obtain any interest in any portion of the Collateral, Holdings shall cause such Subsidiary to become a Grantor hereunder, such Subsidiary shall execute and deliver to the Collateral Agent a Joinder Agreement substantially in the form of Annex 2 and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date.
 
(b)            Pledge Amendments .  To the extent any Pledged Collateral has not been delivered as of the Effective Date, such Grantor shall deliver a pledge amendment duly executed by the Grantor in substantially the form of Annex 1 (each, a “ Pledge Amendment ”). Such Grantor authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement.
 
Section 8.7                        Notices .  All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in the CHG Lease
 

 
24

 

Agreement; provided , however , that any such notice, request or demand to or upon any Grantor shall be addressed to Holdings’ notice address as set forth in the CHG Lease Agreement.
 
Section 8.8                        Successors and Assigns . This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of each Secured Party and their successors and assigns; provided , however , that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent.
 
Section 8.9                        Counterparts . This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or by Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.
 
Section 8.10                        Severability . Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision in any other jurisdiction.
 
Section 8.11                        Governing Law . This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 
Section 8.12                        WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.12 .
 
Section 8.13                        Multiparty Agreement .  Notwithstanding anything to the contrary in this Agreement, the rights and remedies of the Collateral Agent and the Secured Parties (including the rights and remedies provided in Article 6 hereof) (a) are in addition to, and not in lieu of, its rights and remedies under the Multiparty Agreement and (b) are subject to the terms of the Multiparty Agreement.  In the event of any conflict between the terms of the Multiparty Agreement and this Agreement, the terms of the Multiparty Agreement shall govern and control.
 

 

 
25

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written.
 

 
CDF2 HOLDINGS, LLC, as Grantor
 
 
 
   
By:
 /s/ Gary S. Loffredo
   
Name:
 Gary S. Loffredo
   
Title:
President


 

Signature Page to Security Agreement
 
 

 

ACCEPTED AND AGREED
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
as Collateral Agent
 
 
   
By:
/s/ Richard O. Knowlton
   
 
Richard O. Knowlton
Managing Director
 
   
       

Signature Page to Security Agreement
 
 

 

ANNEX 1
 
TO
 
SECURITY AGREEMENT 1
 
FORM OF PLEDGE AMENDMENT
 
This PLEDGE AMENDMENT, dated as of _____ ___, 20__, is delivered pursuant to Section 8.6 of the Security Agreement, dated as of October 18, 2011, by CDF2 Holdings, LLC (“ Holdings ”), the undersigned Grantor and the other Affiliates of Holdings from time to time party thereto as Grantors in favor of Société Générale, New York Branch, as collateral agent for the Secured Parties referred to therein (the “ Security Agreement ”). Capitalized terms used herein without definition are used as defined in the Security Agreement.
 
The undersigned hereby agrees that this Pledge Amendment may be attached to the Security Agreement and that the Pledged Collateral listed on Annex 1-A to this Pledge Amendment shall be and become part of the Collateral referred to in the Security Agreement and shall secure all Secured Obligations of the undersigned.
 
The undersigned hereby represents and warrants that each of the representations and warranties contained in Sections 4.1 , 4.2 , 4.5 and 4.10 of the Security Agreement is true and correct in respect of the Pledged Collateral listed on Annex 1-A as of the date hereof as if made on and as of such date.
 

 
[GRANTOR]
 
 
 
   
By:
 
   
Name:
 
   
Title:
 

 
 
 
 

_______________________________
 
1 To be used for pledge of undelivered Pledged Collateral by existing Grantor.

Annex 1 to and Security Agreement
-1-
 
 

 

ANNEX 1-A
 
PLEDGED STOCK
 
Issuer
Class
Certificate No(s)
Par Value
Number of Shares, Units or Interests
         
 
PLEDGED DEBT INSTRUMENTS
 
Issuer
Description of Debt
Certificate No(s)
Final Maturity
Principal Amount
         

 
 
 
ACKNOWLEDGED AND AGREED
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 

 

   
By:
     
Name:
     
Title:
     



Annex 1 to and Security Agreement
-2-
 
 

 

ANNEX 2
 
TO
 
SECURITY AGREEMENT
 
FORM OF JOINDER AGREEMENT
 
This JOINDER AGREEMENT, dated as of _____ ___, 20__, is delivered pursuant to Section 8.6 of the Security Agreement, dated as of October 18, 2011, by CDF2 Holdings, LLC (“ Holdings ”) and the Affiliates of Holdings from time to time party thereto as Grantors in favor of Société Générale, New York Branch, as collateral agent for the Secured Parties referred to therein (the “ Security Agreement ”). Capitalized terms used herein without definition are used as defined in the Security Agreement.
 
By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 8.6 of the Security Agreement, hereby becomes a party to the Security Agreement as a Grantor thereunder with the same force and effect as if originally named as a Grantor therein and, without limiting the generality of the foregoing, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of the undersigned, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned and expressly assumes all obligations and liabilities of a Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of the Security Agreement.
 
The information set forth in Annex 1-A is hereby added to the information set forth in Schedules 1 through 6 to the Security Agreement.  By acknowledging and agreeing to this Joinder Agreement, the undersigned hereby agree that this Joinder Agreement may be attached to the Security Agreement and that the Pledged Collateral listed on Annex 1-A to this Joinder Amendment shall be and become part of the Collateral referred to in the Security Agreement and shall secure all Secured Obligations of the undersigned.
 
The undersigned hereby represents and warrants that each of the representations and warranties contained in Article 4 of the Security Agreement applicable to it is true and correct on and as the date hereof as if made on and as of such date.
 

Annex 2 to Security Agreement
-1-
 
 

 

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.
 
 
 
 
[ADDITIONAL GRANTOR]
 
 
 
   
By:
 
   
Name:
 
   
Title:
 
 
 
 

 
Annex 2 to Security Agreement
-2-
 
 

 

 
ACKNOWLEDGED AND AGREED
as of the date first above written:

CDF2 HOLDINGS, LLC,
as Grantor

   
By:
     
Name:
     
Title:
     


 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent

   
By:
     
Name:
     
Title:
     

 
 

 

Annex 2 to Security Agreement
-3-
 
 

 

ANNEX 1-A
 
[Description of Collateral to be added to Schedules 1 through 6 to the Security Agreement]
 

 

Annex 2 to Security Agreement
-4-
 
 

 

ANNEX 3
TO
SECURITY AGREEMENT
 
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
 
THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of _____ ___, 20__, is made by each of the entities listed on the signature pages hereof (each a “ Grantor ” and, collectively, the “ Grantors ”), in favor of Société Générale, New York Branch, as collateral agent (in such capacity, together with its successors and permitted assigns, the “ Collateral Agent ”) for the Secured Parties (as defined in the Security Agreement referred to below).
 
W I T N E S S E T H:
 
WHEREAS, pursuant to a Security Agreement of even date herewith in favor of the Collateral Agent (the “ Security Agreement ”), each each Grantor has agreed to grant a security interest in its assets to secure the Secured Obligations (as defined therein); and
 
WHEREAS, all of the Grantors are party to the Security Agreement pursuant to which the Grantors are required to execute and deliver this [Copyright] [Patent] [Trademark] Security Agreement;
 
NOW, THEREFORE, in consideration of the premises and to induce CHG and any other CHG Lease Participants to enter into the CHG Lease Facility Documents and to make their respective extensions of credit to Holdings thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
 
Section 1.                       Defined Terms . Capitalized terms used herein without definition are used as defined in the Security Agreement.
 
Section 2.                       Grant of Security Interest in [Copyright] [Trademark] [Patent] Collateral . Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and under the following Collateral of such Grantor (the “ [Copyright] [Trademark] [Patent] Collateral ”):
 
(a)           [all of its Copyrights and all IP Licenses providing for the grant by or to such Grantor of any right under any Copyright, including, without limitation, those referred to on Schedule 1 hereto;
 
(b)           all renewals, reversions and extensions of the foregoing; and
 
(c)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all
 

Annex 3 to Security Agreement
-1-
 
 

 

rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
or
 
(a)           [all of its Patents and all IP Licenses providing for the grant by or to such Grantor of any right under any Patent, including, without limitation, those referred to on Schedule 1 hereto;
 
(b)           all reissues, reexaminations, continuations, continuations-in-part, divisionals, renewals and extensions of the foregoing; and
 
(c)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
or
 
(a)           [all of its Trademarks and all IP Licenses providing for the grant by or to such Grantor of any right under any Trademark, including, without limitation, those referred to on Schedule 1 hereto;
 
(b)           all renewals and extensions of the foregoing;
 
(c)           all goodwill of the business connected with the use of, and symbolized by, each such Trademark; and
 
(d)           all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
 
Section 3.                       Security Agreement . The security interest granted pursuant to this [Copyright] [Patent] [Trademark] Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and each Grantor hereby acknowledges and agrees that the rights and remedies of the Collateral Agent with respect to the security interest in the [Copyright] [Patent] [Trademark] Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
 
Section 4.                       Grantor Remains Liable . Each Grantor hereby agrees that, anything herein to the contrary notwithstanding, such Grantor shall assume full and complete responsibility for the prosecution, defense, enforcement or any other necessary or desirable actions in connection with their [Copyrights] [Patents] [Trademarks] and IP Licenses subject to a security interest hereunder.
 

Annex 3 to Security Agreement
-2-
 
 

 

Section 5.                       Counterparts . This [Copyright] [Patent] [Trademark] Security Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.
 
Section 6.                       Governing Law . This [Copyright] [Patent] [Trademark] Security Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 
[SIGNATURE PAGES FOLLOW]
 

Annex 3 to Security Agreement
-3-
 
 

 
 
 
 

 
IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent] [Trademark] Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.
 
 
 
 
Very truly yours,
 
[GRANTOR], as Grantor
 
 
 
   
By:
 
   
Name:
 
   
Title:
 

ACCEPTED AND AGREED
 
as of the date first above written:

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH
as Collateral Agent
 
 
   
By:
     
Name:
     
Title:
     

 
 
 
 

Annex 3 to Security Agreement
-4-
 
 

 

ACKNOWLEDGMENT OF GRANTOR
 
 
 
STATE OF ____________________
)
 
 
) ss.
 
COUNTY OF __________________
)
 
 
On this ___ day of _____ ___, 20__ before me personally appeared _____ proved to me on the basis of satisfactory evidence to be the person who executed the foregoing instrument on behalf of _____, who being by me duly sworn did depose and say that he is an authorized officer of said corporation, that the said instrument was signed on behalf of said corporation as authorized by its Board of Directors and that he acknowledged said instrument to be the free act and deed of said corporation.
 
 
 
 
   
 
 
   
 
  Notary Public
   
 
 
 
 

Annex 3 to Security Agreement
-5-
 
 

 

SCHEDULE I
TO
[COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT
 
[Copyright] [Patent] [Trademark] Registrations
 
A.            REGISTERED [COPYRIGHTS] [PATENTS] [TRADEMARKS]
 
[Include Registration Number and Date]
 
B.            [COPYRIGHT] [PATENT] [TRADEMARK] APPLICATIONS
 
[Include Application Number and Date]
 
C.            IP LICENSES
 
[Include complete legal description of agreement (name of agreement, parties and date)]
 
 
 

 
 

Annex 3 to Security Agreement
-6-
 
 

 

SCHEDULE 1 – COMMERCIAL TORT CLAIMS
 
None
 
 
 
 

Schedule 1 to Security Agreement
-1-
 
 

 

SCHEDULE 2 – FILINGS
 
UCC Financing Statement covering all of assets of CDF2 Holdings, LLC (other than Excluded Stock) and naming CDF2 Holdings, LLC, as debtor, and Société Générale, New York Branch, as collateral agent, on behalf of  the Secured Parties, to be filed with the Delaware Secretary of State.
 
 
 
 
 

Schedule 2 to Security Agreement
-1-
 
 

 

SCHEDULE 3 – JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE
 
 
Legal Name:
 
CDF2 Holdings, LLC
Jurisdiction of Organization:
 
Delaware
Organizational Identification Number:
 
4889179
Chief Executive Office:
CDF2 Holdings, LLC
55 Madison Avenue, Suite 300
Morristown, NJ 07960
 
Any other Jurisdiction of Organization,
Legal Name or Chief Executive Office
in the past five years:
 
 
None
 

 
 

Schedule 3 to Security Agreement
-1-
 
 

 

 
SCHEDULE 4 – LOCATION OF INVENTORY AND EQUIPMENT
 
Name of Theatre
Address
City
State and Zip Code
Screen #
College Square
6301 University Avenue
Cedar Falls
IA 50613
12
Coral Ridge Cinema
1451 Coral Ridge Avenue
Coralville
IA 52241
10
Crossroads Cinema
2450 Crossroads Blvd.
Waterloo
IA 50702
12
Sycamore Cinema
1602 Sycamore Street
Iowa City
IA 52240
12
Addison Cinemas
1555 West Lake Street
Addison
IL 60101
21
Chicago Heights Cinema
1301 Hilltop Avenue
Chicago Heights
IL 60411
14
Elgin Cinema
111 South Randall Road
Elgin
IL 60123
15
Gurnee Cinema
6144 Grand Avenue
Gurnee
IL 60031
20
Orland Park Cinemas
16350 South LaGrange Road
Orland Park
IL 60467
15
Duluth Cinema
300 Harbor Drive
Duluth
MN 55802
10
Elk River Cinema
570 Freeport
Elk River Mall
Elk River
MN 55330
17
Hastings Cinema
1325 South Frontage Road
Hastings
MN 55033
9
Lakes Cinema
4351 Stebner Road
Hermantown
MN 55811
10
Oakdale Cinema
5677 Hadley Avenue
Oakdale
MN 55128
17
Parkwood Cinema
1533 Frontage Road
North Waite Park
MN 56387
17
Rosemount Cinema
15280 Carrousel Way
Rosemount
MN 55068
8
Shakopee Cinema
1116 Shakopee Town Square
Shakopee
MN 55379
11
Century Cinema
3931 9 th Avenue SW
Fargo
ND 58103
10
West Acres Cinema
4101 17th Avenue SW
Fargo
ND 58103
14
20 Grand Cinemas
14304 West Maple Road
Omaha
NE 68164
19
Edgewood Cinema
5220 South 56th Street
Lincoln
NE 68516
6
Lincoln Grand Cinema
1101 P Street
Lincoln Grand
NE 68508
14
South Pointe Cinema
2920 Pine Lake Road
Lincoln
NE 68516
6
Twin Creek Cinema
3909 Raynor Parkway
Bellevue
NE 68123
16
Village Pointe Cinema
304 North 174th Street
Omaha
NE 68118
16
Crosswoods Cinema
200 Hutchinson Avenue
Columbus
OH 43234
17
Pickerington Cinema
1776 Hill Road North
Pickerington
OH 43147
17
Appleton East Cinema
W3091 Van Roy Road
Appleton
WI 54915
16
Bay Park Cinema
755 Willard Drive
Green Bay
WI 54324
16
Campus Ripon
103 Watson Street
Ripon
WI 54971
1
Cedar Creek Cinema
10101 Market Street, Box D20
Rothschild
WI 54474
10

 
Schedule 4 to Security Agreement
-1
 
 

 

Name of Theatre
Address
City
State and Zip Code
Screen #
La Crosse Cinema
2032 Warci Avenue
La Crosse
WI 54601
11
Eastgate Cinema
5202 High Crossing Blvd.
Madison
WI 53704
16
Green Bay East Cinema
100Q Kepler Drive
Green Bay
WI 54311
12
Hillside Cinema
2950 Hillside Drive
Delafield
WI 53018
14
Hollywood Cinema — Grand Chute
513 North Westhill Blvd.
Grand Chute
WI 54914
14
Majestic Cinema of Brookfield
770 North Springdale Road
Waukesha
WI 53186
16
Menomonee Falls Cinema
W180 N9393 Premier Lane
Menomonee Falls
WI 53051
16
North Shore Cinema
11700 North Port Washington Road
Mequon
WI 53092
11
Oshkosh Cinema
340 South Koeller Street
Oshkosh
WI 54902
12
Point Cinema
7825 Big Sky Drive
Madison
WI 53719
15
Renaissance Cinema
10411 Washington Avenue
Sturtevant
WI 53177
13
Ridge Cinema
5200 South Moorland Road
New Berlin
WI 53151
19
Saukville Cinema
350 S. Riverside Drive
Saukville
WI 53080
12
Sheboygan Cinema
3226 Kohler Memorial Drive
Sheboygan
WI 53081
13
South Shore Cinema
7261 South 13th Street
 
Oak Creek
WI 53154
16

 
 
Books and Records
 
Cinedigm Digital Funding 2, LLC
 
55 Madison Avenue, Suite 300
 
Morristown, NJ 07960
 
 
 
 

Schedule 4 to Security Agreement
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SCHEDULE 5 – PLEDGED COLLATERAL
 
None
 
 
 
 

Schedule 5 to Security Agreement
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SCHEDULE 6 – INTELLECTUAL PROPERTY
 
CDF2 Holdings, LLC licenses Access Digital Media Inc.’s proprietary software products pursuant to that certain Software License Agreement, dated as of October 18, 2011, among CDF2 Holdings, LLC, Cinedigm Digital Funding 2, LLC and Access Digital Media, Inc.
 
CDF2 Holdings, LLC licenses Hollywood Software Inc.’s proprietary software products pursuant to that certain Software License Agreement, dated as of October 18, 2011, among CDF2 Holdings, LLC, Cinedigm Digital Funding 2, LLC and Hollywood Software, Inc.
 
 
 
 

Schedule 6 to Security Agreement
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EXHIBIT 4.5
 
EXECUTION VERSION
PLEDGE AGREEMENT
 
This PLEDGE AGREEMENT, dated as of October 18, 2011 (together with all amendments, if any, from time to time hereto, this “ Agreement ”), between ACCESS DIGITAL CINEMA PHASE 2, CORP., a Delaware limited liability company (the “ Pledgor ”) and SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH, as collateral agent (in such capacity, together with its successors and permitted assigns, the “ Collateral Agent ”) for the Secured Parties (as defined in the Credit Agreement referred to below).
 
INTRODUCTION
 
1.           Pursuant to that certain Credit Agreement dated as of October 18, 2011, by and among Cinedigm Digital Funding 2, LLC, a Delaware limited liability company (the “ Borrower ”), the Lenders party thereto, Société Générale, New York Branch, as administrative agent for the Lenders, and the Collateral Agent (including all annexes, exhibits and schedules thereto, and as from time to time amended, restated, supplemented or otherwise modified, the “ Credit Agreement ”), the Lenders have agreed to make Loans to the Borrower;
 
2.           Pledgor is the record and beneficial owner of the shares of Stock listed on Schedule I hereto;
 
3.           Pledgor benefits from the credit facilities made available to the Borrower under the Credit Agreement;
 
4.           In order to induce the Lenders to make the Loans as provided for in the Credit Agreement, Pledgor has agreed to pledge the Pledged Collateral to the Collateral Agent in accordance herewith;
 
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and to induce the Lenders to make Loans under the Credit Agreement, it is agreed as follows:
 
1.            Definitions . Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined, and the following shall have (unless otherwise provided elsewhere in this Agreement) the following respective meanings (such meanings being equally applicable to both the singular and plural form of the terms defined):
 
Bankruptcy Code ” means title 11, United States Code, as amended from time to time, and any successor statute thereto.
 
Pledged Collateral ” has the meaning assigned to such term in Section 2 hereof.
 
Pledged Entity ” means an issuer of Pledged Shares.
 
Pledged Shares ” means those shares listed on Schedule I hereto and on each Pledge Amendment attached hereto.
 

 
 

 

Secured Obligations ” has the meaning assigned to such term in Section 3 hereof.
 
2.            Pledge . Pledgor hereby pledges to the Collateral Agent, and grants to the Collateral Agent for itself and the benefit of the Secured Parties, a first priority security interest in all of the following (collectively, the “ Pledged Collateral ”):
 
(a)           the Pledged Shares and the certificates representing the Pledged Shares, and all dividends, distributions, cash, instruments, Stock Equivalents and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; and
 
(b)           such portion, as determined by the Collateral Agent as provided in Section 6(d) below, of any additional shares of Stock and Stock Equivalents of a Pledged Entity from time to time acquired by Pledgor in any manner (which shares shall be deemed to be part of the Pledged Shares), and the certificates representing such additional shares, and all dividends, distributions, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Stock.
 
3.            Security for Obligations . This Agreement secures, and the Pledged Collateral is security for, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the Obligations of the Borrower whether existing on the date hereof or hereinafter incurred or created (other than obligations owing to SG under the SG Advisory Fee Note) including, without limitation, all fees, costs and expenses whether in connection with collection actions hereunder or otherwise (collectively, the “ Secured Obligations ”).
 
4.            Delivery of Pledged Collateral . If Pledgor shall become entitled to receive or shall receive any certificate or instrument evidencing the Pledged Collateral, Pledgor shall accept the same as the agent of the Secured Parties, hold the same in trust for the Secured Parties and promptly (and in any event within three (3) Business Days) deliver the same to the Collateral Agent, for itself and the benefit of the Secured Parties, in the exact form received, together with duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Collateral Agent.  If required by law, the Pledgor will duly endorse the certificates or instruments so delivered to the Collateral Agent.
 
5.            Representations and Warranties . Pledgor represents and warrants to the Collateral Agent that:
 
(a)           Pledgor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization;
 
(b)           Pledgor is, and at the time of delivery of the Pledged Collateral to the Collateral Agent will be, the sole holder of record and the sole beneficial owner of such Pledged Collateral pledged by Pledgor free and clear of any Lien thereon or affecting the title thereto, except for any Lien created by this Agreement;
 
(c)           All of the Pledged Shares have been duly authorized, validly issued and are fully paid and non-assessable;
 

 
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(d)           Pledgor has the full right, power and requisite authority to pledge, assign, transfer, deliver, deposit and set over the Pledged Collateral pledged by Pledgor to the Collateral Agent as provided herein;
 
(e)           None of the Pledged Shares has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject;
 
(f)           The pledge, assignment and delivery of the Pledged Collateral pursuant to this Agreement will not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or Governmental Authority, or of the charter or by-laws of Pledgor or of any securities issued by Pledgor or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which Pledgor is a party or which purports to be binding upon Pledgor or upon any of its assets, and will not result in the creation or imposition of any lien, charge or encumbrance on or security interest in any of the assets of Pledgor except as contemplated by this Agreement;
 
(g)           All of the Pledged Shares are owned by Pledgor, and are represented by the certificates listed on Schedule I hereto and each Pledge Amendment attached hereto.  There are no existing options, warrants, calls or commitments of any character whatsoever relating to the Pledged Shares;
 
(h)           No consent, approval, authorization or other order or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required (i) for the pledge by Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by Pledgor, or (ii) for the exercise by the Collateral Agent of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally;
 
(i)           The pledge, assignment and delivery of the Pledged Collateral pursuant to this Agreement will create a valid first priority Lien on and a first priority perfected security interest in favor of the Collateral Agent for the benefit of the Collateral Agent and the Secured Parties in the Pledged Collateral and the proceeds thereof, securing the payment of the Secured Obligations, subject to no other Lien;
 
(j)           This Agreement has been duly authorized, executed and delivered by Pledgor and constitutes a legal, valid and binding obligation of Pledgor enforceable against Pledgor in accordance with its terms; and
 
(k)           The Pledged Shares constitute 100% of the issued and outstanding shares of Stock of each Pledged Entity.
 
The representations and warranties set forth in this Section 5 shall survive the execution and delivery of this Agreement.
 
6.            Covenants . Pledgor covenants and agrees to the following, as long as any Obligation or any Term Loan Commitment remains outstanding:
 

 
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(a)           Pledgor shall preserve and maintain its legal existence; provided that, so long as Pledgor is the surviving entity, Pledgor may merge, consolidate or amalgamate with any other Person;
 
(b)           Pledgor will, at its expense, promptly execute, acknowledge and deliver all such instruments and take all such actions as the Collateral Agent from time to time may reasonably request in order to ensure to the Collateral Agent and the Secured Parties the benefits of the Liens in and to the Pledged Collateral intended to be created by this Agreement, including the filing of any necessary UCC financing statements, which may be filed by the Collateral Agent with or (to the extent permitted by law) without the signature of Pledgor, and will cooperate with the Collateral Agent, at Pledgor’s expense, in obtaining all necessary approvals and making all necessary filings under federal, state, local or foreign law in connection with such Liens or any sale or transfer of the Pledged Collateral;
 
(c)           Pledgor has and will defend the title to the Pledged Collateral and the Liens of the Collateral Agent in the Pledged Collateral against the claim of any Person and will maintain and preserve such Liens;
 
(d)           Pledgor will, upon obtaining ownership of any additional Stock, Stock Equivalents or instruments of a Pledged Entity or Stock, Stock Equivalents or instruments otherwise required to be pledged to the Collateral Agent pursuant to any of the Loan Documents, which Stock or instruments are not already Pledged Collateral, promptly (and in any event within three (3) Business Days) deliver to the Collateral Agent a Pledge Amendment, duly executed by Pledgor, in substantially the form of Schedule II hereto (a “ Pledge Amendment ”) in respect of any such additional Stock or instruments, pursuant to which Pledgor shall pledge to the Collateral Agent all of such additional Stock and instruments. Pledgor hereby authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement and agrees that all Pledged Shares listed on any Pledge Amendment delivered to the Collateral Agent shall for all purposes hereunder be considered Pledged Collateral; and
 
(e)           Pledgor shall take, or refrain from taking, as the case may be, all actions, including, but not limited to the following, that are necessary or advisable to be taken or not to be taken in order to ensure that its existence shall be maintained and respected separate and apart from that of any other Loan Party:
 
(i)           Except as otherwise provided in Section 4 of the Multiparty Agreement, Pledgor shall maintain its own deposit, securities or other account or accounts, separate from those of CDF2 Holdings, LLC and each Group Member (collectively, the “ Holdings Group Members ”), with commercial banking institutions or broker-dealers, Pledgor shall ensure that its funds will not be diverted to any other Person or for other than corporate uses of Pledgor, and such funds will not be commingled with the funds of any other Loan Party;
 
(ii)           To the extent that it shares the same officers or other employees as any Holdings Group Member, Pledgor shall ensure that the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, to the extent practicable, on the basis of such entity’s actual share of such costs and to
 
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the extent such allocation is not practicable, on a basis reasonably related to such entity’s fair share of the salary and benefit costs associated with all such common officers and employees;
(iii)           To the extent that it jointly contracts with any Holdings Group Member to do business with vendors or service providers or to share overhead expenses, Pledgor shall ensure that the costs incurred in so doing shall be allocated fairly among such entities, to the extent practicable, on the basis of such entities’ actual share of such costs and to the extent such allocation is not practicable, on a basis reasonably related to such entities’ fair share of such costs. To the extent that Pledgor contracts or does business with vendors or service providers where the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods or services are provided on the basis of such entities’ actual share of such costs and to the extent such allocation is not practicable, on a basis reasonably related to such entities’ fair share of such costs. All material transactions between or among Pledgor and any of its Affiliates, whether currently existing or hereafter entered into, shall be only on an arm’s-length basis;
 
(iv)           Pledgor shall maintain a principal executive office at a separate address from the address of each Holdings Group Member; provided that reasonably segregated offices in the same building shall constitute separate addresses for purposes of this clause (iv) so long as such office space is leased or subleased to Pledgor under a separate written agreement between Pledgor and such Holdings Group Member on arm’s-length terms. To the extent that Pledgor and any Holdings Group Member have offices in the same location, there shall be a fair and appropriate allocation of overhead costs among them, and each such entity shall bear its fair share of such expenses;
 
(v)           Pledgor shall, with respect to any audited financial statements consolidating the accounts of Pledgor with the accounts of any other Loan Party, disclose in the footnotes the separate identity of the Holdings Group Members and reflect that the assets of the Holdings Group Members are not available to pay, guarantee or otherwise provide for the liabilities of Pledgor;
 
(vi)           Pledgor shall conduct its affairs in its own name and strictly in accordance with its Constituent Documents and observe all necessary, appropriate and customary corporate formalities, including, but not limited to, holding all regular and special officers’ and directors’ meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts;
 
(vii)           Pledgor shall not, nor shall Pledgor permit any of its Subsidiaries to, assume or guarantee any of the liabilities of any Holdings Group Member except as expressly permitted in the Credit Agreement;
 
(viii)           Pledgor shall have stationery and other business forms separate and distinct from that of any other Person;

 
 
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(ix)           Pledgor shall cause its assets to be maintained in a manner that facilitates their identification and segregation from those of any other Person; and

(x)           The board of directors of Pledgor shall have at least one director who is not an officer, director, employee, material shareholder or material supplier of any Holdings Group Member and whose vote is required in order for the Pledgor to file a voluntary petition for bankruptcy or to commence any other event that would constitute an Event of Default under Section 9.1(e) of the Credit Agreement.
 
(f)           To the extent Pledgor receives any dividends or other distributions from the Borrower with respect to federal income tax obligations attributable to its, or its shareholders’, direct or indirect ownership of the Borrower’s Stock, Pledgor shall either use such tax distributions to pay the Pledgor’s federal income tax obligations attributable to its ownership of the Stock of the Borrower or distribute the entire such amount so received to the holders of the Stock of Pledgor for use by such holders to pay their federal income tax obligations attributable to their ownership, indirectly, of the Borrower’s Stock, as applicable.
 
(g)           Pledgor shall comply with all the covenants and obligations applicable to it in the Credit Agreement and other Loan Documents.  The covenants and obligations of the Pledgor referred to in the preceding sentence (including all exhibits, schedules and defined terms referred to therein) are hereby incorporated herein by reference as if set forth in full herein.
 
7.            Negative Covenants . Pledgor covenants and agrees to the following, as long as any Obligation or any Term Loan Commitment remains outstanding:
 
(a)           Without the prior written consent of the Collateral Agent, Pledgor will not sell, assign, transfer, pledge, or otherwise encumber any of its rights in or to the Pledged Collateral, or any unpaid dividends, interest or other distributions or payments with respect to the Pledged Collateral or grant a Lien in the Pledged Collateral, unless otherwise expressly permitted by the Credit Agreement;
 
(b)           Pledgor shall not incur or otherwise suffer to exist or become effective or remain liable on or be responsible for any Contractual Obligation limiting the ability of (i) any Group Member to make Restricted Payments to, or Investments in, or repay Indebtedness or otherwise Sell property to, any Loan Party or (ii) Pledgor to incur or suffer to exist any Lien upon any Pledged Collateral (including any “ equal and ratable ” clause and any similar Contractual Obligation requiring, when a Lien is granted on any property, another Lien to be granted on such property or any other property), except, for each of clauses (i) and (ii) above, pursuant to the Loan Documents;
 
(c)           Pledgor shall not waive or otherwise modify any term of (i) any document governing any Pledged Collateral in a manner adverse to Pledgor or any Secured Party or (ii) any Intercompany Agreement entered into with any other Loan Party, except, for each of clauses (i) or (ii) above, with the consent of the Collateral Agent; and
 
8.            Pledgor’s Rights . As long as no Default or Event of Default shall have occurred and be continuing and until written notice shall be given to Pledgor in accordance with Section 9(b) hereof:
 
 
 
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(a)           Pledgor shall have the right, from time to time, to vote and give consents with respect to the Pledged Collateral, or any part thereof for all purposes not inconsistent with the provisions of this Agreement, the Credit Agreement or any other Loan Document; provided, however, that no vote shall be cast, no consent shall be given or action taken and no right shall be exercised or other action taken, which would have the effect of impairing the position or interest of the Collateral Agent in respect of the Pledged Collateral or which would authorize, effect or consent to (unless and to the extent a Pledged Entity is expressly permitted to do so by the Credit Agreement):
 
(i)           the dissolution or liquidation, in whole or in part, of a Pledged Entity;
 
(ii)           the consolidation or merger of a Pledged Entity with any other Person;
 
(iii)           the sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the Collateral Agent;
 
(iv)           any change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance of any additional shares of its Stock; or
 
(v)           the alteration of the voting rights with respect to the Stock of a Pledged Entity; and
 
(b)           i)           Pledgor shall be entitled, from time to time, to collect and receive for its own account and use all cash dividends, distributions and interest paid in respect of the Pledged Shares to the extent not in violation of the Credit Agreement other than any and all: (A) dividends and interest paid or payable other than in cash in respect of any Pledged Collateral, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and other distributions paid or payable in cash in respect of any Pledged Shares in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of a Pledged Entity; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, any Pledged Collateral; provided, however, that until actually paid all rights to such distributions shall remain subject to the Lien created by this Agreement; and
 
(ii)           all dividends, interest and all other distributions in respect of any of the Pledged Shares (other than such cash dividends, distributions and interest as are permitted to be paid to Pledgor in accordance with clause (i) above), whenever paid or made, shall be delivered to the Collateral Agent to hold as Pledged Collateral and shall, if received by Pledgor, be received in trust for the benefit of the Collateral Agent, be segregated from the other property or funds of Pledgor, and be forthwith delivered to the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).
 
9.            Defaults and Remedies: Proxy .
 
(a)           Upon the occurrence and during the continuance of an Event of Default, to the extent permitted by law, the Collateral Agent may exercise in respect of the Pledged Collateral,

 
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in addition to other rights and remedies provided for in this Agreement or otherwise available to it, all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Pledged Collateral).
 
(b)           Upon the occurrence of an Event of Default and during the continuation of such Event of Default, and concurrently with written notice to Pledgor, the Collateral Agent (personally or through an agent) is hereby authorized and empowered to transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest and other distributions made thereon, to sell in one or more sales after ten (10) days’ notice of the time and place of any public sale or of the time at which a private sale is to take place (which notice Pledgor agrees is commercially reasonable) the whole or any part of the Pledged Collateral and to otherwise act with respect to the Pledged Collateral as though the Collateral Agent was the outright owner thereof. Any sale shall be made at a public or private sale at the Collateral Agent’s place of business, or at any place to be named in the notice of sale, either for cash or upon credit or for future delivery at such price as the Collateral Agent may deem fair, and the Collateral Agent may be the purchaser of the whole or any part of the Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of Pledgor or any right of redemption. Demands of performance, except as otherwise herein specifically provided for, notices of sale, advertisements and the presence of property at sale are hereby waived and any sale hereunder may be conducted by an auctioneer or any officer or agent of the Collateral Agent. PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE COLLATERAL AGENT AS THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO. THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE SATISFACTION IN FULL OF THE OBLIGATIONS. IN ADDITION TO THE RIGHT TO VOTE THE PLEDGED SHARES, THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY OFFICER OR THE COLLATERAL AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT. NOTWITHSTANDING THE FOREGOING, THE COLLATERAL AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.
 
 
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(c)           If, at the original time or times appointed for the sale of the whole or any part of the Pledged Collateral, the highest bid, if there be but one sale, shall be inadequate to discharge in full all the Secured Obligations, or if the Pledged Collateral be offered for sale in lots, if at any of such sales, the highest bid for the lot offered for sale would indicate to the Collateral Agent, in its discretion, that the proceeds of the sales of the whole of the Pledged Collateral would be unlikely to be sufficient to discharge all the Secured Obligations, the Collateral Agent may, on one or more occasions and in its discretion, postpone any of said sales by public announcement at the time of sale or the time of previous postponement of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived; provided, however, that any sale or sales made after such postponement shall be after ten (10) days’ notice to Pledgor.
 
(d)           If, at any time when the Collateral Agent in its sole discretion determines, following the occurrence and during the continuance of an Event of Default, that, in connection with any actual or contemplated exercise of its rights (when permitted under this Section 9 ) to sell the whole or any part of the Pledged Shares hereunder, it is necessary or advisable to effect a public registration of all or part of the Pledged Collateral pursuant to the Securities Act of 1933, as amended (or any similar statute then in effect) (the “ Act ”), Pledgor shall, in an expeditious manner, cause the Pledged Entities to:
 
(i)           Prepare and file with the Securities and Exchange Commission (the “ Commission ”) a registration statement with respect to the Pledged Shares and in good faith use commercially reasonable efforts to cause such registration statement to become and remain effective for such period as prospectuses are required by law to be furnished or available;
 
(ii)           Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith which, in the opinion of the Collateral Agent, are necessary or advisable to keep such registration statement effective and to comply with the provisions of the Act with respect to the sale or other disposition of the Pledged Shares covered by such registration statement;
 
(iii)           Furnish to the Collateral Agent such numbers of copies of a prospectus and a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as the Collateral Agent may request in order to facilitate the public sale or other disposition of the Pledged Shares by the Collateral Agent;
 
(iv)           Use commercially reasonable efforts to register or qualify the Pledged Shares covered by such registration statement under such other securities or blue sky laws of such jurisdictions within the United States and Puerto Rico as the Collateral Agent shall request, and do such other reasonable acts and things as may be required of it to enable the Collateral Agent to consummate the public sale or other disposition in such jurisdictions of the Pledged Shares by the Collateral Agent;
 
(v)           Furnish, at the request of the Collateral Agent, on the date that shares of the Pledged Collateral are delivered to the underwriters for sale pursuant to such registration or, if the security is not being sold through underwriters, on the date that the registration statement with respect to such Pledged Shares becomes effective, (A) an opinion, dated such date, of the

 
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independent counsel representing such registrant for the purposes of such registration, addressed to the underwriters, if any, and in the event the Pledged Shares are not being sold through underwriters, then to the Collateral Agent, in customary form and covering matters of the type customarily covered in such legal opinions; and (B) a comfort letter, dated such date, from the independent certified public accountants of such registrant, addressed to the underwriters, if any, and in the event the Pledged Shares are not being sold through underwriters, then to the Collateral Agent, in a customary form and covering matters of the type customarily covered by such comfort letters and as the underwriters or the Collateral Agent shall reasonably request. The opinion of counsel referred to above shall additionally cover such other legal matters with respect to the registration in respect of which such opinion is being given as the Collateral Agent may reasonably request. The letter referred to above from the independent certified public accountants shall additionally cover such other financial matters (including information as to the period ending not more than five (5) Business Days prior to the date of such letter) with respect to the registration in respect of which such letter is being given as the Collateral Agent may reasonably request; and
 
(vi)           Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable but not later than 18 months after the effective date of the registration statement, an earnings statement which satisfies the provisions of Section 11(a) of the Act.
 
(e)           All expenses incurred in complying with Section 9(d) hereof, including, without limitation, all registration and filing fees (including all expenses incident to filing with the Financial Industry Regulatory Authority), printing expenses, fees and disbursements of counsel for the registrant, the fees and expenses of counsel for the Collateral Agent, expenses of the independent certified public accountants (including any special audits incident to or required by any such registration) and expenses of complying with the securities or blue sky laws or any jurisdictions, shall be paid by Pledgor.
 
(f)           If, at any time when the Collateral Agent shall determine to exercise its right to sell the whole or any part of the Pledged Collateral hereunder, such Pledged Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Act, the Collateral Agent may, in its discretion (subject only to applicable requirements of law), sell such Pledged Collateral or part thereof by private sale in such manner and under such circumstances as the Collateral Agent may deem necessary or advisable, but subject to the other requirements of this Section 9 , and shall not be required to effect such registration or to cause the same to be effected. Without limiting the generality of the foregoing, in any such event, the Collateral Agent in its discretion (x) may, in accordance with applicable securities laws, proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Pledged Collateral or part thereof could be or shall have been filed under said Act (or similar statute), (y) may approach and negotiate with a single possible purchaser to effect such sale, and (z) may restrict such sale to a purchaser who is an accredited investor under the Act and who will represent and agree that such purchaser is purchasing for its own account, for investment and not with a view to the distribution or sale of such Pledged Collateral or any part thereof.  In addition to a private sale as provided above in this Section 9 , if any of the Pledged Collateral shall not be freely distributable to the public without registration under the Act (or

 
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similar statute) at the time of any proposed sale pursuant to this Section 9 , then the Collateral Agent shall not be required to effect such registration or cause the same to be effected but, in its discretion (subject only to applicable requirements of law), may require that any sale hereunder (including a sale at auction) be conducted subject to restrictions:
 
(i)           as to the financial sophistication and ability of any Person permitted to bid or purchase at any such sale;
 
(ii)           as to the content of legends to be placed upon any certificates representing the Pledged Collateral sold in such sale, including restrictions on future transfer thereof;
 
(iii)           as to the representations required to be made by each Person bidding or purchasing at such sale relating to that Person’s access to financial information about Pledgor and such Person’s intentions as to the holding of the Pledged Collateral so sold for investment for its own account and not with a view to the distribution thereof; and
 
(iv)           as to such other matters as the Collateral Agent may, in its discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with the Bankruptcy Code and other laws affecting the enforcement of creditors’ rights and the Act and all applicable state securities laws.
 
(g)           Pledgor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (f) above. Pledgor also acknowledges that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit the Pledged Entity to register such securities for public sale under the Act, or under applicable state securities laws, even if Pledgor and the Pledged Entity would agree to do so.
 
(h)           Pledgor agrees to the maximum extent permitted by applicable law that following the occurrence and during the continuance of an Event of Default it will not at any time plead, claim or take the benefit of any appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Agreement, or the absolute sale of the whole or any part of the Pledged Collateral or the possession thereof by any purchaser at any sale hereunder, and Pledgor waives the benefit of all such laws to the extent it lawfully may do so. Pledgor agrees that it will not interfere with any right, power and remedy of the Collateral Agent provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Collateral Agent of any one or more of such rights, powers or remedies. No failure or delay on the part of the Collateral Agent to exercise any such right, power or remedy and no notice or demand which may be given to or made upon Pledgor by the Collateral Agent with respect to any such remedies shall operate as a waiver thereof, or limit or impair the Collateral Agent’s right to take any action or to exercise any power or remedy hereunder, without notice or demand, or prejudice its rights as against Pledgor in any respect.
 

 
-11-

 

(i)           Pledgor further agrees that a breach of any of the covenants contained in this Section 9 will cause irreparable injury to the Collateral Agent, that the Collateral Agent shall have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 9 shall be specifically enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that the Secured Obligations are not then due and payable in accordance with the agreements and instruments governing and evidencing such obligations.
 
(j)           Each right, power and remedy herein specifically granted to the Collateral Agent or otherwise available to it shall be cumulative, and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity, or otherwise, and each such right, power and remedy, whether specifically granted herein or otherwise existing, may be exercised at any time and from time-to-time as often and in such order as may be deemed expedient by the Collateral Agent in its sole discretion.
 
10.            Waiver . No delay on the Collateral Agent’s part in exercising any power of sale, Lien, option or other right hereunder, and no notice or demand which may be given to or made upon Pledgor by the Collateral Agent with respect to any power of sale, Lien, option or other right hereunder, shall constitute a waiver thereof or limit or impair the Collateral Agent’s right to take any action or to exercise any power of sale, Lien, option, or any other right hereunder, without notice or demand, or prejudice the Collateral Agent’s rights as against Pledgor in any respect.
 
11.            Assignment . The Collateral Agent may assign, indorse or transfer any instrument evidencing all or any part of the Secured Obligations as provided in, and in accordance with, the Credit Agreement, and the holder of such instrument shall be entitled to the benefits of this Agreement.
 
12.            Termination . At the time provided in clause (b)(iii) of Section 10.11 of the Credit Agreement, the Pledged Collateral shall be released from the Lien created hereby and the Collateral Agent shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the time subject to this Agreement and all instruments of assignment or transfer executed in connection therewith or as Pledgor may reasonably request, free and clear of the Liens hereof and, except as otherwise provided herein, all of Pledgor’ s obligations hereunder shall at such time terminate.
 
13.            Lien Absolute . All rights of the Collateral Agent hereunder, and all obligations of Pledgor hereunder, shall be absolute and unconditional irrespective of:
 
(a)           any lack of validity or enforceability of the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Secured Obligations;
 
(b)           any change in the time, manner or place of payment of, or in any other term of, all or any part of the Secured 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 governing or evidencing any Secured Obligations;
 

 
-12-

 

(c)           any exchange, release or non-perfection of any other Collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured Obligations;
 
(d)           the insolvency of any Loan Party; or
 
(e)           any other circumstance which might otherwise constitute a defense available to, or a discharge of, Pledgor.
 
14.            Release . Pledgor consents and agrees that the Collateral Agent may at any time, or from time to time, in its discretion:
 
(a)           renew, extend or change the time of payment, and/or the manner, place or terms of payment of all or any part of the Secured Obligations; and
 
(b)           exchange, release and/or surrender all or any of the Collateral (including the Pledged Collateral), or any part thereof, by whomsoever deposited, which is now or may hereafter be held by the Collateral Agent in connection with all or any of the Secured Obligations; all in such manner and upon such terms as the Collateral Agent may deem proper, and without notice to or further assent from Pledgor, it being hereby agreed that Pledgor shall be and remain bound upon this Agreement, irrespective of the value or condition of any of the Collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender, release, renewal or extension, and notwithstanding also that the Secured Obligations may, at any time, exceed the aggregate principal amount thereof set forth in the Credit Agreement, or any other agreement governing any Secured Obligations. Pledgor hereby waives notice of acceptance of this Agreement, and also presentment, demand, protest and notice of dishonor of any and all of the Secured Obligations, and promptness in commencing suit against any party hereto or liable hereon, and in giving any notice to or of making any claim or demand hereunder upon Pledgor. No act or omission of any kind on the Collateral Agent’s part shall in any event affect or impair this Agreement.
 
15.            Reinstatement . This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against Pledgor or any Pledged Entity for liquidation or reorganization, should Pledgor or any Pledged Entity become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Pledgor’s or a Pledged Entity’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
 

 
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16.            Miscellaneous .
 
(a)           The Collateral Agent may execute any of its duties hereunder by or through agents or employees and shall be entitled to advice of counsel concerning all matters pertaining to its duties hereunder.
 
(b)           The Collateral Agent shall be reimbursed for actual out-of-pocket expenses, including, without limitation, reasonable counsel fees, incurred by the Collateral Agent in connection with the administration and enforcement of this Agreement to be payable in accordance with Sections 4.4 and 4.5 of the Multiparty Agreement and Section 11.3 of the Credit Agreement.
 
(c)           Neither the Collateral Agent, nor any of its respective officers, directors, employees, agents or counsel shall be liable for any action lawfully taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
 
(d)           THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR AND ITS SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF OF PLEDGOR), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, THE COLLATERAL AGENT AND ITS SUCCESSORS AND ASSIGNS, AND SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, AND NONE OF THE TERMS OR PROVISIONS OF THIS AGREEMENT MAY BE WAIVED, ALTERED, MODIFIED OR AMENDED EXCEPT IN WRITING DULY SIGNED FOR AND ON BEHALF OF THE COLLATERAL AGENT AND PLEDGOR.
 
17.            Severability . Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of any Loan Document or any part of such provision in any other jurisdiction.
 
18.            Notices . Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon either of the parties by the other party, or whenever either of the parties desires to give or serve upon any other a communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and given in the manner specified in Section 11.11 of the Credit Agreement (provided that notices, demands, requests, consents, approvals, declarations or other communications to Pledgor may be given in the manner in which they may be given to the Borrower): (a) if to the Collateral Agent, to the address specified in Section 11.11 of the Credit Agreement and (b) if to Pledgor, to it, c/o of the Borrower at the Borrower’s address, facsimile number, electronic mail address or telephone number specified in such Section 11.11 of the Credit Agreement. All such notices, demands, requests and other communications made in connection with this Agreement shall be effective and be deemed to have been received on the date provided in Section 11.11(b) of the Credit Agreement as though the reference to “this Agreement” therein referred to this Agreement.
 

 
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19.            Section Titles . The Section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.
 
20.            Counterparts . This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Agreement by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.
 
21.            Benefit of Secured Parties . All security interests granted or contemplated hereby shall be for the benefit of the Collateral Agent and the Secured Parties, and all proceeds or payments realized from the Pledged Collateral in accordance herewith shall be applied to the Obligations in accordance with the terms of the Credit Agreement.
 
22.            Authorization . Pledgor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including whether such Pledgor is an organization, the type of organization and any organization identification number issued to such Pledgor. Pledgor agrees to furnish any such information to the Collateral Agent promptly upon request. Pledgor also ratifies its authorization for the Collateral Agent to have filed in any Uniform Commercial Code jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.
 
23.             Entire Agreement . THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT OF THE PARTIES AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER THEREOF AND ANY PRIOR LETTER OF INTEREST, COMMITMENT LETTER, FEE LETTER, CONFIDENTIALITY AND SIMILAR AGREEMENTS INVOLVING ANY LOAN PARTY AND ANY OF THE AGENTS OR ANY LENDER OR ANY OF THEIR RESPECTIVE AFFILIATES RELATING TO A FINANCING OF SUBSTANTIALLY SIMILAR FORM, PURPOSE OR EFFECT.  IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND THE CREDIT AGREEMENT, THE TERMS OF THE CREDIT AGREEMENT SHALL GOVERN (UNLESS SUCH TERMS OF THIS AGREEMENT ARE NECESSARY TO COMPLY WITH APPLICABLE REQUIREMENTS OF LAW, IN WHICH CASE SUCH TERMS SHALL GOVERN TO THE EXTENT NECESSARY TO COMPLY THEREWITH).
 
[SIGNATURE PAGE FOLLOWS]
 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above.
 

    ACCESS DIGITAL CINEMA PHASE 2, CORP.
     
     
   
By: 
 /s/ Gary S. Loffredo
   
Name:
 Gary S. Loffredo
   
Title:
 Secretary
       
 

 
 
 
 
 

 
Signature Page to Pledge Agreement (Parent)
 
 

 
 

   
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH, as Collateral Agent
     
     
   
By: 
 /s/ Richard O. Knowlton
   
Name:
 Richard O. Knowlton
   
Title:
 Managing Director
       
 
 

 
 




Signature Page to Pledge Agreement (Parent)
 
 

 

SCHEDULE I
TO
PLEDGE AGREEMENT
 
PLEDGED SHARES

100% of the membership interests in CDF2 Holdings, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Pledgor.
 
 
 

Schedule I to Pledge Agreement (Parent)
 
 

 

SCHEDULE II
TO
PLEDGE AGREEMENT
 
FORM OF PLEDGE AMENDMENT

This Pledge Amendment, dated as of ________, 20___ is delivered pursuant to Section 6(d) of the Pledge Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Pledge Agreement. The undersigned hereby certifies that the representations and warranties in Section 5 of the Pledge Agreement are and continue to be true and correct as to the instruments and shares pledged pursuant to this Pledge Amendment. The undersigned further agrees that this Pledge Amendment may be attached to that certain Pledge Agreement, dated as of October 18, 2011, between the undersigned, as Pledgor, and Société Générale, as collateral agent (as amended, supplemented or otherwise modified, the “ Pledge Agreement ”), and that the Pledged Shares listed on this Pledge Amendment shall (a) be and become (i) “Pledged Shares” as defined in the Pledge Agreement and (ii) a part of the “Pledged Collateral” referred to in the Pledge Agreement and (b) shall be security for the prompt payment in full when due, whether at stated maturity, by acceleration or otherwise, and performance of all Secured Obligations.
 
    ACCESS DIGITAL CINEMA PHASE 2, CORP.
     
     
   
By: 
 
   
Name:
 
   
Title:
 
       
                                                                   

Name and Address of Pledgor
Pledged Entity
Class of Stock
Certificate Number(s)
Number of Shares
         
         
         
 
 

 

Schedule II to Pledge Agreement (Parent)
 
 
 
 

EXHIBIT 4.6
 
EXECUTION VERSION
PLEDGE AGREEMENT
 
This PLEDGE AGREEMENT, dated as of October 18, 2011 (together with all amendments, if any, from time to time hereto, this “ Agreement ”), between CDF2 HOLDINGS, LLC, a Delaware limited liability company (the “ Pledgor ”) and SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH, as collateral agent (in such capacity, together with its successors and permitted assigns, the “ Collateral Agent ”) for the Secured Parties (as defined in the Credit Agreement referred to below).
 
INTRODUCTION
 
1.           Pursuant to that certain Credit Agreement dated as of October 18, 2011, by and among Cinedigm Digital Funding 2, LLC, a Delaware limited liability company (the “ Borrower ”), the Lenders party thereto, Société Générale, New York Branch, as administrative agent for the Lenders, and the Collateral Agent (including all annexes, exhibits and schedules thereto, and as from time to time amended, restated, supplemented or otherwise modified, the “ Credit Agreement ”), the Lenders have agreed to make Loans to the Borrower;
 
2.           Pledgor is the record and beneficial owner of the shares of Stock listed on Schedule I hereto;
 
3.           Pledgor benefits from the credit facilities made available to the Borrower under the Credit Agreement;
 
4.           In order to induce the Lenders to make the Loans as provided for in the Credit Agreement, Pledgor has agreed to pledge the Pledged Collateral to the Collateral Agent in accordance herewith;
 
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and to induce the Lenders to make Loans under the Credit Agreement, it is agreed as follows:
 
1.            Definitions . Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined, and the following shall have (unless otherwise provided elsewhere in this Agreement) the following respective meanings (such meanings being equally applicable to both the singular and plural form of the terms defined):
 
Bankruptcy Code ” means title 11, United States Code, as amended from time to time, and any successor statute thereto.
 
Pledged Collateral ” has the meaning assigned to such term in Section 2 hereof.
 
Pledged Entity ” means an issuer of Pledged Shares.
 
Pledged Shares ” means those shares listed on Schedule I hereto and on each Pledge Amendment attached hereto.
 

 
 
 

 

Secured Obligations ” has the meaning assigned to such term in Section 3 hereof.
 
2.            Pledge . Pledgor hereby pledges to the Collateral Agent, and grants to the Collateral Agent for itself and the benefit of the Secured Parties, a first priority security interest in all of the following (collectively, the “ Pledged Collateral ”):
 
(a)           the Pledged Shares and the certificates representing the Pledged Shares, and all dividends, distributions, cash, instruments, Stock Equivalents and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; and
 
(b)           such portion, as determined by the Collateral Agent as provided in Section 6(d) below, of any additional shares of Stock and Stock Equivalents of a Pledged Entity from time to time acquired by Pledgor in any manner (which shares shall be deemed to be part of the Pledged Shares), and the certificates representing such additional shares, and all dividends, distributions, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Stock.
 
3.            Security for Obligations . This Agreement secures, and the Pledged Collateral is security for, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the Obligations of the Borrower whether existing on the date hereof or hereinafter incurred or created (other than obligations owing to SG under the SG Advisory Fee Note) including, without limitation, all fees, costs and expenses whether in connection with collection actions hereunder or otherwise (collectively, the “ Secured Obligations ”).
 
4.            Delivery of Pledged Collateral . If Pledgor shall become entitled to receive or shall receive any certificate or instrument evidencing the Pledged Collateral, Pledgor shall accept the same as the agent of the Secured Parties, hold the same in trust for the Secured Parties and promptly (and in any event within three (3) Business Days) deliver the same to the Collateral Agent, for itself and the benefit of the Secured Parties, in the exact form received, together with duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Collateral Agent.  If required by law, the Pledgor will duly endorse the certificates or instruments so delivered to the Collateral Agent.
 
5.            Representations and Warranties . Pledgor represents and warrants to the Collateral Agent that:
 
(a)           Pledgor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization;
 
(b)           Pledgor is, and at the time of delivery of the Pledged Collateral to the Collateral Agent will be, the sole holder of record and the sole beneficial owner of such Pledged Collateral pledged by Pledgor free and clear of any Lien thereon or affecting the title thereto, except for any Lien created by this Agreement;
 
(c)           All of the Pledged Shares have been duly authorized, validly issued and are fully paid and non-assessable;
 

 
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(d)           Pledgor has the full right, power and requisite authority to pledge, assign, transfer, deliver, deposit and set over the Pledged Collateral pledged by Pledgor to the Collateral Agent as provided herein;
 
(e)           None of the Pledged Shares has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject;
 
(f)           The pledge, assignment and delivery of the Pledged Collateral pursuant to this Agreement will not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or Governmental Authority, or of the charter or by-laws of Pledgor or of any securities issued by Pledgor or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which Pledgor is a party or which purports to be binding upon Pledgor or upon any of its assets, and will not result in the creation or imposition of any lien, charge or encumbrance on or security interest in any of the assets of Pledgor except as contemplated by this Agreement;
 
(g)           All of the Pledged Shares are owned by Pledgor, and are represented by the certificates listed on Schedule I hereto and each Pledge Amendment attached hereto.  There are no existing options, warrants, calls or commitments of any character whatsoever relating to the Pledged Shares;
 
(h)           No consent, approval, authorization or other order or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required (i) for the pledge by Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by Pledgor, or (ii) for the exercise by the Collateral Agent of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally;
 
(i)           The pledge, assignment and delivery of the Pledged Collateral pursuant to this Agreement will create a valid first priority Lien on and a first priority perfected security interest in favor of the Collateral Agent for the benefit of the Collateral Agent and the Secured Parties in the Pledged Collateral and the proceeds thereof, securing the payment of the Secured Obligations, subject to no other Lien;
 
(j)           This Agreement has been duly authorized, executed and delivered by Pledgor and constitutes a legal, valid and binding obligation of Pledgor enforceable against Pledgor in accordance with its terms;
 
(k)           The Pledged Shares constitute 100% of the issued and outstanding shares of Stock of each Pledged Entity; and
 
(l)           All assets and property of Pledgor, including rights under Contractual Obligations and Permits but excluding Pledgor’s rights under the CHG Lease Facility Documents, have been transferred to the Borrower pursuant to the Sale and Contribution Agreement, except for the Pledged Collateral.
 

 
-3-

 

The representations and warranties set forth in this Section 5 shall survive the execution and delivery of this Agreement.
 
6.            Covenants . Pledgor covenants and agrees to the following, as long as any Obligation or any Term Loan Commitment remains outstanding:
 
(a)           Pledgor shall preserve and maintain its legal existence; provided that, so long as Pledgor is the surviving entity, Pledgor may merge, consolidate or amalgamate with any other Person;
 
(b)           Pledgor will, at its expense, promptly execute, acknowledge and deliver all such instruments and take all such actions as the Collateral Agent from time to time may reasonably request in order to ensure to the Collateral Agent and the Secured Parties the benefits of the Liens in and to the Pledged Collateral intended to be created by this Agreement, including the filing of any necessary UCC financing statements, which may be filed by the Collateral Agent with or (to the extent permitted by law) without the signature of Pledgor, and will cooperate with the Collateral Agent, at Pledgor’s expense, in obtaining all necessary approvals and making all necessary filings under federal, state, local or foreign law in connection with such Liens or any sale or transfer of the Pledged Collateral;
 
(c)           Pledgor has and will defend the title to the Pledged Collateral and the Liens of the Collateral Agent in the Pledged Collateral against the claim of any Person and will maintain and preserve such Liens;
 
(d)           Pledgor will, upon obtaining ownership of any additional Stock, Stock Equivalents or instruments of a Pledged Entity or Stock, Stock Equivalents or instruments otherwise required to be pledged to the Collateral Agent pursuant to any of the Loan Documents, which Stock or instruments are not already Pledged Collateral, promptly (and in any event within three (3) Business Days) deliver to the Collateral Agent a Pledge Amendment, duly executed by Pledgor, in substantially the form of Schedule II hereto (a “ Pledge Amendment ”) in respect of any such additional Stock or instruments, pursuant to which Pledgor shall pledge to the Collateral Agent all of such additional Stock and instruments. Pledgor hereby authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement and agrees that all Pledged Shares listed on any Pledge Amendment delivered to the Collateral Agent shall for all purposes hereunder be considered Pledged Collateral; and
 
(e)           Pledgor shall take, or refrain from taking, as the case may be, all actions, including, but not limited to the following, that are necessary or advisable to be taken or not to be taken in order to ensure that its existence shall be maintained and respected separate and apart from that of any other Person:
 
(i)           Except as otherwise provided in Section 4 of the Multiparty Agreement, Pledgor shall maintain its own deposit, securities or other account or accounts, separate from those of any Affiliate, with commercial banking institutions or broker-dealers, Pledgor shall ensure that its funds will not be diverted to any other Person or for other than corporate uses of Pledgor, and such funds will not be commingled with the funds of any other Person;
 

 
-4-

 

(ii)           To the extent that it shares the same officers or other employees as any of its Affiliates, Pledgor shall ensure that the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, to the extent practicable, on the basis of such entity’s actual share of such costs and to the extent such allocation is not practicable, on a basis reasonably related to such entity’s fair share of the salary and benefit costs associated with all such common officers and employees;
 
(iii)           To the extent that it jointly contracts with any of its Affiliates to do business with vendors or service providers or to share overhead expenses, Pledgor shall ensure that the costs incurred in so doing shall be allocated fairly among such entities, to the extent practicable, on the basis of such entities’ actual share of such costs and to the extent such allocation is not practicable, on a basis reasonably related to such entities’ fair share of such costs. To the extent that Pledgor contracts or does business with vendors or service providers where the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods or services are provided on the basis of such entities’ actual share of such costs and to the extent such allocation is not practicable, on a basis reasonably related to such entities’ fair share of such costs. All material transactions between or among Pledgor and any of its Affiliates, whether currently existing or hereafter entered into, shall be only on an arm’s-length basis;
 
(iv)           Pledgor shall maintain a principal executive office at a separate address from the address of each of its Affiliates; provided that reasonably segregated offices in the same building shall constitute separate addresses for purposes of this clause (iv) so long as such office space is leased or subleased to Pledgor under a separate written agreement between Pledgor and such Affiliate on arm’s-length terms. To the extent that Pledgor and any of its Affiliates have offices in the same location, there shall be a fair and appropriate allocation of overhead costs among them, and each such entity shall bear its fair share of such expenses;
 
(v)           Pledgor shall maintain and issue financial statements separate from those of any Affiliate (other than Consolidated and consolidating financial statements with Group Members to the extent including footnote disclosures describing the actual separateness between the Group Members and Pledgor in a manner satisfactory to the Administrative Agent) and  prepared not less frequently than annually and in accordance with GAAP;
 
(vi)           Pledgor shall conduct its affairs in its own name and strictly in accordance with its Constituent Documents and observe all necessary, appropriate and customary corporate formalities, including, but not limited to, holding all regular and special officers’ and directors’ meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts;
 
(vii)           Pledgor shall not, nor shall Pledgor permit any of its Subsidiaries to, assume or guarantee any of the liabilities of any Affiliate except as expressly permitted in the Credit Agreement;
 

 
-5-

 

(viii)           Pledgor shall have stationery and other business forms separate and distinct from that of any other Person;
 
(ix)           Pledgor shall cause its assets to be maintained in a manner that facilitates their identification and segregation from those of any other Person; and
 
(x)           The board of directors of Pledgor shall have at least one director who is not an officer, director, employee, material shareholder or material supplier of any Affiliate of the Borrower (other than any Group Member) and whose vote is required in order for the Pledgor to file a voluntary petition for bankruptcy or to commence any other event that would constitute an Event of Default under Section 9.1(e) of the Credit Agreement.
 
(f)           To the extent Pledgor receives any dividends or other distributions from the Borrower with respect to federal income tax obligations attributable to its, or its shareholders’, direct or indirect ownership of the Borrower’s Stock, Pledgor shall either use such tax distributions to pay the Pledgor’s federal income tax obligations attributable to its ownership of the Stock of the Borrower or distribute the entire such amount so received to the holders of the Stock of Pledgor for use by such holders to pay their federal income tax obligations attributable to their ownership, indirectly, of the Borrower’s Stock, as applicable.
 
(g)           Pledgor shall comply with all the covenants and obligations applicable to it in the Credit Agreement and other Loan Documents.  The covenants and obligations of the Pledgor referred to in the preceding sentence (including all exhibits, schedules and defined terms referred to therein) are hereby incorporated herein by reference as if set forth in full herein.
 
7.            Negative Covenants . Pledgor covenants and agrees to the following, as long as any Obligation or any Term Loan Commitment remains outstanding:
 
(a)           Without the prior written consent of the Collateral Agent, Pledgor will not sell, assign, transfer, pledge, or otherwise encumber any of its rights in or to the Pledged Collateral, or any unpaid dividends, interest or other distributions or payments with respect to the Pledged Collateral or grant a Lien in the Pledged Collateral, unless otherwise expressly permitted by the Credit Agreement;
 
(b)           Pledgor shall not incur or otherwise suffer to exist or become effective or remain liable on or be responsible for any Contractual Obligation limiting the ability of (i) any Group Member to make Restricted Payments to, or Investments in, or repay Indebtedness or otherwise Sell property to, any Loan Party or (ii) Pledgor to incur or suffer to exist any Lien upon any Pledged Collateral (including any “ equal and ratable ” clause and any similar Contractual Obligation requiring, when a Lien is granted on any property, another Lien to be granted on such property or any other property), except, for each of clauses (i) and (ii) above, pursuant to the Loan Documents;
 
(c)           Pledgor shall not waive or otherwise modify any term of (i) any document governing any Pledged Collateral in a manner adverse to Pledgor or any Secured Party or (ii) any Intercompany Agreement entered into with any other Loan Party, except, for each of clauses (i) or (ii) above, with the consent of the Collateral Agent; and
 

 
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(d)           Pledgor shall not enter into or engage in any business or activity other than (i) the ownership of the Pledged Collateral, (ii) maintaining its limited liability company existence, (iii) participating in tax, accounting and other administrative activities as the parent of the Borrower, (iv) the execution and delivery of the Loan Documents to which it is a party and the performance of its obligations thereunder, and (v) activities incidental to the activities described in clauses (i) through (iv) of this Section (which shall include the execution and delivery of the Deployment Agreements, the Exhibitor Agreements, the Management Services Agreement, the Supply Agreement and the CHG Lease Facility Documents).
 
8.            Pledgor’s Rights . As long as no Default or Event of Default shall have occurred and be continuing and until written notice shall be given to Pledgor in accordance with Section 9(b) hereof:
 
(a)           Pledgor shall have the right, from time to time, to vote and give consents with respect to the Pledged Collateral, or any part thereof for all purposes not inconsistent with the provisions of this Agreement, the Credit Agreement or any other Loan Document; provided, however, that no vote shall be cast, no consent shall be given or action taken and no right shall be exercised or other action taken, which would have the effect of impairing the position or interest of the Collateral Agent in respect of the Pledged Collateral or which would authorize, effect or consent to (unless and to the extent a Pledged Entity is expressly permitted to do so by the Credit Agreement):
 
(i)           the dissolution or liquidation, in whole or in part, of a Pledged Entity;
 
(ii)           the consolidation or merger of a Pledged Entity with any other Person;
 
(iii)           the sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the Collateral Agent;
 
(iv)           any change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance of any additional shares of its Stock; or
 
(v)           the alteration of the voting rights with respect to the Stock of a Pledged Entity; and
 
(b)           i)           Pledgor shall be entitled, from time to time, to collect and receive for its own account and use all cash dividends, distributions and interest paid in respect of the Pledged Shares to the extent not in violation of the Credit Agreement other than any and all: (A) dividends and interest paid or payable other than in cash in respect of any Pledged Collateral, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and other distributions paid or payable in cash in respect of any Pledged Shares in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of a Pledged Entity; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, any Pledged Collateral; provided, however, that until actually paid all rights to such distributions shall remain subject to the Lien created by this Agreement; and
 

 
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(ii)           all dividends, interest and all other distributions in respect of any of the Pledged Shares (other than such cash dividends, distributions and interest as are permitted to be paid to Pledgor in accordance with clause (i) above), whenever paid or made, shall be delivered to the Collateral Agent to hold as Pledged Collateral and shall, if received by Pledgor, be received in trust for the benefit of the Collateral Agent, be segregated from the other property or funds of Pledgor, and be forthwith delivered to the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).
 
9.            Defaults and Remedies: Proxy .
 
(a)           Upon the occurrence and during the continuance of an Event of Default, to the extent permitted by law, the Collateral Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for in this Agreement or otherwise available to it, all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Pledged Collateral).
 
(b)           Upon the occurrence of an Event of Default and during the continuation of such Event of Default, and concurrently with written notice to Pledgor, the Collateral Agent (personally or through an agent) is hereby authorized and empowered to transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all other rights as a holder with respect thereto, to collect and receive all cash dividends, interest and other distributions made thereon, to sell in one or more sales after ten (10) days’ notice of the time and place of any public sale or of the time at which a private sale is to take place (which notice Pledgor agrees is commercially reasonable) the whole or any part of the Pledged Collateral and to otherwise act with respect to the Pledged Collateral as though the Collateral Agent was the outright owner thereof. Any sale shall be made at a public or private sale at the Collateral Agent’s place of business, or at any place to be named in the notice of sale, either for cash or upon credit or for future delivery at such price as the Collateral Agent may deem fair, and the Collateral Agent may be the purchaser of the whole or any part of the Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of Pledgor or any right of redemption. Demands of performance, except as otherwise herein specifically provided for, notices of sale, advertisements and the presence of property at sale are hereby waived and any sale hereunder may be conducted by an auctioneer or any officer or agent of the Collateral Agent. PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE COLLATERAL AGENT AS THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO. THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE SATISFACTION IN FULL OF THE OBLIGATIONS. IN ADDITION TO THE RIGHT TO VOTE THE PLEDGED SHARES, THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL
 

 
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MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY OFFICER OR THE COLLATERAL AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT. NOTWITHSTANDING THE FOREGOING, THE COLLATERAL AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.
 
(c)           If, at the original time or times appointed for the sale of the whole or any part of the Pledged Collateral, the highest bid, if there be but one sale, shall be inadequate to discharge in full all the Secured Obligations, or if the Pledged Collateral be offered for sale in lots, if at any of such sales, the highest bid for the lot offered for sale would indicate to the Collateral Agent, in its discretion, that the proceeds of the sales of the whole of the Pledged Collateral would be unlikely to be sufficient to discharge all the Secured Obligations, the Collateral Agent may, on one or more occasions and in its discretion, postpone any of said sales by public announcement at the time of sale or the time of previous postponement of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived; provided, however, that any sale or sales made after such postponement shall be after ten (10) days’ notice to Pledgor.
 
(d)           If, at any time when the Collateral Agent in its sole discretion determines, following the occurrence and during the continuance of an Event of Default, that, in connection with any actual or contemplated exercise of its rights (when permitted under this Section 9 ) to sell the whole or any part of the Pledged Shares hereunder, it is necessary or advisable to effect a public registration of all or part of the Pledged Collateral pursuant to the Securities Act of 1933, as amended (or any similar statute then in effect) (the “ Act ”), Pledgor shall, in an expeditious manner, cause the Pledged Entities to:
 
(i)           Prepare and file with the Securities and Exchange Commission (the “ Commission ”) a registration statement with respect to the Pledged Shares and in good faith use commercially reasonable efforts to cause such registration statement to become and remain effective for such period as prospectuses are required by law to be furnished or available;
 
(ii)           Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith which, in the opinion of the Collateral Agent, are necessary or advisable to keep such registration statement effective and to comply with the provisions of the Act with respect to the sale or other disposition of the Pledged Shares covered by such registration statement;
 
(iii)           Furnish to the Collateral Agent such numbers of copies of a prospectus and a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as the Collateral Agent may request in order to facilitate the public sale or other disposition of the Pledged Shares by the Collateral Agent;
 

 
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(iv)           Use commercially reasonable efforts to register or qualify the Pledged Shares covered by such registration statement under such other securities or blue sky laws of such jurisdictions within the United States and Puerto Rico as the Collateral Agent shall request, and do such other reasonable acts and things as may be required of it to enable the Collateral Agent to consummate the public sale or other disposition in such jurisdictions of the Pledged Shares by the Collateral Agent;
 
(v)           Furnish, at the request of the Collateral Agent, on the date that shares of the Pledged Collateral are delivered to the underwriters for sale pursuant to such registration or, if the security is not being sold through underwriters, on the date that the registration statement with respect to such Pledged Shares becomes effective, (A) an opinion, dated such date, of the independent counsel representing such registrant for the purposes of such registration, addressed to the underwriters, if any, and in the event the Pledged Shares are not being sold through underwriters, then to the Collateral Agent, in customary form and covering matters of the type customarily covered in such legal opinions; and (B) a comfort letter, dated such date, from the independent certified public accountants of such registrant, addressed to the underwriters, if any, and in the event the Pledged Shares are not being sold through underwriters, then to the Collateral Agent, in a customary form and covering matters of the type customarily covered by such comfort letters and as the underwriters or the Collateral Agent shall reasonably request. The opinion of counsel referred to above shall additionally cover such other legal matters with respect to the registration in respect of which such opinion is being given as the Collateral Agent may reasonably request. The letter referred to above from the independent certified public accountants shall additionally cover such other financial matters (including information as to the period ending not more than five (5) Business Days prior to the date of such letter) with respect to the registration in respect of which such letter is being given as the Collateral Agent may reasonably request; and
 
(vi)           Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable but not later than 18 months after the effective date of the registration statement, an earnings statement which satisfies the provisions of Section 11(a) of the Act.
 
(e)           All expenses incurred in complying with Section 9(d) hereof, including, without limitation, all registration and filing fees (including all expenses incident to filing with the Financial Industry Regulatory Authority), printing expenses, fees and disbursements of counsel for the registrant, the fees and expenses of counsel for the Collateral Agent, expenses of the independent certified public accountants (including any special audits incident to or required by any such registration) and expenses of complying with the securities or blue sky laws or any jurisdictions, shall be paid by Pledgor.
 
(f)           If, at any time when the Collateral Agent shall determine to exercise its right to sell the whole or any part of the Pledged Collateral hereunder, such Pledged Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Act, the Collateral Agent may, in its discretion (subject only to applicable requirements of law), sell such Pledged Collateral or part thereof by private sale in such manner and under such circumstances as the Collateral Agent may deem necessary or advisable, but subject to the other
 

 
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requirements of this Section 9 , and shall not be required to effect such registration or to cause the same to be effected. Without limiting the generality of the foregoing, in any such event, the Collateral Agent in its discretion (x) may, in accordance with applicable securities laws, proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Pledged Collateral or part thereof could be or shall have been filed under said Act (or similar statute), (y) may approach and negotiate with a single possible purchaser to effect such sale, and (z) may restrict such sale to a purchaser who is an accredited investor under the Act and who will represent and agree that such purchaser is purchasing for its own account, for investment and not with a view to the distribution or sale of such Pledged Collateral or any part thereof.  In addition to a private sale as provided above in this Section 9 , if any of the Pledged Collateral shall not be freely distributable to the public without registration under the Act (or similar statute) at the time of any proposed sale pursuant to this Section 9 , then the Collateral Agent shall not be required to effect such registration or cause the same to be effected but, in its discretion (subject only to applicable requirements of law), may require that any sale hereunder (including a sale at auction) be conducted subject to restrictions:
 
(i)           as to the financial sophistication and ability of any Person permitted to bid or purchase at any such sale;
 
(ii)           as to the content of legends to be placed upon any certificates representing the Pledged Collateral sold in such sale, including restrictions on future transfer thereof;
 
(iii)           as to the representations required to be made by each Person bidding or purchasing at such sale relating to that Person’s access to financial information about Pledgor and such Person’s intentions as to the holding of the Pledged Collateral so sold for investment for its own account and not with a view to the distribution thereof; and
 
(iv)           as to such other matters as the Collateral Agent may, in its discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with the Bankruptcy Code and other laws affecting the enforcement of creditors’ rights and the Act and all applicable state securities laws.
 
(g)           Pledgor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (f) above. Pledgor also acknowledges that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit the Pledged Entity to register such securities for public sale under the Act, or under applicable state securities laws, even if Pledgor and the Pledged Entity would agree to do so.
 
(h)           Pledgor agrees to the maximum extent permitted by applicable law that following the occurrence and during the continuance of an Event of Default it will not at any time plead, claim or take the benefit of any appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Agreement, or
 

 
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the absolute sale of the whole or any part of the Pledged Collateral or the possession thereof by any purchaser at any sale hereunder, and Pledgor waives the benefit of all such laws to the extent it lawfully may do so. Pledgor agrees that it will not interfere with any right, power and remedy of the Collateral Agent provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Collateral Agent of any one or more of such rights, powers or remedies. No failure or delay on the part of the Collateral Agent to exercise any such right, power or remedy and no notice or demand which may be given to or made upon Pledgor by the Collateral Agent with respect to any such remedies shall operate as a waiver thereof, or limit or impair the Collateral Agent’s right to take any action or to exercise any power or remedy hereunder, without notice or demand, or prejudice its rights as against Pledgor in any respect.
 
(i)           Pledgor further agrees that a breach of any of the covenants contained in this Section 9 will cause irreparable injury to the Collateral Agent, that the Collateral Agent shall have no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 9 shall be specifically enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that the Secured Obligations are not then due and payable in accordance with the agreements and instruments governing and evidencing such obligations.
 
(j)           Each right, power and remedy herein specifically granted to the Collateral Agent or otherwise available to it shall be cumulative, and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity, or otherwise, and each such right, power and remedy, whether specifically granted herein or otherwise existing, may be exercised at any time and from time-to-time as often and in such order as may be deemed expedient by the Collateral Agent in its sole discretion.
 
10.            Waiver . No delay on the Collateral Agent’s part in exercising any power of sale, Lien, option or other right hereunder, and no notice or demand which may be given to or made upon Pledgor by the Collateral Agent with respect to any power of sale, Lien, option or other right hereunder, shall constitute a waiver thereof or limit or impair the Collateral Agent’s right to take any action or to exercise any power of sale, Lien, option, or any other right hereunder, without notice or demand, or prejudice the Collateral Agent’s rights as against Pledgor in any respect.
 
11.            Assignment . The Collateral Agent may assign, indorse or transfer any instrument evidencing all or any part of the Secured Obligations as provided in, and in accordance with, the Credit Agreement, and the holder of such instrument shall be entitled to the benefits of this Agreement.
 
12.            Termination . At the time provided in clause (b)(iii) of Section 10.11 of the Credit Agreement, the Pledged Collateral shall be released from the Lien created hereby and the Collateral Agent shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the time subject to this Agreement and all instruments of assignment or transfer executed in connection therewith or as Pledgor may reasonably request, free and clear of the Liens hereof and, except as otherwise provided herein, all of Pledgor’ s obligations hereunder shall at such time terminate.
 

 
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13.            Lien Absolute . All rights of the Collateral Agent hereunder, and all obligations of Pledgor hereunder, shall be absolute and unconditional irrespective of:
 
(a)           any lack of validity or enforceability of the Credit Agreement, any other Loan Document or any other agreement or instrument governing or evidencing any Secured Obligations;
 
(b)           any change in the time, manner or place of payment of, or in any other term of, all or any part of the Secured 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 governing or evidencing any Secured Obligations;
 
(c)           any exchange, release or non-perfection of any other Collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured Obligations;
 
(d)           the insolvency of any Loan Party; or
 
(e)           any other circumstance which might otherwise constitute a defense available to, or a discharge of, Pledgor.
 
14.            Release . Pledgor consents and agrees that the Collateral Agent may at any time, or from time to time, in its discretion:
 
(a)           renew, extend or change the time of payment, and/or the manner, place or terms of payment of all or any part of the Secured Obligations; and
 
(b)           exchange, release and/or surrender all or any of the Collateral (including the Pledged Collateral), or any part thereof, by whomsoever deposited, which is now or may hereafter be held by the Collateral Agent in connection with all or any of the Secured Obligations; all in such manner and upon such terms as the Collateral Agent may deem proper, and without notice to or further assent from Pledgor, it being hereby agreed that Pledgor shall be and remain bound upon this Agreement, irrespective of the value or condition of any of the Collateral, and notwithstanding any such change, exchange, settlement, compromise, surrender, release, renewal or extension, and notwithstanding also that the Secured Obligations may, at any time, exceed the aggregate principal amount thereof set forth in the Credit Agreement, or any other agreement governing any Secured Obligations. Pledgor hereby waives notice of acceptance of this Agreement, and also presentment, demand, protest and notice of dishonor of any and all of the Secured Obligations, and promptness in commencing suit against any party hereto or liable hereon, and in giving any notice to or of making any claim or demand hereunder upon Pledgor. No act or omission of any kind on the Collateral Agent’s part shall in any event affect or impair this Agreement.
 
15.            Reinstatement . This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against Pledgor or any Pledged Entity for liquidation or reorganization, should Pledgor or any Pledged Entity become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Pledgor’s or a Pledged Entity’s assets, and shall continue to be effective or be
 

 
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reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
 
16.            Miscellaneous .
 
(a)           The Collateral Agent may execute any of its duties hereunder by or through agents or employees and shall be entitled to advice of counsel concerning all matters pertaining to its duties hereunder.
 
(b)           The Collateral Agent shall be reimbursed for actual out-of-pocket expenses, including, without limitation, reasonable counsel fees, incurred by the Collateral Agent in connection with the administration and enforcement of this Agreement to be payable in accordance with Sections 4.4 and 4.5 of the Multiparty Agreement and Section 11.3 of the Credit Agreement.
 
(c)           Neither the Collateral Agent, nor any of its respective officers, directors, employees, agents or counsel shall be liable for any action lawfully taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
 
(d)           THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR AND ITS SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF OF PLEDGOR), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, THE COLLATERAL AGENT AND ITS SUCCESSORS AND ASSIGNS, AND SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, AND NONE OF THE TERMS OR PROVISIONS OF THIS AGREEMENT MAY BE WAIVED, ALTERED, MODIFIED OR AMENDED EXCEPT IN WRITING DULY SIGNED FOR AND ON BEHALF OF THE COLLATERAL AGENT AND PLEDGOR.
 
17.            Severability . Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of any Loan Document or any part of such provision in any other jurisdiction.
 
18.            Notices . Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon either of the parties by the other party, or whenever either of the parties desires to give or serve upon any other a communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and given in the manner specified in Section 11.11 of the Credit Agreement (provided that notices, demands, requests, consents, approvals, declarations or other communications to
 

 
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Pledgor may be given in the manner in which they may be given to the Borrower): (a) if to the Collateral Agent, to the address specified in Section 11.11 of the Credit Agreement and (b) if to Pledgor, to it, c/o of the Borrower at the Borrower’s address, facsimile number, electronic mail address or telephone number specified in such Section 11.11 of the Credit Agreement. All such notices, demands, requests and other communications made in connection with this Agreement shall be effective and be deemed to have been received on the date provided in Section 11.11(b) of the Credit Agreement as though the reference to “this Agreement” therein referred to this Agreement.
 
19.            Section Titles . The Section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.
 
20.            Counterparts . This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Agreement by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.
 
21.            Benefit of Secured Parties . All security interests granted or contemplated hereby shall be for the benefit of the Collateral Agent and the Secured Parties, and all proceeds or payments realized from the Pledged Collateral in accordance herewith shall be applied to the Obligations in accordance with the terms of the Credit Agreement.
 
22.            Authorization . Pledgor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including whether such Pledgor is an organization, the type of organization and any organization identification number issued to such Pledgor. Pledgor agrees to furnish any such information to the Collateral Agent promptly upon request. Pledgor also ratifies its authorization for the Collateral Agent to have filed in any Uniform Commercial Code jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.
 
23.             Entire Agreement . THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT OF THE PARTIES AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER THEREOF AND ANY PRIOR LETTER OF INTEREST, COMMITMENT LETTER, FEE LETTER, CONFIDENTIALITY AND SIMILAR AGREEMENTS INVOLVING ANY LOAN PARTY AND ANY OF THE AGENTS OR ANY LENDER OR ANY OF THEIR RESPECTIVE AFFILIATES RELATING TO A FINANCING OF SUBSTANTIALLY SIMILAR FORM, PURPOSE OR EFFECT.  IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND THE CREDIT AGREEMENT, THE TERMS OF THE CREDIT AGREEMENT SHALL GOVERN (UNLESS SUCH
 

 
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TERMS OF THIS AGREEMENT ARE NECESSARY TO COMPLY WITH APPLICABLE REQUIREMENTS OF LAW, IN WHICH CASE SUCH TERMS SHALL GOVERN TO THE EXTENT NECESSARY TO COMPLY THEREWITH).
 
[SIGNATURE PAGE FOLLOWS]
 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above.
 
    CDF2 HOLDINGS, LLC
     
     
   
By: 
 /s/ Gary S. Loffredo
   
Name:
 Gary S. Loffredo
   
Title:
 President
       
 
 


Signature Page to Pledge Agreement (Holdings)
 
 

 
 

   
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH, as Collateral Agent
     
     
   
By: 
 /s/ Richard O. Knowlton
   
Name:
 Richard O. Knowlton
   
Title:
 Managing Director
       
 


Signature Page to Pledge Agreement (Holdings)
 
 

 

SCHEDULE I
TO
PLEDGE AGREEMENT
 
PLEDGED SHARES

100% of the membership interests in Cinedigm Digital Funding 2, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Pledgor.

Schedule I to Pledge Agreement (Holdings)
 
 

 

SCHEDULE II
TO
PLEDGE AGREEMENT
 
FORM OF PLEDGE AMENDMENT

This Pledge Amendment, dated as of ________, 20___ is delivered pursuant to Section 6(d) of the Pledge Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Pledge Agreement. The undersigned hereby certifies that the representations and warranties in Section 5 of the Pledge Agreement are and continue to be true and correct as to the instruments and shares pledged pursuant to this Pledge Amendment. The undersigned further agrees that this Pledge Amendment may be attached to that certain Pledge Agreement, dated as of October 18, 2011, between the undersigned, as Pledgor, and Société Générale, as collateral agent (as amended, supplemented or otherwise modified, the “ Pledge Agreement ”), and that the Pledged Shares listed on this Pledge Amendment shall (a) be and become (i) “Pledged Shares” as defined in the Pledge Agreement and (ii) a part of the “Pledged Collateral” referred to in the Pledge Agreement and (b) shall be security for the prompt payment in full when due, whether at stated maturity, by acceleration or otherwise, and performance of all Secured Obligations.
 
 
   
CDF2 HOLDINGS, LLC
     
     
   
By: 
 
   
Name:
 
   
Title:
 
       
                                                                   

Name and Address of Pledgor
Pledged Entity
Class of Stock
Certificate Number(s)
Number of Shares
         
         
         
 
 



Schedule II to Pledge Agreement (Holdings)
 
 
 
 

 
EXHIBIT 10.1
 
Execution Version

 


 
$77,500,000
 
CREDIT AGREEMENT
 
DATED AS OF OCTOBER 18, 2011
 
AMONG
 
CINEDIGM DIGITAL FUNDING 2, LLC
 
AS THE BORROWER,
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
 
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
 
NATIXIS NEW YORK BRANCH, AS SYNDICATION AGENT,
 
ING CAPITAL LLC, AS DOCUMENTATION AGENT,
 
AND
 
THE LENDERS PARTY HERETO
 
SG AMERICAS SECURITIES, LLC, ING CAPITAL LLC AND
NATIXIS NEW YORK BRANCH,
AS JOINT LEAD ARRANGERS

SG AMERICAS SECURITIES, LLC AND
NATIXIS NEW YORK BRANCH,
AS JOINT BOOKRUNNERS

 
 



 
 
 

 
 
TABLE OF CONTENTS
Page
 
ARTICLE I     DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
Section 1.1
Defined Terms
Section 1.2
UCC Terms
Section 1.3
Accounting Terms and Principles
Section 1.4
Payments
Section 1.5
Interpretation
     
ARTICLE II     THE FACILITIES
Section 2.1
Commitments for Loans
Section 2.2
Borrowing Procedures
Section 2.3
Termination or Reduction of Commitments; Repayment of Obligation
Section 2.4
Voluntary Prepayments
Section 2.5
Mandatory Prepayments
Section 2.6
Interest
Section 2.7
Conversion and Continuation Options
Section 2.8
Fees
Section 2.9
Application of Payments
Section 2.10
Payments and Computations
Section 2.11
Evidence of Debt
Section 2.12
Suspension of Eurodollar Rate Option
Section 2.13
Breakage Costs; Increased Costs; Capital Requirements
Section 2.14
Taxes
Section 2.15
Substitution of Lenders
Section 2.16
Conversion of Revolving Loans to Delayed Draw Term Loans
Section 2.17
Defaulting Lender Adjustments
Section 2.18
Increase in Delayed Draw Term Loan Facility
Section 2.19
Debt Service Reserve and Debt Service Reserve Account
     
ARTICLE III     CONDITIONS TO EFFECTIVENESS AND LOANS
Section 3.1
Conditions Precedent to Effectiveness
Section 3.2
Conditions Precedent to Term Loans
Section 3.3
Conditions Precedent to DDTL Termination Date Funding
Section 3.4
Conditions Precedent to Revolving Loans
     
ARTICLE IV     REPRESENTATIONS AND WARRANTIES
Section 4.1
Corporate Existence; Compliance with Law
Section 4.2
Power and Authority; No Conflicts; Due Execution, Delivery and Enforceability
Section 4.3
Ownership of each Loan Party and Subsidiaries of Group Members
Section 4.4
Financial Statements
 
 
 
-i-

 
 
 
TABLE OF CONTENTS
(continued)
Page
Section 4.5
Material Adverse Effect
Section 4.6
Solvency
Section 4.7
Litigation
Section 4.8
Taxes
Section 4.9
Margin Regulations
Section 4.10
No Burdensome Obligations; No Defaults
Section 4.11
Investment Company Act
Section 4.12
Labor Matters
Section 4.13
ERISA
Section 4.14
Environmental Matters
Section 4.15
Intellectual Property
Section 4.16
Title; Real Property
Section 4.17
Full Disclosure
Section 4.18
Deposit and Disbursement Accounts
Section 4.19
Agreements and Other Documents
Section 4.20
DCI Spec Compliance
Section 4.21
Material Digital Cinema Deployment Agreements
Section 4.22
Priority of Loans
Section 4.23
New Build Cineplexes
Section 4.24
Second-Run Complexes
Section 4.25
Parent Holdings
     
ARTICLE V     FINANCIAL COVENANTS
Section 5.1
Maximum Average Cost per Screen
Section 5.2
Minimum Average Recurring Revenue Per Screen
Section 5.3
Maximum Consolidated Leverage Ratio
Section 5.4
Minimum Consolidated Fixed Charge Coverage Ratio
     
ARTICLE VI     REPORTING COVENANTS
Section 6.1
Financial Statements; Other Information
Section 6.2
Other Events
Section 6.3
Copies of Notices and Reports
Section 6.4
Taxes
Section 6.5
Labor Matters
Section 6.6
ERISA Matters
Section 6.7
Environmental Matters
Section 6.8
Lease Adjusted Financials
Section 6.9
Other Information
     
ARTICLE VII     AFFIRMATIVE COVENANTS
Section 7.1
Maintenance of Corporate Existence
 
 
 
 
-ii-

 
 
TABLE OF CONTENTS
(continued)
Page
Section 7.2
Compliance with Laws, Etc
Section 7.3
Payment of Obligations
Section 7.4
Maintenance of Property
Section 7.5
Maintenance of Insurance
Section 7.6
Keeping of Books
Section 7.7
Access to Books and Property; Audit Rights
Section 7.8
Environmental
Section 7.9
Use of Proceeds
Section 7.10
Additional Collateral and Guaranties
Section 7.11
Cash Management System
Section 7.12
Required Hedging
Section 7.13
Corporate Separateness
Section 7.14
Digital Cinema Deployment Agreements
Section 7.15
Exhibitor Agreements
Section 7.16
DCI Spec Compliance
Section 7.17
Certificates of Insurance
Section 7.18
Management Services Agreement
Section 7.19
Cineplex Conversion
     
ARTICLE VIII     NEGATIVE COVENANTS
Section 8.1
Indebtedness
Section 8.2
Liens
Section 8.3
Investments
Section 8.4
Asset Sales; Stock Issuances
Section 8.5
Restricted Payments
Section 8.6
Prepayment of Indebtedness
Section 8.7
Fundamental Changes
Section 8.8
Change in Nature of Business
Section 8.9
Transactions with Affiliates
Section 8.10
Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted Payments
Section 8.11
Modification of Certain Documents
Section 8.12
Accounting Changes; Fiscal Year
Section 8.13
Margin Regulations
Section 8.14
Compliance with ERISA
Section 8.15
Hazardous Materials
Section 8.16
Capital Expenditures
Section 8.17
No Foreign Subsidiaries
Section 8.18
Bank Accounts
     
ARTICLE IX     EVENTS OF DEFAULT
Section 9.1
Events of Default
 
 
 
-iii-

 
 
TABLE OF CONTENTS
(continued)
Page
Section 9.2
Remedies
Section 9.3
CHG Right to Cure
     
ARTICLE X     THE AGENTS
Section 10.1
Appointment and Authorization of the Agents
Section 10.2
Binding Effect
Section 10.3
Use of Discretion
Section 10.4
Delegation of Rights and Duties
Section 10.5
Reliance and Liability
Section 10.6
Agents Individually
Section 10.7
Lender Credit Decision
Section 10.8
Expenses; Indemnities
Section 10.9
Resignation of Collateral Agent
Section 10.10
Resignation of Administrative Agent
Section 10.11
Release of Collateral or Guarantors
Section 10.12
Additional Secured Parties
Section 10.13
Removal of Agents
     
ARTICLE XI     MISCELLANEOUS
Section 11.1
Amendments, Waivers, Etc
Section 11.2
Assignments and Participations; Binding Effect
Section 11.3
Costs and Expenses
Section 11.4
Indemnities
Section 11.5
Survival
Section 11.6
Limitation of Liability for Certain Damages
Section 11.7
Lender-Creditor Relationship
Section 11.8
Right of Setoff
Section 11.9
Sharing of Payments, Etc
Section 11.10
Marshaling; Payments Set Aside
Section 11.11
Notices
Section 11.12
Electronic Transmissions
Section 11.13
Governing Law
Section 11.14
Jurisdiction
Section 11.15
WAIVER OF JURY TRIAL
Section 11.16
Severability
Section 11.17
Execution in Counterparts
Section 11.18
Entire Agreement
Section 11.19
Use of Name
Section 11.20
Non-Public Information; Confidentiality
Section 11.21
USA Patriot Act; OFAC

 

 
 
-iv-

 
TABLE OF CONTENTS
(continued)
 
SCHEDULES
 
 
Schedule I
Commitments
Schedule II
Addresses for Notices
Schedule 3.1
Conditions Precedent to Effectiveness
Schedule 3.2
Conditions Precedent to Term Loans
Schedule 3.3
Conditions Precedent to DDTL Termination Date Funding
Schedule 4.2
Governmental Permits
Schedule 4.3
Ownership of Group Members and Subsidiaries
Schedule 4.8
Tax Affiliate
Schedule 4.13
ERISA
Schedule 4.14
Environmental Matters
Schedule 4.16
Real Property
Schedule 4.19
Agreements and Other Documents
Schedule 4.20
DCI Spec Compliance
Schedule 4.21
Distributors - Material Digital Cinema Deployment Agreements
Schedule 7.5
Insurance
Schedule 8.1
Existing Indebtedness
Schedule 8.2
Existing Liens
Schedule 8.3
Existing Investments
Schedule 9.1(i)
Distributors
Schedule 9.1(l)
Intercompany Agreements
     
EXHIBITS
   
Exhibit A
Form of Assignment
Exhibit B -1
Form of Revolving Loan Note
Exhibit B-2
Form of Initial Advance Term Loan Note
Exhibit B-3
Form of Delayed Draw Term Loan Note
Exhibit C
Form of Notice of Borrowing
Exhibit D
Form of Notice of Conversion or Continuation
Exhibit E
Form of Compliance Certificate
Exhibit F-1
Form of Guaranty and Security Agreement
Exhibit F-2
Form of Holdings Security Agreement
Exhibit G
Form of Exhibitor Agreement
Exhibit H
Form of Service Agreement
Exhibit I
Form of Notice of DDTL Termination Date Funding
Exhibit J
Form of Systems Financing Notice


 
-v-

 

 
CREDIT AGREEMENT
 
This CREDIT AGREEMENT dated as of October 18, 2011, is entered into among CINEDIGM DIGITAL FUNDING 2, LLC, a Delaware limited liability company (the " Borrower "), the Lenders, and SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH (" SG "), as Administrative Agent and Collateral Agent.
 
The parties hereto agree as follows:
 
ARTICLE I                       
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
 
Section 1.1     Defined Terms .  As used in this Agreement, the following terms have the following meanings:
 
" Accrued Default Interest " has the meaning specified in Section 2.6(c) .
 
" Administrative Agent " means SG in its capacity as an administrative agent under the Loan Documents or any successor Administrative Agent.
 
" Administrative Servicer " means Cinedigm, in its capacity as administrative servicer under the Management Services Agreement or any successor administrative servicer appointed in accordance with the terms of the Management Services Agreement and this Agreement.
 
" Affected Lender " has the meaning specified in Section 2.15(a) .
 
" Affiliate " means, with respect to any Person, each officer, director, general partner or joint-venturer of such Person and any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.  For purpose of this definition, " control " means the possession of either (a) the power to vote, or the beneficial ownership of, 10% or more of the Voting Stock of such Person or (b) the power to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
 
" Agents " means, collectively, the Collateral Agent and the Administrative Agent, and " Agent " means either of them.
 
" Agreement " means this Credit Agreement.
 
" Applicable Margin " means a percentage equal to (a) with respect to Base Rate Loans, 3.50% per annum and (b) with respect to Eurodollar Rate Loans, 4.50% per annum.
 
" Application Date " means a Monthly Application Date or a Quarterly Application Date, as the case may be.
 
" Approved Exhibitor " means an Exhibitor acceptable to (a) prior to the Effective Date, the Bookrunners, and (b) thereafter, the Administrative Agent, in whose theaters Digital Systems are installed.
 

 
 

 

" Approved Fund " means, with respect to any Lender, any Person (other than a natural Person) that (a) is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and (b) is advised or managed by (i) such Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an individual) or any Affiliate of any Person (other than an individual) that administers or manages such Lender.
 
" Approved Vendor " means (a) a Person acceptable to (i) prior to the Effective Date, the Bookrunners in their sole discretion and (ii) thereafter, the Administrative Agent in its sole discretion that sells Digital Systems to Holdings without providing any services in conjunction with the sale or (b) a Person acceptable to (i) prior to the Effective Date, the Bookrunners in their sole discretion and (ii) thereafter, the Administrative Agent in its sole discretion that sells Digital Systems to Holdings and provides services related thereto with respect to delivery, set-up, training, warranties, and such other services typically supplied by commercial entities typically recognized in the relevant industry as "vendors" or "suppliers" and, in either case, which Digital Systems are subsequently sold to CHG and leased back by Holdings pursuant to the CHG Sale Leaseback.
 
" Arrangers " means SG Americas Securities, LLC, ING Capital LLC and Natixis, each in its capacity as joint lead arranger with respect to this Agreement.
 
" Assignment " means an assignment agreement entered into by a Lender, as assignor, and any prospective assignee thereof and accepted by the Administrative Agent, in substantially the form of Exhibit A .
 
" Availability Period " means the period from the Initial Funding Date until the DDTL Termination Date unless a DDTL Termination Date Funding is funded in accordance with Section 2.1(b) in which case the Availability Period shall be extended until the earlier of (a) the three month anniversary of the DDTL Termination Date and (b) the date on which the Commitments are terminated pursuant to Section 9.2 .
 
" Average Debt Per Screen " means, as of any date of determination, the quotient of the aggregate principal amount of Term Loans outstanding as of such date divided by the aggregate number of Installed Digital Systems financed hereunder as of such date.
 
" Average Recurring Revenue Per Screen " means, as of any date of determination and for the period commencing on the Effective Date and ending on such date of determination, the quotient of (a)(i)(A) the sum of all VPFs and all other amounts earned pursuant to Digital Cinema Deployment Agreements during such period and all Exhibitor Payments payable with respect to such period (in each case, after giving effect to any offsets, rebates, or similar adjustments) multiplied by (B) 12 divided by (ii) the number of full fiscal months elapsed in such period, divided by (b) the Average Screens in Service for such period.  For purposes of clause (ii) above, the fiscal month in which the Effective Date occurs shall be deemed to be a full fiscal month.
 
" Average Screens in Service " means, for any period of determination, the quotient of (a) the sum of (i) the aggregate number of Screens in Service on (A) the Effective Date if the
 

 
-2-

 

Effective Date falls within such period or (B) the first day of the first full fiscal month in such period if the Effective Date does not fall within such period, (ii) the aggregate number of Screens in Service on the first day of each of the subsequent full fiscal months in such period (other than the last such month of such period), and (iii) the aggregate number of Screens in Service on the last day of such period, divided by (b) the number of full fiscal months in such period of determination.  For purposes of clause (b) , the fiscal month in which the Effective Date occurs shall be deemed to be a full fiscal month.
 
By way of example, for a four-fiscal month period consisting of the months of January, February, March and April and assuming the Effective Date occurs on January 10th, if there are
 
 
·
5 Screens in Service on January 1
 
·
10 Screens in Service on January 10th (i.e. the Effective Date),
 
·
20 Screens in Service on February 1,
 
·
40 Screens in Service on March 1,
 
·
45 Screens in Service on April 1 and
 
·
50 Screens in Service on April 30,
 
then the Average Screens in Service for such four-month period is equal to 30.
 
" Back-Up Services Expenses " has the meaning set forth in the Management Services Agreement.
 
" Base Rate" means, for any day, a rate per annum equal to the highest of (a) the rate last quoted by The Wall Street Journal as the "Prime Rate" in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519)(Selected Interest Rates) as the "bank prime loan" rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by Administrative Agent) or any similar release by the Federal Reserve Board (as determined by Administrative Agent), (b) the sum of 0.50% per annum and the Federal Funds Rate, and (c) the sum of (i) the Eurodollar Rate (based on an Interest Period of one month determined two (2) Business Days prior to such day) plus (ii) 1.00%. Any change in the Base Rate due to a change in any of the foregoing shall be effective on the effective date of such change in the "prime loan" rate, the Federal Funds Rate or Eurodollar Rate for an interest period of one month, as the case may be.
 
" Base Rate Loan " means any Loan that bears interest based on the Base Rate.
 
" Benefit Plan " means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the United States or otherwise) to which any Group Member incurs or otherwise has any obligation or liability, contingent or otherwise.
 
" Bookrunners " means SG Americas Securities, LLC and Natixis, each in its capacity as joint bookrunner with respect to this Agreement.
 
" Borrower " has the meaning specified in the preamble hereto.
 

 
-3-

 

" Borrowing " means (a) a borrowing consisting of Revolving Loans, Initial Advance Term Loans or Delayed Draw Term Loans made on the same day by the Revolving Loan Lenders or Term Loan Lenders, as the case may be, according to their respective Revolving Loan Commitments, Initial Advance Term Loan Commitments or Delayed Draw Term Loan Commitments or (b) a release of funds in the DDTL Escrow Account by the Administrative Agent to the Borrower.  The funding of any DDTL Termination Date Funding by the Delayed Draw Term Loan Lenders to the DDTL Escrow Account in accordance with Section 2.1(b) shall not constitute a "Borrowing".
 
" Budget " means, with respect to any period, an annual operating budget for Holdings and the Group Members, including the amount and timing of installation of Digital Systems, an income statement, balance sheet and statement of cash flows, including all line item categories, line items and cumulative amounts (with a detailed breakout of Capital Expenditures), details and a statement of underlying assumptions and estimates, in form and substance reasonably satisfactory to the Administrative Agent based upon a good faith determination.
 
" Business Day " means any day of the year that is not a Saturday, Sunday or a day on which banks are required or authorized to close in New York City or the State of New Jersey and, when determined in connection with notices and determinations in respect of any Eurodollar Rate or Eurodollar Rate Loan or any funding, conversion, continuation, Interest Period or payment of any Eurodollar Rate Loan, that is also a day on which dealings in Dollar deposits are carried on in the London interbank market.
 
" Capital Expenditures " means, for any Person for any period, the aggregate of all expenditures, whether or not made through the incurrence of Indebtedness, by such Person and its Subsidiaries during such period for the purchase, acquisition, leasing (pursuant to a Capital Lease), receipt, delivery, construction, installation, replacement, repair, redeployment, substitution or improvement of fixed or capital assets or additions to such assets, in each case required to be capitalized under GAAP on a Consolidated balance sheet of such Person, excluding interest capitalized during construction.
 
" Capital Lease " means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any property (whether real, personal or mixed) by such Person as lessee that has been or is required to be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.
 
" Capitalized Lease Obligations " means, at any time, with respect to any Capital Lease, any lease entered into as part of any Sale and Leaseback Transaction or any synthetic lease of any Person, the amount of all obligations of such Person that is (or that would be required to be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.
 
" Cash Collateral Account " means (a) a deposit account or securities account in the name of the Borrower and under the exclusive "control" (as defined in the applicable UCC) of the Collateral Agent and (i) in the case of a deposit account, from which the Borrower may not make withdrawals except as permitted by the Collateral Agent and (ii) in the case of a securities account, with respect to which the Collateral Agent shall be the entitlement holder and the only
 

 
-4-

 

Person authorized to give (or to authorize another Person to give) entitlement orders with respect thereto and (b) solely with respect to amounts paid by Distributors with respect to Installed Digital Systems, the Distributor Lockbox Account.
 
" Cash Equivalents " means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guaranteed or insured by the United States federal government or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least "A-1" from S&P or at least "P-1" from Moody's, (c) any commercial paper rated at least "A-1" by S&P or "P-1" by Moody's and issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, certificate of deposit, overnight bank deposit or bankers' acceptance issued or accepted by any Lender or any commercial bank that is, in each case, rated investment grade by both S&P and Moody's, (e) interests in any money market fund registered under the Investment Company Act of 1940 that (i) has substantially all of its assets invested continuously in the types of investments referred to in clause (a) , (b) , (c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moody's the highest rating obtainable for money market funds in the United States; provided , however , that the maturities of all obligations specified in any of clauses (a) through (d) above shall not exceed 365 days and (f) other cash equivalents determined by the Administrative Agent to have a risk equivalent to items rated at least "A-1" by S&P or "P-1" by Moody's and otherwise acceptable from time to time to the Administrative Agent.
 
" Cash Expense Report " means a report delivered pursuant to Section 6.1(l)
 
" Cash Management Accounts " has the meaning set forth in the Multiparty Agreement.
 
" CDF2 Loan Agreement " means the Loan Agreement between the Borrower, as lender, and CHG, as borrower, on terms and conditions satisfactory to the Bookrunners in their sole discretion.
 
" CDF2 Loan Documents " means, collectively, the CDF2 Loan Agreement, the CDF2 Loan Security Documents, the Multiparty Agreement and all agreements, notices, certificates and other documents executed in connection with the CDF2 Loan Agreement, in each case, on terms and conditions satisfactory to (a) prior to the Effective Date, the Bookrunners in their sole discretion, and (b) thereafter, the Administrative Agent in its sole discretion and as the same may be amended, restated, supplemented, modified and/or refinanced from time to time in accordance with the terms of the CDF2 Loan Documents, this Agreement and the Multiparty Agreement.
 
" CDF2 Loan Security Documents " has the meaning set forth in the Multiparty Agreement.
 
" CDF2 Non-Recourse Loans " means the "Loans" as defined in the CDF2 Loan Documents.
 

 
-5-

 

" CERCLA " means the United States Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.).
 
" Certificate of Acceptance " has the meaning specified in Section 6.1(k) .
 
" Change of Control " means the occurrence of any of the following:  (a) Cinedigm shall cease to own and control legally and beneficially a majority of the economic and voting rights associated with ownership of the outstanding Voting Stock of all classes of Voting Stock of Parent Holdings, (b) Parent Holdings shall cease to own and control legally and beneficially a majority of the economic and voting rights associated with ownership of the outstanding Voting Stock of all classes of Voting Stock of Holdings, (c) Holdings shall cease to own and control legally and beneficially a majority of the economic and voting rights associated with ownership of the outstanding Voting Stock of all classes of Voting Stock of the Borrower, or (d) any "change in control" or similar event shall occur under the terms of any Material Digital Cinema Deployment Agreement that results in the termination of such Material Digital Cinema Deployment Agreement by the Distributor party thereto; provided , that, (i) in the case of clauses (b) and (c) above, it shall be a condition to the Sale by Parent Holdings or Holdings (or any subsequent owner) of any of the Voting Stock of Holdings or the Borrower, as the case may be, that the same be pledged to the Collateral Agent, for the benefit of the Secured Parties and on terms and conditions satisfactory to the Collateral Agent, to secure the Secured Obligations and (ii) any of the foregoing which is consented to in advance in writing by the Required Lenders in their sole discretion shall not constitute an Event of Default under Section 9.1(h) .
 
" CHG " means CHG-MERIDIAN U.S. Finance, Ltd., a California corporation, and its successors and permitted assigns under the CHG Lease Facility and the CDF2 Loan Agreement; provided that the term "CHG" shall include, where appropriate, the CHG Lease Collateral Agent (as defined in the CHG Lease Agreement).
 
" CHG Lease Advances " means the funds advanced by CHG to acquire title to the Digital Systems to be leased pursuant to the CHG Lease Facility .
 
" CHG Lease Agreement " has the meaning set forth in the Multiparty Agreement.
 
" CHG Lease Facility " means the lease facility provided by CHG and any other CHG Lease Participant to Holdings and evidenced by the CHG Lease Facility Documents in an aggregate amount advanced by CHG (without giving effect to advances funded with the proceeds of the CDF2 Non-Resource Loans) of $23,050,000 (which may be increased to up to $28,900,000) and which (when combined with advances funded with the proceeds of CDF2 Non-Recourse Loans) will fund up to $58,500 per Designated Installed Digital System and up to $53,500 per any other Installed Digital System.
 
" CHG Lease Facility Documents " means, collectively, the CHG Lease Agreement, all sale and leaseback agreements, all schedules, supplemental terms riders and confirmations thereunder, all updates to such schedules and confirmations, all irrevocable order of payments and all updates thereto, the CHG Lease Security Documents, all commitment letters by CHG to fund not less than $23,050,000 to Holdings (without giving effect to advances funded with the proceeds of the CDF2 Non-Resource Loans), each purchase and sale agreement with respect to
 

 
-6-

 

CHG's acquisition of rights in the Installed Digital Systems which are subject to the CHG Lease Agreement, the Multiparty Agreement and all other agreements, certificates and other documents executed in connection with the CHG Lease Agreement, in each case, on terms and conditions satisfactory to (a) prior to the Effective Date, the Bookrunners in their sole discretion, and (b) thereafter, the Administrative Agent in its sole discretion, and as the same may be amended, restated, supplemented, modified and/or refinanced from time to time in accordance with the terms of this Agreement.
 
" CHG Lease Participant " means CHG and any permitted assignee of CHG under the CHG Lease Agreement.
 
" CHG Lease Security Documents " has the meaning set forth in the Multiparty Agreement.
 
" CHG Sale Leaseback " means the sale and leaseback transaction between Holdings, as seller/lessee and CHG, as purchaser/lessor.
 
" Christie Deferred Payment " means a deferred payment in a principal amount not to exceed $600,000 payable by Parent Holdings to Christie Digital Systems USA, Inc. pursuant to the Deferred Payment and Security Agreement (Neighborhood) dated as of March 3, 2009.
 
" Cinedigm " means Cinedigm Digital Cinema Corp., a Delaware corporation.
 
" Code " means the U.S. Internal Revenue Code of 1986.
 
" Collateral " means (a) in the case of Parent Holdings, (i) all Securities of Holdings and the proceeds thereof and (ii) all cash and other amounts maintained in the Distributor Lockbox Account to the extent constituting revenues and earnings derived from the Installed Digital Systems (including VPFs), in each case, on a non-recourse basis (other than to the extent of remedies expressly provided under the Loan Documents to which Parent Holdings is a party), (b) in the case of Holdings, (i) all Securities of the Borrower and the proceeds thereof on a non-recourse basis (other than to the extent of remedies expressly provided under the Loan Documents to which Holdings is a party) and (ii) subject to Section 10.11(c) of this Agreement, the Installed Digital Systems (it being understood that such Installed Digital Systems shall be sold, subject to the Collateral Agent's Lien, to CHG pursuant to the CHG Sale Leaseback), (c) the proceeds of each of the foregoing and (d) in the case of any other Loan Party, all property and interests in property and proceeds thereof now owned or hereafter acquired by such Loan Party in or upon which a Lien is granted or purported to be granted pursuant to any Loan Document, including without limitation (i) the Borrower's Cash Management Accounts and all cash and other amounts maintained therein, (ii) the Borrower's rights in and to each CDF2 Loan Document, (iii) the Borrower's rights in and to each Digital Cinema Deployment Agreement, each Exhibitor Agreement, each CHG Lease Facility Document (including without limitation, its rights in the Holdings Operating Account and the Equipment Purchase Account), each Supply Agreement and the Management Services Agreement (in each case to the extent assigned to the Borrower by CHG pursuant to the CDF2 Loan Security Documents) and (iv) the Borrower's rights in and to (A) each Digital Cinema Deployment Agreement, each Exhibitor Agreement and
 

 
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each Supply Agreement (in each case to the extent contributed to the Borrower by Holdings pursuant to the Sale and Contribution Agreement) and (B) the Management Services Agreement.
 
" Collateral Agent " means SG in its capacity as collateral agent under the Loan Documents or any successor collateral agent.
 
" Collection Account " has the meaning set forth in the Multiparty Agreement.
 
" Commitment " means, as to any Lender, the sum of its Revolving Loan Commitment and its Term Loan Commitments, if applicable.
 
" Commitment Availability " means, as of any date, the amount by which the Commitments then outstanding (including amounts then on deposit in the DDTL Escrow Account) exceed the aggregate outstanding principal amount of all Loans as of such date (after giving effect to any borrowings and prepayments or repayments of Loans occurring on such date).
 
" Compliance Certificate " means a certificate substantially in the form of Exhibit E .
 
" Consents " means, collectively, (a) a consent from each Distributor party to a Digital Cinema Deployment Agreement, (b) to the extent not included in any Exhibitor Agreement, a consent from each Approved Exhibitor party to an Exhibitor Agreement, and (c) to the extent not included in the Management Services Agreement, a consent from the Administrative Servicer, in each case in form and substance satisfactory to the Administrative Agent.
 
" Consolidated " means, with respect to any Person, the financial results of such Person and its Subsidiaries consolidated in accordance with GAAP.
 
" Consolidated Adjusted EBITDA " means, with respect to the Borrower and its Subsidiaries on a Consolidated basis as of any date of determination, (a) Consolidated EBITDA for the most recent trailing twelve-month period multiplied by (b) the Screens in Service Ratio for such period.
 
" Consolidated Cash Interest Expense " means, with respect to the Borrower and its Subsidiaries on a Consolidated basis for any period, the Consolidated Interest Expense for such period less the sum of, in each case to the extent included in the definition of Consolidated Interest Expense, (a) the amortized amount of debt discount and debt issuance costs, (b) charges relating to write-ups or write-downs in the book or carrying value of existing Consolidated Total Debt, (c) interest payable in issuances of Indebtedness or by addition to the principal of the related Indebtedness and (d) other non-cash interest expense.
 
" Consolidated Debt Service " means for any fiscal period, the sum of (i) Consolidated Cash Interest Expense for the most recent trailing twelve-month period multiplied by the Screens in Service Ratio for such period and (ii) scheduled principal payments on the Facilities for the most recently-ended Fiscal Quarter multiplied by four.  For the avoidance of doubt, amounts paid from Excess Cash Flow with respect to the Facilities shall not be included in the determination of Consolidated Debt Service.
 

 
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" Consolidated EBITDA " means, on any date of determination, with respect to the Borrower and its Subsidiaries on a Consolidated basis, net income determined in accordance with GAAP (" Net Income ") for the most recent trailing twelve-month period (after eliminating interest earned, income tax credits, non-cash gains added into the calculation of Net Income and any extraordinary gains and losses, including gains and losses from the sale of assets), plus, only to the extent deducted in determining Net Income and without duplication, the sum of the following for such period: (i) depreciation and amortization allowances, (ii) Consolidated Interest Expense and other fees and other charges paid or accrued on Indebtedness, (iii) Restricted Payments to Holdings solely to the extent permitted by Sections 4.4 or 4.5 of the Multiparty Agreement (other than reimbursement of expenses of Holdings or Cinedigm), (iv) tax expense for taxes measured by net income of the Borrower and its Subsidiaries (whether paid or accrued), and including taxes paid or accrued by direct or indirect equityholders of the Borrower with respect to such net income but only to the extent such tax expense is paid or reimbursed by Borrower via Restricted Payments permitted hereunder, and (v) other non-cash charges (including, but not limited to the portion of the Installation Management Fees paid by the issuance of a subordinated promissory note instead of cash, the accrued portion of the Installation Management Fees and the portion of the accrued Incentive Servicing Fees paid by the issuance of a promissory note instead of cash, and other expenses accrued but not paid in cash, but excluding bad debt write-offs and reserves (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to such extent)), all of the foregoing prepared in accordance with GAAP.
 
" Consolidated Fixed Charge Coverage Ratio " means, with respect to the Borrower and its Subsidiaries on a Consolidated basis as of any date of determination, the ratio of (a) Consolidated Adjusted EBITDA in respect of the trailing twelve-month period most recently ended to (b) Consolidated Fixed Charges in respect of the trailing twelve-month period most recently ended.
 
" Consolidated Fixed Charges " means, with respect to the Borrower and its Subsidiaries on a Consolidated basis as of any date of determination, the sum of (a) Consolidated Debt Service in respect of the trailing twelve-month period most recently ended, plus (b) Capital Expenditures made by the Borrower and its Subsidiaries (or for which the Borrower made a permitted Restricted Payment to Holdings) during the trailing twelve-month period most recently ended (other than Capital Expenditures permitted under Section 8.16(a) and Section 9.1(t)(i) ), plus (c) Consolidated Income Tax Liability in respect of the trailing twelve-month period most recently ended.
 
" Consolidated Income Tax Liability " means, for any Person for any period and except to the extent deducted from (and not subsequently added back to) Consolidated EBITDA, the total liability for United States federal income taxes and other taxes measured by net income actually paid or, without duplication, payable in cash (including distributions for taxes made by such Person to direct or indirect holders of its equity) of such Person for such period.
 
" Consolidated Interest Expense " means, with respect to the Borrower and its Subsidiaries on a Consolidated basis for any period, (a) Consolidated total interest expense (including that attributable to Capital Lease Obligations in accordance with GAAP) of the Borrower and its
 

 
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Subsidiaries for such period and including, in any event, (i) interest capitalized during such period and net recurring costs under Interest Rate Contracts permitted hereunder for such period including the amortized portion of any premium paid for any such Interest Rate Contract containing a premium payment (but excluding, for avoidance of doubt, all payments that would be required to be made and any change in value thereof in respect of any Interest Rate Contract in the event of a termination (including an early termination thereof)) and (ii) all fees, charges, commissions, discounts and other similar obligations (other than reimbursement obligations) with respect to letters of credit, bank guarantees, banker's acceptances, surety bonds and performance bonds (whether or not matured) payable by the Borrower and its Subsidiaries during such period minus without duplication (b) the sum of (i) net recurring amounts received by the Borrower and its Subsidiaries under Interest Rate Contracts permitted hereunder for such period (other than amounts that would be received in respect of any Interest Rate Contract in the event of a termination (including an early termination thereof)) and (ii) Consolidated interest income of the Borrower and its Subsidiaries for such period.
 
" Consolidated Leverage Ratio " means, with respect to the Borrower and its Subsidiaries on a consolidated basis as of any date of determination, the ratio of (a) Consolidated Total Debt outstanding as of such date to (b) Consolidated Adjusted EBITDA in respect of the trailing twelve-month period most recently ended.
 
" Consolidated Total Debt " means, on any date with respect to the Borrower and its Subsidiaries on a consolidated basis as of any date of determination, all Indebtedness (other than obligations owing to SG under the SG Advisory Fee Note) of a type described in clause (a) , (b) , (c)(i) , (d) or (f) of the definition thereof outstanding on such date and, without duplication, all Guaranty Obligations with respect to any such Indebtedness less the amount of cash and Cash Equivalents to be applied to the prepayment of the Term Loans pursuant to Section 4.5(k) of the Multiparty Agreement on the next Quarterly Application Date.
 
" Constituent Documents " means, with respect to any Person, collectively and, in each case, together with any modification of any term thereof, (a) the articles of incorporation, certificate of incorporation, constitution or articles or certificate of organization or formation of such Person, (b) the bylaws, operating agreement, partnership agreement or joint venture agreement of such Person, (c) any other constitutive, organizational or governing document of such Person, whether or not equivalent, and (d) any other document setting forth the manner of election or duties of the directors, officers, managers, managing members or partners of such Person or the designation, amount or relative rights, limitations and preferences of any Stock of such Person.
 
" Contractual Obligation " means, with respect to any Person, any provision of any Security issued by such Person or of any document or undertaking (other than a Loan Document) to which such Person is a party or by which it or any of its property is bound or to which any of its property is subject, including without limitation all Exhibitor Agreements, all Supply Agreements, the Management Services Agreement, all Service Agreements, all Digital Cinema Deployment Agreements, all CHG Lease Facility Documents, all CDF2 Loan Documents and all IP Licenses.
 

 
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" Control Agreement " means, with respect to any lockbox, deposit account, securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance reasonably satisfactory to the Collateral Agent, among the Collateral Agent, the applicable Deposit Bank or other Person at which such account or contract is maintained or with which such entitlement or contract is carried and the Loan Party maintaining such account or contract, effective to grant "control" (as defined under the applicable UCC) or, if required hereunder, exclusive "control" over such account to the Collateral Agent or, in the case of (a) the Distributor Lockbox Account, the collateral agent provided in the Distributor Lockbox Collateral Agency Agreement, (b) the Holdings Operating Account and the Equipment Purchase Account (as defined in the Multiparty Agreement), the Collateral Agent as designee of CHG and the Borrower and (c) the Use Tax Account (as defined in the Multiparty Agreement), the Collateral Agent as designee of the Borrower.
 
" Copyrights " means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to copyrights and all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith.
 
" Corporate Chart " means a document in form reasonably acceptable to the Administrative Agent and setting forth, as of a date set forth therein, for each Person that is a Loan Party, that is subject to Section 7.10 or that is a Subsidiary or joint venture of any of them, (a) the full legal name of such Person, (b) the jurisdiction of organization and any organizational number and tax identification number of such Person, (c) the location of such Person's chief executive office (or, if applicable, sole place of business) and (d) the number of shares of each class of Stock of such Person authorized, the number outstanding and the number and percentage of such outstanding shares for each such class owned, directly or indirectly, by any Loan Party or any Subsidiary of any of them.
 
" Customary Permitted Liens " means, with respect to any Person, any of the following:
 
(a)     Liens (i) with respect to the payment of taxes, assessments or other governmental charges or (ii) of suppliers, carriers, materialmen, warehousemen, workmen or mechanics and other similar Liens, in each case imposed by law or arising in the ordinary course of business, and, for each of the Liens in clauses (i) and (ii) above for amounts that are not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP;
 
(b)     Liens of a collection bank on items in the course of collection arising under Section 4-208 of the UCC as in effect in the State of New York or any similar section under any applicable UCC or any similar Requirement of Law of any foreign jurisdiction;
 
(c)     pledges or cash deposits made in the ordinary course of business (i) in connection with workers' compensation, unemployment insurance or other types of social security benefits (other than any Lien imposed by ERISA), (ii) to secure the performance of bids, tenders, leases (other than Capital Leases) sales or other trade contracts (other than for the repayment of borrowed money) or (iii) made in lieu of, or to secure the performance of,
 

 
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surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation);
 
(d)     judgment liens (other than for the payment of taxes, assessments or other governmental charges) securing judgments and other proceedings not constituting an Event of Default under Section 9.1(f) and pledges or cash deposits made in lieu of, or to secure the performance of, judgment or appeal bonds in respect of such judgments and proceedings;
 
(e)     Liens (i) arising by reason of zoning restrictions, easements, licenses, reservations, restrictions, covenants, rights-of-way, encroachments, minor defects or irregularities in title (including leasehold title) and other similar encumbrances on the use of real property or (ii) consisting of leases, licenses or subleases granted by a lessor, licensor or sublessor on its property (in each case other than Capital Leases) otherwise permitted under Section 8.4 that, for each of the Liens in clauses (i) and (ii) above, do not, in the aggregate, materially (x) impair the value or marketability of such real property or (y) interfere with the ordinary conduct of the business conducted and proposed to be conducted at such real property;
 
(f)     Liens of landlords and mortgagees of landlords (i) arising by statute or under any lease or related Contractual Obligation entered into in the ordinary course of business, (ii) on fixtures and movable tangible property located on the real property leased or subleased from such landlord, (iii) for amounts not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and (iv) for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP; and
 
(g)     the title and interest of a lessor or sublessor in and to personal property permitted to be leased or subleased under this Agreement (other than through a Capital Lease), in each case extending only to such personal property.
 
" DDTL Escrow Account " means the deposit account established and maintained in the name of the Administrative Agent identified as the "DDTL Escrow Account" in Section 2.1(d) .
 
" DDTL Increase Effective Date " has the meaning set forth in Section 2.18(d) .
 
" DDTL Termination Date " means the first anniversary of the Effective Date.
 
" DDTL Termination Date Funding " has the meaning set forth in Section 2.1(b) .
 
" Debt Service Account " has the meaning set forth in the Multiparty Agreement.
 
" Debt Service Reserve " means, as of any date of determination, a cash reserve held by the Borrower in an amount equal to the product of (i) $1,400 and (ii) the number of Installed Digital Systems as of the applicable date of determination (giving effect to all dispositions (other than pursuant to the CHG Sale Leaseback) and acquisitions of Digital Systems as of such date).
 
" Debt Service Reserve Account " has the meaning set forth in the Multiparty Agreement.
 

 
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" Default " means any Event of Default and any event that, with the passing of time or the giving of notice or both, would become an Event of Default.
 
" Defaulting Lender " means, at any time, a Lender as to which the Administrative Agent has notified the Borrower that (a) such Lender has failed for three or more Business Days to comply with its obligations under this Agreement to make a Loan or other payment obligation (a " funding obligation "), (b) such Lender has notified the Administrative Agent, or has stated publicly, that it will not comply with a funding obligation hereunder, or has defaulted on its funding obligations under any other loan agreement or credit agreement or other similar/other financing agreement, (c) such Lender has, for three or more Business Days, failed to confirm in writing to the Administrative Agent, in response to a written request of the Administrative Agent, that it will comply with its funding obligations hereunder, or (d) a Lender Insolvency Event has occurred and is continuing with respect to such Lender (other than via an Undisclosed Administration); provided that neither the reallocation of funding obligations provided for in Section 2.17(a)(i) as a result of a Lender's being a Defaulting Lender nor the performance by Non-Defaulting Lenders of such reallocated funding obligations will by themselves cause the relevant Defaulting Lender to become a Non-Defaulting Lender and provided further that a Lender shall not be deemed a Defaulting Lender solely by virtue of the acquisition or maintenance of an ownership interest in such Lender or its Lender Parent Company by a Governmental Authority or an instrumentality thereof.  Any determination that a Lender is a Defaulting Lender under clauses (a) through (d) above will be made by the Administrative Agent in its sole discretion acting in good faith.  The Administrative Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition.
 
" Delayed Draw Term Loan " has the meaning assigned to such term in Section 2.1(b) .
 
" Delayed Draw Term Loan Commitments " means, for any Delayed Draw Term Loan Lender, the amount set opposite such Delayed Draw Term Loan Lender's name on Schedule I as its Delayed Draw Term Loan Commitment, or if such Delayed Draw Term Loan Lender has entered into any Assignment, as set forth for such Delayed Draw Term Loan Lender as its Delayed Draw Term Loan Commitment in the Register maintained by the Administrative Agent pursuant to Section 2.11 , as such amount may be reduced, terminated or increased pursuant to Section 2.3 , Section 2.18 , Article IX or otherwise under this Agreement.  The initial amount of the aggregate Delayed Draw Term Loan Commitments is $50,000,000.
 
" Delayed Draw Term Loan Facility " means, at any time, the aggregate Delayed Draw Term Loans and unused Delayed Draw Term Loan Commitments of all Delayed Draw Term Loan Lenders at such time.
 
" Delayed Draw Term Loan Lender " means, at any time, any Lender that has a Delayed Draw Term Loan Commitment or holds a Delayed Draw Term Loan at such time.
 
" Delayed Draw Term Loan Note " means a promissory note of the Borrower payable to the order of any Delayed Draw Term Loan Lender in an amount not to exceed the Delayed Draw Term Loan Commitment of such Delayed Draw Term Loan Lender, in substantially the form of the attached Exhibit B-3 , evidencing indebtedness of the Borrower to such Delayed Draw Term
 

 
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Loan Lender resulting from Delayed Draw Term Loans owing to such Delayed Draw Term Loan Lender.
 
" Deposit Bank " means SG or any other financial institution reasonably acceptable to the Administrative Agent.
 
" Designated Cineplex " means a cineplex owned or operated by (a) Marcus Theatres Corporation or (b) any other Exhibitor mutually agreed between (i) the Borrower and (ii) prior to the Effective Date, the Bookrunners in their sole discretion and thereafter, the Administrative Agent in its sole discretion.
 
" Designated Installed Digital System " means any Installed Digital System installed, or to be installed, at a Designated Cineplex.
 
" Digital Cinema Deployment Agreement " means a digital cinema deployment agreement in form and substance reasonably acceptable to the Administrative Agent and related to the Phase 2 Rollout which agreement (a) is between (i) Parent Holdings or Parent Holdings and Cinedigm, with rights assigned to Holdings and then to the Borrower, in each case on terms and conditions and pursuant to documentation acceptable to the Administrative Agent and (ii) a Distributor and (b) defines the terms governing VPFs to be made by such Distributor.
 
" Digital System " means, collectively, (a) a DLP Cinema 2k or 4k projector, capable of both 2-D and 3-D display, (b) a digital cinema server and (c) a central storage server with management software and other such components required to meet, except as set forth on Schedule 4.20 , the DCI Technical Specification Version 1.2 issued March 7, 2008, by Digital Cinema Initiatives, LLC, all amendments issued on or prior to July 28, 2011, all errata issued on or prior to July 28, 2011, and the DCI Stereoscopic Digital Cinema Addendum Version 1.0 released July 11, 2007 and all errata issued and specifications formally approved and adopted by SMPTE technology committees on or prior to July 28, 2011, as well as any security-related SMPTE standards or specifications (e.g. DCP packaging and key authentication and delivery updates) which are formally approved and adopted by SMPTE technology committees after July 28, 2011 that require a software upgrade) or as required by the applicable Digital Cinema Deployment Agreement or such other similar systems as are acceptable to the Administrative Agent, in each case leased by Holdings from CHG pursuant to the CHG Lease Facility Documents or received by Holdings as Previously Deployed Systems pursuant to a Required Exhibitor Contribution.
 
" Digital Systems Report " means a report in form and substance reasonably satisfactory to the Administrative Agent as of any date setting forth (a) a list of all Installed Digital Systems as of such date and the locations and serial numbers of same and attaching copies of all installation certificates confirming the delivery, installation and operation of such Installed Digital Systems, (b) the total number of, and a list of, all screens being serviced by Installed Digital Systems as of such date, (c) a list which reflects the good faith, reasonable and fair projection of all Digital Systems to be deployed (or redeployed) for installment in the 90 day period following such date, if any, and (d) a report of the locations and status of operation of all other Digital Systems as of such date.
 

 
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" Digital Systems Servicer " means Barco, Inc., NEC Corporation of America and/or Ballantyne Strong, Inc. or any qualified successor supplier or provider of maintenance and other services with respect to Installed Digital Systems reasonably acceptable to the Administrative Agent.
 
" Disclosure Documents " means, collectively, (a) all confidential information memoranda and related written materials prepared by or on behalf of (and with the consent or at the direction of) a Loan Party or Cinedigm in connection with the syndication of the Loans and (b) all other documents filed by any Group Member, Holdings, Parent Holdings or Cinedigm with the United States Securities and Exchange Commission.
 
" Distributor " means (a) Sony Pictures Entertainment, Inc., (b) Warner Bros Pictures, Inc., (c) Walt Disney Company, (d) Paramount Pictures Corporation, (e) Universal Pictures, Inc., (f) Twentieth Century Fox Film Corp., (g) Lions Gate Entertainment or (h) another Person in the business of distributing theatrical feature films or other traditional or non-traditional motion picture content for exhibition in a theater reasonably acceptable to Administrative Agent.
 
" Distributor Lockbox Account " has the meaning set forth in the Multiparty Agreement.
 
" Distributor Lockbox Collateral Agency Agreement " means an agreement, in form and substance acceptable to the Administrative Agent, appointing a financial institution acceptable to the Administrative Agent, as collateral agent for the benefit of the parties entitled to receive payments from Parent Holdings, Cinedigm or any Affiliate thereof of amounts due from distributors under digital cinema deployment agreements related to the rollout by Cinedigm and its Subsidiaries of 10,000 digital systems via rollout vehicles (including the Phase 2 Rollout), and providing for the allocation of distribution of such amounts.
 
" Dollars " and the sign " $ " each mean the lawful money of the United States.
 
" Domestic Person " means any " United States person " under and as defined in Section 770l(a)(30) of the Code.
 
" E-Fax " means any system used to receive or transmit faxes electronically.
 
" E-Signature " means the process of attaching to or logically associating with an Electronic Transmission an electronic symbol, encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Electronic Transmission) with the intent to sign, authenticate or accept such Electronic Transmission.
 
" E-System " means any electronic system, including Intralinks ® and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent, any of its Related Persons or any other Person, providing for access to data protected by passcodes or another reasonably adequate security system.
 
" Effective Date " means the date on which the conditions specified in Section 3.1 are satisfied (or waived in accordance with Section 11.1 ).
 

 
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" Electronic Transmission " means each document, instruction, authorization, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or other equivalent service.
 
" Eligible Assignee " means any commercial bank, institutional investor or other financial institution organized under the laws of the United States or any of the countries parties to the Organization for Economic Cooperation and Development or any political subdivision of any thereof, other than (a) Cinedigm, (b) any Affiliate of Cinedigm, (c) any holder of Stock or Stock Equivalents of Cinedigm or any Affiliate of Cinedigm which Stock constitutes (or, in the case of Stock Equivalents, would constitute if exercised) 5% or more of the Voting Stock of Cinedigm or such Affiliate, (d) CHG, or (e) any Affiliate of CHG.
 
" Environmental Laws " means all Requirements of Law and Permits imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the environment and natural resources or hazardous material, transportation, reuse, recycling, potential resale or disposal of the Digital Systems, including CERCLA, the SWDA, the Hazardous Materials Transportation Act (49 U.S.C. §§ 5101 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), Basel Convention on the control of Transboundary Movements of Hazardous Wastes and their Disposal (BASEL); the Waste Electrical and Electronic Equipment (WEEE), Directive 2002/96/EC of the European Parliament and the Council of 27 January 2003; and any other similar federal, state or local laws relating to the environment, the transportation, disposal, reuse or recycling of the Digital Systems, all regulations promulgated under any of the foregoing, all analogous Requirements of Law and Permits and any environmental transfer of ownership notification or approval statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann. §§ 13:1K-6 et seq.).
 
" Environmental Liabilities " means all Liabilities (including costs of Remedial Actions, natural resource damages and costs and expenses of investigation and feasibility studies) that may be imposed on, incurred by or asserted against Holdings or any Group Member as a result of, or related to, any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any Environmental Law or in connection with any environmental, health or safety condition or with any Release and (a) arising out of the use, transportation, sale, recycling or disposal of the Digital Systems or (b) resulting from the ownership, lease, sublease or other operation or occupation of property by Holdings or any Group Member, whether on, prior or after the date hereof.
 
" Equipment Purchase Account " has the meaning set forth in the Multiparty Agreement.
 
" ERISA " means the United States Employee Retirement Income Security Act of 1974.
 

 
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" ERISA Affiliate " means, collectively, any Group Member, and any Person under common control, or treated as a single employer, with any Group Member, within the meaning of Section 414(b), (c), (m) or (o) of the Code.
 
" ERISA Event " means any of the following: (a) a reportable event described in Section 4043 of ERISA (other than those events with respect to which the 30-day notice requirement has been duly waived under the applicable regulations) with respect to a Title IV Plan, (b) the withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA, (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan, (d) with respect to any Multiemployer Plan, the filing of a notice of reorganization, insolvency or termination (or treatment of a plan amendment as termination) under Section 4041A of ERISA, (e) the filing of a notice of intent to terminate a Title IV Plan (or treatment of a plan amendment as termination) under Section 4041(c) of ERISA, (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC, (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due, (h) the imposition of a lien under Section 430 of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate, (i) the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law to qualify thereunder and (j) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for a distress or involuntary termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC premiums due but not delinquent.
 
" Eurodollar Base Rate " means, with respect to any Interest Period for any Eurodollar Rate Loan, the greater of (a) the offered rate per annum for deposits of Dollars for such Interest Period that appears on Reuters Screen LIBOR01 Page as of 11:00 A.M. (London, England time) two (2) Business Days prior to the first day of such Interest Period and (b) 1.25%.  If no such offered rate exists, such rate will be the rate of interest per annum as determined by the Administrative Agent (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits of Dollars in immediately available funds are offered at 11:00 A.M. (London, England time) two (2) Business Days prior to the first day such Interest Period by major financial institutions reasonably satisfactory to the Administrative Agent in the London interbank market for such Interest Period and for an amount equal or comparable to the principal amount of the Loans borrowed, converted or continued as Eurodollar Rate loans on such date of determination.
 
" Eurodollar Rate " means, with respect to any Interest Period and for any Eurodollar Rate Loan, an interest rate per annum determined as the ratio of (a) the Eurodollar Base Rate with respect to such Interest Period for such Eurodollar Rate Loan to (b) the difference between the number one and the Eurodollar Reserve Requirements with respect to such Interest Period and for such Eurodollar Rate Loan.
 
" Eurodollar Rate Loan " means any Loan that bears interest based on the Eurodollar Rate.
 
" Eurodollar Reserve Requirements " means, with respect to any Interest Period and for any Eurodollar Rate Loan, a rate per annum equal to the aggregate, without duplication, of the
 

 
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maximum rates (expressed as a decimal number) of reserve requirements in effect 2 Business Days prior to the first day of such Interest Period (including basic, supplemental, marginal and emergency reserves) under any regulations of the Federal Reserve Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as "eurocurrency liabilities" in Regulation D of the Federal Reserve Board) maintained by a member bank of the United States Federal Reserve System; provided , that if no Lender is a member bank at the time of determination, the Eurodollar Reserve Requirement shall be deemed to be zero.
 
" Event of Default " has the meaning specified in Section 9.1 .
 
" Excess Cash Flow " has the meaning set forth in the Multiparty Agreement.
 
" Exhibitor " means (a) an operator of cinema complexes operating Installed Digital Systems as of the Effective Date and (b) each operator subsequently approved by Cinedigm in accordance with its underwriting criteria in effect as of the Effective Date (or as updated in a manner acceptable to the Administrative Agent).
 
" Exhibitor Agreement " means each master license agreement between Holdings and an Approved Exhibitor with a minimum 10-year term and otherwise in substantially the same form as Exhibit G (or with such modifications thereto as are acceptable to the Administrative Agent or, in the case of modifications to the definitions of "Existing Cineplexes" and "New Build Cineplexes" and fees payable by the Approved Exhibitor, as are acceptable to the Administrative Agent in its sole discretion) providing for the placement of Digital Systems in such Approved Exhibitor's theaters and contributed by Holdings to the Borrower on terms and conditions and pursuant to documentation acceptable to the Administrative Agent.
 
" Exhibitor Approval Schedule " means, with respect each Exhibitor, a schedule in form and substance satisfactory to the Administrative Agent and, in any case, including (a) its legal name and any dba names under which it conducts business with Holdings or the Borrower, (b) the name and location of its cinema complexes included or to be included in the Phase 2 Rollout, (c) the number of screens per each such cinema complex, identifying any IMAX or similar screens that will not be converted, (d) the number of Previously Deployed Systems operated in each such cinema complex, including the Fully Installed Purchase Price for each system (depreciated cost, plus upgrade costs and Installation Management Fee), (e) its booking commitment, including whether by circuit or complex, (f) the amount of its Required Exhibitor Contributions per each such cinema complex, (g) the amount of Required Vendor Mezzanine Debt per each such cinema complex, (h) the amount of CHG Lease Advance per each such cinema complex, (i) the approved senior debt per each such cinema complex , and (j) such other items reasonably requested by the Administrative Agent.
 
" Exhibitor Payment " means any payment, other than any Required Exhibitor Contributions, due and payable to Holdings or the Borrower (as assignee of Holdings) under an Exhibitor Agreement whether with respect to Non-Participating Distributors, for exhibition of alternative content, for usage of systems to display advertising, for minimum screen turnover payments or for any other use of Installed Digital Systems generating a payment obligation for which payment has not been received by Holdings or the Borrower from another agreed source.
 

 
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" Facilities " means, collectively, the Revolving Loan Facility and the Term Loan Facilities.
 
" FATCA " means Sections 1471 through 1474 of the Code as of the date of this Agreement and any current or future United States Treasury Regulations promulgated under the Code or other published guidance with respect thereto.
 
" Federal Funds Rate " means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as determined by the Administrative Agent in its sole discretion.
 
" Federal Reserve Board " means the Board of Governors of the United States Federal Reserve System and any successor thereto.
 
" Fee Letter " means the letter agreement dated June 23, 2011 among Cinedigm, Holdings, the Administrative Agent and certain other parties, as amended prior to the Effective Date.
 
" Financial Statement " means the Initial Financial Statements and each financial statement delivered pursuant to Sections 6.1(a) , (b) or (c) .
 
" Fiscal Quarter " means each three (3) month fiscal period ending on March 31, June 30, September 30 or December 31.
 
" Fiscal Year " means each twelve month period ending on March 31.
 
" Foreign Subsidiary " means any Subsidiary that is not a Domestic Person.
 
" Fully Installed Purchase Price " means, for any Installed Digital System, the total cost of equipment purchase, shipping, taxes (including amounts paid into the Use Tax Account pursuant to the Multiparty Agreement), installation (including Installation Management Fees) and acceptance.
 
" Funding Date " means, as applicable, (a) the date (including the Initial Funding Date) on which any Loans hereunder are funded by the Lenders and (b) the date on which funds in the DDTL Escrow Account are released by the Administrative Agent to the Borrower.  The funding of any DDTL Termination Date Funding by the Delayed Draw Term Loan Lenders to the DDTL Escrow Account in accordance with Section 2.1(b) shall not constitute a "Funding Date".
 
" GAAP " means generally accepted accounting principles in the United States, as in effect from time to time, set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards Board and in such other statements by such other Person as may be in general use by significant segments of the accounting profession in the United States that are applicable to the circumstances as of the date of determination.  Subject to Section 1.3 , all references to " GAAP " shall be to GAAP applied consistently with the principles used in the preparation of the Initial Financial Statements referred to in clause (b) of the definition of Initial Financial Statements.
 

 
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" Governmental Authority " means any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).
 
" Group Members " means, collectively, the Loan Parties (other than Parent Holdings and Holdings).
 
" Group Members' Accountants " means Eisner LLP or any nationally-recognized independent registered certified public accountants reasonably acceptable to the Administrative Agent.
 
" Guarantor " means each Subsidiary of the Borrower and each other Person that enters into any Guaranty Obligation with respect to any Secured Obligation of any Loan Party.
 
" Guaranty and Security Agreement " means a guaranty and security agreement, in substantially the form of Exhibit F-1 , among the Collateral Agent, the Borrower and other Guarantors from time to time party thereto.
 
" Guaranty Obligation " means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person for any Indebtedness, lease, dividend or other obligation (the " primary obligation ") of another Person (the " primary obligor "), if the purpose or intent of such Person in incurring such liability, or the economic effect thereof, is to guarantee such primary obligation or provide support, assurance or comfort to the holder of such primary obligation or to protect or indemnify such holder against loss with respect to such primary obligation, including (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of any primary obligation, (b) the incurrence of reimbursement obligations with respect to any letter of credit or bank guarantee in support of any primary obligation, (c) the existence of any Lien, or any right, contingent or otherwise, to receive a Lien, on the property of such Person securing any part of any primary obligation and (d) any liability of such Person for a primary obligation through any Contractual Obligation (contingent or otherwise) or other arrangement (i) to purchase, repurchase or otherwise acquire such primary obligation or any security therefor or to provide funds for the payment or discharge of such primary obligation (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (ii) to maintain the solvency, working capital, equity capital or any balance sheet item, level of income or cash flow, liquidity or financial condition of any primary obligor, (iii) to make take-or-pay or similar payments, if required, regardless of non-performance by any other party to any Contractual Obligation, (iv) to purchase, sell or lease (as lessor or lessee) any property, or to purchase or sell services, primarily for the purpose of enabling the primary obligor to satisfy such primary obligation or to protect the holder of such primary obligation against loss or (v) to supply funds to or in any other manner invest in, such primary obligor (including to pay for property or services irrespective of whether such property is received or such services are rendered); provided that, " Guaranty Obligations " shall not include (x)
 

 
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endorsements for collection or deposit in the ordinary course of business and (y) product warranties given in the ordinary course of business. The outstanding amount of any Guaranty Obligation shall equal the outstanding amount of the primary obligation so guaranteed or otherwise supported or, if lower, the stated maximum amount for which such Person may be liable under such Guaranty Obligation.
 
" Hazardous Material " means (a) any substance, material or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including petroleum or any fraction thereof, asbestos, polychlorinated biphenyls and radioactive substances or (b) electronic waste and parts or materials derived from the Digital Systems destined for recycling or disposal but not for direct reuse that consists of lead or beryllium containing circuit boards, cathode ray tubes (CRTs), CRT glass (processed and unprocessed), as well as computers, monitors, peripherals and other electronics containing such circuit boards and/or CRTs.
 
" Hedging Agreement " means any Interest Rate Contract, foreign exchange, swap, option or forward contract, spot, cap, floor or collar transaction, any other derivative instrument and any other similar transaction and any other similar agreement or arrangement designed to provide protection against fluctuations in any interest rate.
 
" Holdings " means CDF2 Holdings, LLC, a Delaware limited liability company.
 
" Holdings Operating Account " has the meaning set forth in the Multiparty Agreement.
 
" Holdings Security Agreement " means a security agreement, in substantially the form of Exhibit F-2 , between the Collateral Agent and Holdings.
 
" Incentive Servicing Fee " has the meaning set forth in the Management Services Agreement.
 
" Indebtedness " of any Person means, without duplication, any of the following, whether or not matured:  (a) all indebtedness for borrowed money, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all reimbursement and other obligations with respect to (i) letters of credit (whether drawn or undrawn), bank guarantees or bankers' acceptances or (ii) surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation) other than those entered into in the ordinary course of business, (d) all obligations to pay the deferred purchase price of property or services, other than trade payables incurred in the ordinary course of business, (e) all obligations created or arising under any conditional sale or other title retention agreement, regardless of whether the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property, (f) all Capitalized Lease Obligations, (g) all obligations, whether or not contingent, to purchase, redeem, retire, defease or otherwise acquire for value any of its own Stock or Stock Equivalents (or any Stock or Stock Equivalent of a direct or indirect parent entity thereof) prior to the date that is 180 days after the Maturity Date, valued at, in the case of redeemable preferred Stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such Stock plus accrued and unpaid dividends, (h) all payments that would be required to be made in respect of any Hedging Agreement in the event
 

 
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of a termination (including an early termination) on the date of determination and (i) all Guaranty Obligations for obligations of any other Person constituting Indebtedness of such other Person; provided , however , that the items in each of clauses (a) through (i) above shall constitute " Indebtedness " of such Person solely to the extent, directly or indirectly, (x) such Person is liable for any part of any such item, (y) any such item is secured by a Lien on such Person's property or (z) any other Person has a right, contingent or otherwise, to cause such Person to become liable for any part of any such item or to grant such a Lien.
 
" Indemnified Matters " has the meaning specified in Section 11.4 .
 
" Indemnitee " has the meaning specified in Section 11.4 .
 
" Initial Advance Term Loan " has the meaning assigned to such term in Section 2.1(a) .
 
" Initial Advance Term Loan Commitments " means, for any Initial Advance Term Loan Lender, the amount set opposite such Initial Advance Term Loan Lender's name on Schedule I as its Initial Advance Term Loan Commitment, as such amount may be reduced or terminated pursuant to Section 2.3 or Article IX or otherwise under this Agreement.  The initial amount of the aggregate Initial Advance Term Loan Commitments is $25,000,000.
 
" Initial Advance Term Loan Facility " means, at any time, the aggregate Initial Advance Term Loans of all Initial Advance Term Loan Lenders at such time.
 
" Initial Advance Term Loan Lenders " means, at any time, any Lender that (a) as of the Effective Date, has an Initial Advance Term Loan Commitment or (b) on and after the Effective Date, holds an Initial Advance Term Loan at such time.
 
" Initial Advance Term Loan Note " means a promissory note of the Borrower payable to the order of any Initial Advance Term Loan Lender in an amount not to exceed the Initial Advance Term Loan Commitment of such Initial Advance Term Loan Lender, in substantially the form of the attached Exhibit B-2 , evidencing indebtedness of the Borrower to such Initial Advance Term Loan Lender resulting from Initial Advance Term Loans owing to Initial Advance Term Loan Lender.
 
" Initial Financial Statements " means (a) the unaudited Consolidated balance sheet of Holdings and its Subsidiaries as of the Effective Date prepared on a pro forma basis after giving effect to the initial amount of the Required Vendor Mezzanine Loans and Required Exhibitor Contributions and the related consolidated statements of income, retained earnings and cash flows of Holdings and its Subsidiaries, (b) the audited Consolidated balance sheet of Cinedigm and its Subsidiaries as at March 31, 2011 and the related audited Consolidated and consolidating statements of income, cash flow, and retained earnings of Cinedigm and its Subsidiaries for the Fiscal Year then ended and (c) when delivered, the pro forma Consolidated financial statements of Holdings delivered pursuant to Section 6.8 .
 
" Initial Funding Date " means the Funding Date on which the Initial Advance Term Loan and, if applicable, the initial Revolving Loans are funded under this Agreement.
 

 
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" Initial Projections " means a financial forecast for the Group Members prepared by or on behalf of Parent Holdings' management and dated on or around the Effective Date (and otherwise in form and substance satisfactory to the Administrative Agent) demonstrating on a quarterly basis for the first twelve months after the Effective Date, and on an annual basis thereafter through the Maturity Date, compliance with all financial covenants through the one year anniversary of the Maturity Date.
 
" In-Service Date " means, for each Installed Digital System, the date on which such Installed Digital System earns its first VPF payment (whether or not collected).
 
" Installation Management Fee " means a $2,000 per screen installation management fee payable to the Administrative Servicer, not less than $1,000 per screen of which will be paid to Cinedigm by Holdings through the issuance of subordinated notes on the same terms as the Required Vendor Mezzanine Loans as and when earned and which notes may be paid to Cinedigm only after payment in full in cash of the Facilities, including any permitted refinancing thereof, pro rata with the Required Vendor Mezzanine Loans, and the remainder of which shall be retained by the Borrower and/or Holdings as needed for working capital through the end of the Availability Period.
 
" Installed Digital Systems " means installed and fully operational Digital Systems subject to an Exhibitor Agreement and a Service Agreement and in respect of which Holdings has delivered a Certificate of Acceptance.  For purposes hereof, Digital Systems subject to arrangements with an Approved Exhibitor party to an Exhibitor Agreement permitting such Approved Exhibitor to use its internal service technicians to perform installation and maintenance on such Digital Systems shall be deemed to be subject to a Service Agreement for purposes of this definition provided that (a) such internal service technicians are determined by Holdings in good faith to be qualified to perform such services and (b) such Exhibitor Agreement shall (i) detail the material terms and conditions of such arrangements, (ii) permit Holdings to engage a Digital Systems Servicer at such Approved Exhibitor's expense to restore systems in the event of a failure of the Digital Systems serviced by such internal service technicians that is not remedied within 48 hours and (iii) permit Holdings to require the execution of a Service Agreement with a Digital Systems Servicer within 90 days in the event that the Digital Systems serviced by such internal service technicians experience failure at a materially higher rate than Digital Systems maintained with such Approved Exhibitor pursuant to Service Agreements with Digital Systems Servicers, in each case on terms reasonably acceptable to the Administrative Agent.
 
" Intellectual Property " means all rights, title and interests in or relating to intellectual property and industrial property arising under any Requirement of Law and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Trademarks, Internet Domain Names, Trade Secrets and IP Licenses.
 
" Intercompany Agreements " means all agreements among the Borrower, Parent Holdings, Holdings, Hollywood Software, Inc. and/or Cinedigm or any of its Subsidiaries.
 

 
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" Interest Payment Date " means (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan; and (b) as to any Base Rate Loan, the Payment Date occurring in each March, June, September and December.
 
" Interest Period " means, with respect to any Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is made or converted to a Eurodollar Rate Loan or, if such loan is continued, on the last day of the immediately preceding Interest Period therefor and, in each case, ending 1, 2 or 3 months thereafter, as selected by the Borrower pursuant hereto; provided , however , that (v) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless the result of such extension would be to extend such Interest Period into the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day, (w) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month, (x) the Borrower may not select any Interest Period for Eurodollar Rate Loans ending after the Maturity Date, (y) the Borrower may not select any Interest Period in respect of Term Loans having an aggregate principal amount of less than $1,000,000 and (z) there shall be outstanding at any one time no more than six (6) Interest Periods for Eurodollar Rate Loans.
 
" Interest Rate Contracts " means any interest rate swap agreement, interest rate cap agreement, agreement for the repurchase of the imbedded Eurodollar floor, interest rate collar agreement and interest rate insurance entered into with a Secured Hedging Counterparty or otherwise acceptable to the Administrative Agent that protects against increases in the Eurodollar Rate or the Base Rate, as the case may be, as such rates would reasonably impact the Term Loans.
 
" Internet Domain Names " means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to Internet domain names.
 
" Investment " means, with respect to any Person, directly or indirectly, (a) the ownership, purchase or other acquisition, in each case whether beneficially or otherwise, of any investment in, including any interest in, any Security of any other Person (other than any evidence of any Obligation), (b) the purchase or other acquisition, whether in one transaction or in a series of transactions, of all or a significant part of the property of any other Person or a business conducted by any other Person or all or substantially all of the assets constituting the business of a division, branch, brand or other unit operation of any other Person, (c) to incur, or to remain liable under, any Guaranty Obligation for Indebtedness of any other Person, to assume the Indebtedness of any other Person or to make, hold, purchase or otherwise acquire, in each case directly or indirectly, any deposit, loan, advance, commitment to lend or advance, or other extension of credit (including by deferring or extending the date of, in each case outside the ordinary course of business, the payment of the purchase price for Sales of property or services to any other Person, to the extent such payment obligation constitutes Indebtedness of such other Person), excluding deposits with financial institutions available for withdrawal on demand and prepaid expenses, accounts receivable and similar items created in the ordinary course of business, (d) to make, directly or indirectly, any contribution to the capital of any other Person or (e) to Sell any property for less than fair market value (including a disposition of cash or Cash
 

 
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Equivalents in exchange for consideration of lesser value); provided , however , that such Investment shall be valued at the difference between the value of the consideration for such Sale and the fair market value of the property Sold.
 
" IP Ancillary Rights " means, with respect to any other Intellectual Property, as applicable, all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and Liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right.
 
" IP Escrow Agreement " means the Custom Master Beneficiary Escrow Service Agreement dated effective as of October 18, 2011 among the Collateral Agent for the benefit of the Lenders and SG as collateral agent for CHG and the other CHG Lease Participations, as beneficiaries, Access Digital Media, Inc., Holdings and Hollywood Software, Inc., as depositors, and Iron Mountain Intellectual Property Management, Inc.
 
" IP License " means all Contractual Obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and interest in or relating to any Intellectual Property.
 
" IRS " means the Internal Revenue Service of the United States and any successor thereto.
 
" Lender " means any Revolving Loan Lender or Term Loan Lender.
 
" Lender Insolvency Event " means that (a) a Lender or its Lender Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (b) such Lender or its Lender Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender or its Lender Parent Company, or such Lender or its Lender Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment.
 
" Lender Parent Company " means, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.
 
" Liabilities " means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, taxes, commissions, charges, disbursements and expenses, in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.
 

 
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" Lien " means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest or other security arrangement and any other preference, priority or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.
 
" Loan " means a Revolving Loan or a Term Loan.
 
" Loan Documents " means, collectively, this Agreement, any Notes, the Guaranty and Security Agreement, the Holdings Security Agreement, the Distributor Lockbox Collateral Agency Agreement, the Pledge Agreements, the Mortgages, the Control Agreements, the Consents, the Multiparty Agreement, the Fee Letter, the IP Escrow Agreement and, when executed, each document executed by a Loan Party and delivered to the Administrative Agent, the Collateral Agent, any Bookrunner, any Arranger, or any Lender in connection with or pursuant to any of the foregoing or the Obligations (other than any Secured Hedging Document), together with any permitted modification of any term of, or any permitted waiver with respect to, any of the foregoing.  For avoidance of doubt, other than the Multiparty Agreement, no CHG Lease Facility Document or CDF2 Loan Document shall be deemed to be a "Loan Document" for purposes of this Agreement or otherwise.
 
" Loan Party " means Parent Holdings, Holdings, the Borrower and each Guarantor.
 
" Management Report " means the management report delivered pursuant to Section 6.1(a) .
 
" Management Services Agreement " means that certain Management Services Agreement dated as of October 18, 2011 among the Administrative Servicer, the Borrower and Holdings in form and substance satisfactory to the Administrative Agent and under which the Administrative Servicer has agreed to provide certain management services and accounting, technical, operational, general and administrative services for Holdings and the Borrower and any replacement agreements thereof in form and substance satisfactory to the Administrative Agent entered into in order to cure a Default under Section 9.1(k) of the Credit Agreement.
 
" Material Adverse Effect " means an effect that results in or causes, or could reasonably be expected to result in or cause, a material adverse change in any of (a) the condition (financial or otherwise), business, performance, prospects (in the reasonable judgment of the Administrative Agent), operations or property of Parent Holdings and its Subsidiaries, taken as a whole, (b) the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party, (c) the ability of Holdings to perform its obligations under the CHG Lease Facility Documents, and (d) the validity or enforceability of any Loan Document or the rights and remedies of any Agent, the Lenders or any other Secured Party under any Loan Document.
 
" Material Digital Cinema Deployment Agreement " means a Digital Cinema Deployment Agreement (a) with a Distributor listed on Schedule 9.1(i) or (b) for which the VPFs paid or, without duplication, payable by the Distributor party thereto to the Group Members during the twelve month period most recently ended equal or exceed 10.00% (on a dollar received basis) of
 

 
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all VPFs paid or, without duplication, payable by all Distributors parties to Digital Cinema Deployment Agreements to the Group Members during such period.
 
" Material Environmental Liabilities " means Environmental Liabilities exceeding $250,000 in the aggregate.
 
" Material Exhibitor Agreement " means (a) any Exhibitor Agreement providing for the deployment of more than 175 Installed Digital Systems to an Approved Exhibitor or (ii) Exhibitor Agreements that in the aggregate provide for the deployment of more than 175 Installed Digital Systems to one or more Approved Exhibitors.
 
" Maturity Date " means October 15, 2017.
 
" Moody's " means Moody's Investors Service, Inc.
 
" Monthly Application Date " means the 10th   day of each February, March, May, June, August, September, November and December of each calendar year, or if that day is not a Business Day, the next Business Day thereafter.
 
" Mortgage " means any mortgage, deed of trust or other document executed or required herein to be executed by any Loan Party and granting a security interest over real property in favor of the Collateral Agent as security for the Secured Obligations.
 
" Mortgage Supporting Documents " means, with respect to any Mortgage for a parcel of real property, each document (including title policies or marked-up unconditional insurance binders (in each case, together with copies of all documents referred to therein), maps, ALTA (or TLTA, if applicable) as-built surveys (in form and as to date that is sufficiently acceptable to the title insurer issuing title insurance to the Collateral Agent for such title insurer to deliver endorsements to such title insurance as reasonably requested by the Collateral Agent), environmental assessments and reports and evidence regarding recording and payment of fees, insurance premium and taxes) that the Collateral Agent may reasonably request, to create, register, perfect, maintain, evidence the existence, substance, form or validity of or enforce a valid lien on such parcel of real property in favor of the Collateral Agent for the benefit of the Secured Parties, subject only to Permitted Liens.
 
" Multiemployer Plan " means any multiemployer plan, as defined in Section 400l(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.
 
" Multiparty Agreement " means the Multiparty Agreement dated as of October 18, 2011 among the Administrative Agent, the Collateral Agent, CHG, each Approved Vendor, Cinedigm, Parent Holdings, Holdings and the Borrower.
 
" Natixis " means Natixis, New York Branch.
 
" Net Cash Proceeds " means proceeds received in cash from (a) any Sale of, or Property Loss Event with respect to, property, any casualty insurance or any business interruption insurance, net of (i) the customary out-of-pocket cash costs, fees and expenses paid or required
 

 
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to be paid in connection therewith, (ii) taxes paid or reasonably estimated to be payable as a result thereof and (iii) any amount required to be paid or prepaid on Indebtedness (other than the Obligations and Indebtedness owing to any Loan Party) secured by the property or (b) any sale or issuance of Stock or incurrence of Indebtedness, in each case net of brokers', advisors' and investment banking fees and other customary out-of-pocket underwriting discounts, commissions and other customary out-of-pocket cash costs, fees and expenses, in each case incurred in connection with such transaction; provided that any such proceeds received by any Subsidiary of the Borrower that is not a Wholly Owned Subsidiary of the Borrower shall constitute " Net Cash Proceeds " only to the extent of the aggregate direct and indirect beneficial ownership interest of the Borrower therein.
 
" New Build Cineplexes " has the meaning set forth in the Digital Cinema Deployment Agreements.
 
" Non-Defaulting Lender " means, at any time, a Lender that is not a Defaulting Lender.
 
" Non-U.S. Lender Party " means each of the Agents, each Lender, each SPV and each participant, in each case that is not a Domestic Person.
 
" Non-Participating Distributor " means any Distributor that has not signed a Digital Cinema Deployment Agreement.
 
" Note " means a Revolving Loan Note, an Initial Advance Term Loan Note or a Delayed Draw Term Loan Note, as applicable.
 
" Notice of Borrowing " has the meaning specified in Section 2.2 .
 
" Notice of Conversion or Continuation " has the meaning specified in Section 2.7 .
 
" Obligations " means, with respect to any Loan Party, (a) all amounts, obligations, liabilities, covenants and duties of every type and description owing by such Loan Party to the Agents, any Arranger, any Bookrunner, any Lender, any other Indemnitee, any participant or any SPV, in each case arising out of, under, or in connection with, any Loan Document, whether direct or indirect (regardless of whether acquired by assignment), absolute or contingent, due or to become due, whether liquidated or not, now existing or hereafter arising and however acquired, and whether or not evidenced by any instrument or for the payment of money, including, without duplication or limitation, (i) if such Loan Party is the Borrower, all Loans, (ii) all interest, whether or not accruing after the filing of any petition in bankruptcy or after the commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding, and (iii) all other fees, expenses (including fees, charges and disbursement of counsel), interest, commissions, charges, costs, disbursements, indemnities and reimbursement of amounts paid and other sums chargeable to such Loan Party under any Loan Document, and (b) all Secured Hedging Obligations undertaken in accordance with Section 7.12 hereof owing to a Secured Hedging Counterparty.  For avoidance of doubt, obligations owing to SG under the SG Advisory Fee Note shall be deemed to be "Obligations " for purposes of this Agreement or otherwise.
 
" Other Taxes " has the meaning specified in Section 2.14(c) .
 

 
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" Parent Holdings " means Access Digital Cinema Phase 2, Corp., a Delaware corporation.
 
" Patents " means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to letters patent and applications therefor.
 
" Payment Date " means the 15th day of each calendar month, or if such day is not a Business Day, the immediately succeeding Business Day.
 
" PBGC " means the United States Pension Benefit Guaranty Corporation and any successor thereto.
 
" Permit " means, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
 
" Permitted Back-Up Services Expenses " means, as of the end of the most recent fiscal month, Back-Up Services Expenses in an amount (if positive and without duplication) up to a maximum disbursement for any trailing twelve-month period equal to (a) the maximum amount of Permitted Operating Expenses permitted to be paid or reimbursed after the Availability Period pursuant to Section 4.4(a) or 4.5(a) of the Multiparty Agreement during the twelve month period most recently ended (subject to a maximum disbursement of (i) for the Fiscal Year ending March 31, 2013, the product of (x) $200,000 and (y) a ratio, the numerator of which is the number of days elapsed since the end of the Availability Period and the denominator of which is 365, (ii) for the Fiscal Year ending March 31, 2014, $206,000 (as increased in each Fiscal Year pursuant to clause (iii) below, the " Opex Base Amount ") and (iii) for each Fiscal Year thereafter, 103% of the Opex Base Amount for the immediately preceding Fiscal Year, in each case as reduced by any amounts applied to the payment of property taxes pursuant to the following clause (b) for the applicable Fiscal Year) plus (b) Permitted Property Tax Expenses during the twelve month period most recently ended, minus (c) Permitted Operating Expenses actually paid or reimbursed pursuant to Section 4.4(a) or 4.5(a) of the Multiparty Agreement during the twelve month period most recently ended, minus (d) Permitted Property Tax Expenses actually paid or reimbursed pursuant to Section 4.4(a) or 4.5(a) of the Multiparty Agreement during the twelve month period most recently ended minus (e) Permitted Back-Up Services Expenses actually paid or reimbursed pursuant to Section 4.4(a)(D) or 4.5(a)(D) of the Multiparty Agreement during the twelve month period most recently ended.  Calculations of Permitted Back-Up Services Expenses made for any twelve month period ending on or prior to October 31, 2012 shall be annualized for the number of months elapsed in a manner satisfactory to the Administrative Agent.
 
" Permitted Investment " means any Investment of any Group Member that is permitted by Section 8.3 .
 
" Permitted Lien " means any Lien on or with respect to the property of any Group Member that is permitted by Section 8.2 .
 
" Permitted Operating Expenses " means, with respect to the Borrower and its Subsidiaries and Holdings, (a) all legal and accounting expenses (but not any audit fees, audit expenses and
 

 
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related indemnities incurred under the Exhibitor Agreements other than fees and expenses arising from permitted audits of Exhibitors undertaken with the prior consent of the Specified Senior Agent (as defined in the Multiparty Agreement), (b) all expenses relating to business interruption and general liability insurance policies and (c) expenses under this Agreement and the other Loan Documents payable to the Administrative Agent and under the CHG Lease Facility Documents payable to CHG, in each case, to the extent not otherwise provided for in Section 4.4 or 4.5 of the Multiparty Agreement (including all payments due and payable to the escrow agent under the IP Escrow Agreement).
 
" Permitted Property Tax Expenses " means, as of the end of the most recent fiscal month, property taxes with respect to Installed Digital Systems, subject to a maximum disbursement of (a) for any Fiscal Year ending on or before March 31, 2014, the product of (i) $170 (as increased in each Fiscal Year pursuant to clause (b) below, the " Property Tax Base Amount ") and (ii) the number of Installed Digital Systems and (b) for each Fiscal Year thereafter, the product of (i) 103% of the Property Tax Base Amount for the immediately preceding Fiscal Year and (ii) the number of Installed Digital Systems.
 
" Permitted Refinancing " means, with respect to any Indebtedness, Indebtedness constituting a refinancing or extension of such Indebtedness that (a) has an aggregate outstanding principal amount not greater than the aggregate principal amount of such refinanced or extended Indebtedness outstanding at the time of such refinancing or extension, (b) has a weighted average maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of such refinanced or extended Indebtedness, (c) is not entered into as part of a Sale and Leaseback transaction,   (d) is not secured by any property or any Lien other than those securing such refinanced or extended Indebtedness, if any, and (e) is otherwise on terms no less favorable to the Group Members, taken as a whole, than those of such refinanced or extended Indebtedness; provided that, notwithstanding the foregoing, no Guaranty Obligation for such Indebtedness shall constitute part of such Permitted Refinancing unless similar Guaranty Obligations with respect to such refinanced or extended Indebtedness existed and constituted permitted Indebtedness pursuant to Section 8.1 prior to such refinancing or extension.
 
" Permitted Reinvestment " means, with respect to the Net Cash Proceeds of any Sale of property (other than Sales of its own Stock, Sales of property permitted under clauses (a), (b), (c)(i) and (d) of Section 8.4 , and Sales of Digital Systems by Holdings pursuant to the CHG Sale Leaseback and the Exhibitor Agreements) or Property Loss Event (including Net Cash Proceeds constituting insurance proceeds from any casualty or business interruption insurance policy of Holdings or any Group Member), to acquire (or make Capital Expenditures to finance the acquisition, repair, improvement or construction of), to the extent otherwise permitted hereunder, property substantially similar to the property subject to such Sale or Property Loss Event or, if such Property Loss Event involves loss or damage to property, to repair such loss or damage, with such replaced/repaired property, if the Sold/damaged property constituted Installed Digital Systems, to be subject in each case to Digital Cinema Deployment Agreements, Exhibitor Agreements, the Management Services Agreement, Service Agreements and Supply Agreements in each case substantially similar to those applicable to the replaced/repaired property.
 
" Person " means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust,
 

 
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limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority.
 
" Phase 2 Rollout " means the rollout by Cinedigm or its Subsidiaries of up to 2,300 Digital Systems financed hereunder during the Availability Period.
 
" Pipeline Report " means a report in form and substance reasonably acceptable to the Administrative Agent setting forth in reasonable detail for Holdings and the Group Members the estimated number of Digital Systems financed hereunder that are to be installed during the Phase 2 Rollout through the end of the Availability Period.
 
" Pledge Agreements " means (a) the Pledge Agreement dated as of the date hereof between Holdings and the Collateral Agent and (b) the Pledge Agreement dated as of the date hereof between Parent Holdings and the Collateral Agent.
 
" Previously Deployed Systems " means Digital Systems owned by an Exhibitor prior to execution of its Exhibitor Agreement, which (a) are conveyed by such Exhibitor to Holdings pursuant to the Phase 2 Rollout and (b) are valued for purposes of this Agreement at the lesser of (i) depreciated book cost and (ii) an average of $60,000 per such Digital System, less Holdings' estimated costs to install, move or upgrade such Digital System.
 
" Projections " means, collectively, the Initial Projections and any additional forecasts delivered pursuant to Section 6.1(f) .
 
" Property Loss Event " means, with respect to any property of Holdings or any Group Member, any loss of or damage to such property or any taking of such property or condemnation thereof.
 
" Pro Rata Outstandings " of any Lender at any time means (a) the outstanding principal amount of the Loans owing to such Lender and (b) the unused Commitments (including any amounts on deposit in the DDTL Escrow Account) of such Lender.
 
" Pro Rata Share " means (a) with respect to any Lender and the making of any Borrowing or the DDTL Termination Date Funding at any time, a fraction, the numerator of which is the amount of the Commitments of such Lender under the applicable Facility at such time and the denominator of which is the aggregate amount of all Lenders' Commitments under such Facility at such time (provided that in the case of a Borrowing constituting a release of funds from the DDTL Escrow Account at any time, the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender under the Delayed Draw Term Loan Facility immediately prior to the termination of such Lender's Delayed Draw Term Loan Commitment on the DDTL Termination Date, giving effect to any subsequent assignments), and (b) with respect to any Lender and any other provision of this Agreement or any other Loan Document at any time, a fraction, the numerator of which is the amount of such Lender's Pro Rata Outstandings under the applicable Facility or Facilities at such time and the denominator of which is the aggregate amount of all Lenders' Pro Rata Outstandings under the applicable Facility or Facilities at such time, giving effect to any subsequent assignments.
 

 
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" Quarterly Application Date " means the 10th   day of each January, April, July and October of each calendar year, or if that day is not a Business Day, the next Business Day thereafter.
 
" Register " has the meaning specified in Section 2.11(b) .
 
" Reinvestment Prepayment Amount " means, with respect to any Net Cash Proceeds received from any Sale of property (other than Sales of its own Stock, Sales of property permitted under clauses (a), (b), (c)(i) and (d) of Section 8.4 , and Sales of Digital Systems by Holdings pursuant to the CHG Sale Leaseback and the Exhibitor Agreements) or Property Loss Event (including Net Cash Proceeds constituting insurance proceeds from any casualty or business interruption insurance policy of Holdings or any Group Member), the amount of such Net Cash Proceeds less (a) Permitted Reinvestments made by Holdings or a Group Member using such Net Cash Proceeds prior to the Reinvestment Prepayment Date relating to such Net Cash Proceeds and (b) Permitted Reinvestments required to be made by Holdings or a Group Member from such Net Cash Proceeds as a result of a Contractual Obligation entered into prior to such Reinvestment Prepayment Date with any Person that is not an Affiliate of any Group Member.
 
" Reinvestment Prepayment Date " means, with respect to any portion of Net Cash Proceeds of any Sale of property (other than Sales of its own Stock, Sales of property permitted under clauses (a), (b), (c)(i) and (d) of Section 8.4 , and Sales of Digital Systems by Holdings pursuant to the CHG Sale Leaseback and the Exhibitor Agreements) or Property Loss Event (including Net Cash Proceeds constituting insurance proceeds from any casualty or business interruption insurance policy of Holdings or any Group Member), the earlier of (a) the 180 th day (or, in the case of any Net Cash Proceeds subject to clause (b) of the definition of "Reinvestment Prepayment Amount", the 360 th day) after the completion of the portion of such Sale or Property Loss Event corresponding to such Net Cash Proceeds and (b) the date that is five (5) Business Days after the date on which such Net Cash Proceeds cannot be so reinvested or the Borrower shall have notified the Administrative Agent of the Borrower's determination not to make Permitted Reinvestments with such Net Cash Proceeds.
 
" Related Person " means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor (including those retained in connection with the satisfaction or attempted satisfaction of any condition set forth in Article III ) and other consultants and agents of or to such Person or any of its Affiliates, together with, if such Person is the Administrative Agent, each other Person or individual designated, nominated or otherwise mandated by or helping the Administrative Agent pursuant to and in accordance with Section 10.4 or any comparable provision of any Loan Document.
 
" Release " means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.
 
" Remedial Action " means all actions required to (a) clean up, remove, treat or in any other way address any Hazardous Material in the indoor or outdoor environment, (b) prevent or
 

 
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minimize any Release so that a Hazardous Material does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform pre-remedial studies and investigations and post-remedial monitoring and care with respect to any Hazardous Material.
 
" Required Exhibitor Contributions " means cash payments required to be paid by an Exhibitor to Holdings pursuant to its Exhibitor Agreement in an amount equal to the sum of (i)(A) the product of (1) $8,800 and (2) the number of Installed Digital Systems that are delivered to all Existing Cineplexes (as defined in such Exhibitor Agreement) under such Exhibitor Agreement plus (B) additional commitments of capital or fees (if any) required to be contributed by such Exhibitor under such Exhibitor Agreement and (ii) the product of (A) $25,000 and (B) the number of Installed Digital Systems that are delivered to New Build Cineplexes under such Exhibitor Agreement.  For avoidance of doubt, Previously Deployed Systems require Required Exhibitor Contributions but the value of the Previously Deployed Systems of any Exhibitor, as determined in accordance with the definition of "Previously Deployed System" shall be credited against the amount of the Required Exhibitor Contributions payable by such Exhibitor.
 
" Required Hedging Date " means (a) the 30 th day following the date on which the aggregate principal amount of all Borrowings of Term Loans equals or exceeds $25,500,000, (b) the 30th day following the date on which the aggregate principal amount of all Borrowings of Term Loans equals or exceeds $51,000,000 and (c) the 30 th day following the DDTL Termination Date.
 
" Required Lenders " means, at any time, (a) Lenders holding in the aggregate at such time in excess of 50% of the aggregate Pro Rata Outstandings and (b) in the event one Lender holds in excess of 50% of the aggregate Pro Rata Outstandings, at least two (2) Lenders holding in the aggregate in excess of 50% of the aggregate Pro Rata Outstandings, in each case, ignoring in such calculations amounts held by any Defaulting Lender.
 
" Required Vendor Mezzanine Loans " means, with respect to any Approved Vendor, the subordinated loans made (or committed to be made) to, Holdings by such Approved Vendor evidenced by Required Vendor Mezzanine Subordinated Notes which loans are (a) unsecured, (b) not guaranteed by any Person, (c) do not bear cash interest until after the Obligations and obligations under the CHG Lease Facility are paid in full, (d) repayable only upon repayment in full in cash of the Obligations, (e) in an amount equal to (i) in the case of Designated Installed Digital Systems purchased from such Approved Vendor, the product of (A)(x) prior to October 1, 2011, $4,700 and (y) on and after October 1, 2011, $3,318 and (B) the number of such Designated Installed Digital Systems purchased from such Approved Vendor, and (ii) in the case of any other Installed Digital Systems, the product of (A)(x) prior to October 1, 2011, $3,500 and (y) on and after October 1, 2011, $2,118 and (B) the number of such Installed Digital Systems purchased from such Approved Vendor, and (f) otherwise on terms and conditions acceptable to the Administrative Agent.  For the avoidance of doubt, Required Vendor Mezzanine Loans shall not be required with respect to Previously Deployed Systems.
 
" Required Vendor Mezzanine Subordinated Notes " means, with respect to any Required Vendor Mezzanine Loans made by any Approved Vendor, the subordinated promissory notes by
 

 
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Holdings, as maker, and such Approved Vendor, as payee, to evidence such Required Vendor Mezzanine Loans which notes shall be (a) reasonably acceptable to the Administrative Agent, (b) in any event, assignable by such Approved Vendor (and its assigns) to (i) any other Approved Vendor, Lender or any Affiliate thereof without the consent of Holdings and (ii) to any other Person with the consent of Holdings so long as no default exists under such Required Vendor Mezzanine Subordinated Notes (which consent shall not be unreasonably withheld, conditioned or delayed), and (c) providing for certain amounts thereof to be assigned to one or more parties to the Phase 2 Rollout financing.
 
" Requirements of Law " means, with respect to any Person, collectively, the common law and all federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
 
" Responsible Officer " means, with respect to any Person, any of the president, chief executive officer, treasurer, assistant treasurer, controller, managing member or general partner of such Person but, in any event (a) with respect to financial matters, any such officer that is responsible for preparing the Financial Statements delivered hereunder and (b) with respect to the Corporate Chart, other documents delivered pursuant to Section 6.1(e) , documents delivered on the Effective Date and documents delivered pursuant to Section 7.10 , the secretary or assistant secretary of such Person or any other officer responsible for maintaining the corporate and similar records of such Person.
 
" Restricted Payment " means (a) any dividend, return of capital, distribution or any other payment or Sale of property for less than fair market value, whether direct or indirect (including through the use of Hedging Agreements, the making, repayment, cancellation or forgiveness of Indebtedness and similar Contractual Obligations) and whether in cash, Securities or other property, on account of any Stock or Stock Equivalent of the Borrower or any of its Subsidiaries, in each case now or hereafter outstanding, including with respect to a claim for rescission of a Sale of such Stock or Stock Equivalent and (b) any redemption, retirement, termination, defeasance, cancellation, purchase or other acquisition for value, whether direct or indirect (including through the use of Hedging Agreements, the making, repayment, cancellation or forgiveness of Indebtedness and similar Contractual Obligations), of any Stock or Stock Equivalent of any Group Member or of any direct or indirect parent entity of the Borrower, now or hereafter outstanding, and any payment or other transfer setting aside funds for any such redemption, retirement, termination, cancellation, purchase or other acquisition, whether directly or indirectly and whether to a sinking fund, a similar fund or otherwise.
 
" Revolving Loan " means any loan by a Revolving Loan Lender to the Borrower as part of a Borrowing of Revolving Loans and refers to a Base Rate Loan or a Eurodollar Rate Loan.
 
" Revolving Loan Commitment " means, for any Revolving Loan Lender, the amount set opposite such Revolving Loan Lender's name on Schedule I as its Revolving Loan Commitment,
 

 
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or if such Revolving Loan Lender has entered into any Assignment, as set forth for such Revolving Loan Lender as its Revolving Loan Commitment in the Register maintained by the Administrative Agent pursuant to Section 2.11 , as such amount may be reduced or terminated pursuant to Section 2.3 or Article IX or otherwise under this Agreement.  The initial amount of the aggregate Revolving Loan Commitments is $2,500,000.
 
" Revolving Loan Conversion Date " means the Application Date immediately following the last day of the Availability Period.
 
" Revolving Loan Facility " means, at any time, the aggregate amount of the Revolving Loan Commitments at such time.
 
" Revolving Loan Lenders " means Lenders having a Revolving Loan Commitment, or if such Revolving Loan Commitments have been terminated, Lenders that are owed repayments of Revolving Loans.
 
" Revolving Loan Note " means a promissory note of the Borrower payable to the order of any Revolving Loan Lender in an amount not to exceed the Revolving Loan Commitment of such Revolving Loan Lender, in substantially the form of the attached Exhibit B-1 , evidencing indebtedness of the Borrower to such Revolving Loan Lender resulting from Revolving Loans owing to such Revolving Loan Lender.
 
" S&P " means Standard & Poor's Rating Services.
 
" Sale and Contribution Agreement " means the Sale and Contribution Agreement dated as of October 18, 2011 among Cinedigm, Parent Holdings, Holdings and the Borrower, including all schedules and exhibits thereto, in each case in form and substance satisfactory to the Administrative Agent, pursuant to which (a) Parent Holdings shall assign to Holdings its rights in each Digital Cinema Deployment Agreement relating to the Phase 2 Rollout (including any VPFs generated by Parent Holdings with respect to Installed Digital Systems and collections, accounts receivable or other amounts owing to Parent Holdings and generated from VPFs or Installed Digital Systems) and (b) Holdings shall sell or contribute such rights, together with its rights in and to each Exhibitor Agreement and each Supply Agreement, to the Borrower.
 
" Sale and Leaseback Transaction " means, with respect to any Person (the " obligor "), any Contractual Obligation or other arrangement with any other Person (the " counterparty ") consisting of a lease by such obligor of any property that, directly or indirectly, has been or is to be Sold by the obligor to such counterparty or to any other Person to whom funds have been advanced by such counterparty based on a Lien on, or an assignment of, such property or any obligations of such obligor under such lease.
 
" Screens in Service " means, for any date of determination, the number of Installed Digital Systems with an In-Service Date on or prior to such date that are not subject to a "quality failure" (as such term is defined in the Digital Cinema Deployment Agreements applicable to such Installed Digital Systems) on such date.
 
" Screens in Service Ratio " means, as of any date of determination, the quotient of (a) Screens in Service on such date divided by (b) the Average Screens in Service for the shorter of
 

 
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(i) the period from the Effective Date to the date of the most recently ended fiscal month and (ii) the most recent trailing twelve-month period.
 
" Screen Turnover Ratio " means, as of any period of determination, (a)(i) the total number (not dollar amount) of screen turns for which VPFs have been received in such period with respect to Installed Digital Systems multiplied by (ii) a ratio the numerator of which is twelve (12) and the denominator of which is the number of full fiscal months in such period divided by (b) the Average Screens in Service for such period.  For purposes of this definition, any fiscal month in which the Effective Date occurs shall be deemed to be a full fiscal month.
 
" Second Run Complexes " means "Second-Run Complexes" or "Sub-Run Complexes" as defined in the Digital Cinema Deployment Agreements (or, if a Digital Cinema Deployment Agreement uses another defined term corresponding to a "Second-Run Complex" or "Sub-Run Complex", such defined term).
 
" Secured Hedging Counterparty " means (a) the Administrative Agent and (b) any other Person reasonably satisfactory to the Administrative Agent that entered into a Hedging Agreement with the Borrower at a time when such Person was a Lender or an Affiliate of a Lender.
 
" Secured Hedging Documents " means, collectively, any Hedging Agreement that (a) is entered into by the Borrower and any Secured Hedging Counterparty therefor and (b) meets the requirements of Section 7.12 .
 
" Secured Hedging Obligation " means any obligation of the Borrower to make payments to any Secured Hedging Counterparty under any Secured Hedging Documents to which such Secured Hedging Counterparty is a party.
 
Secured Obligations ” means all Obligations of the Loan Parties (other than obligations owing to SG under the SG Advisory Fee Note).
 
" Secured Parties " means the Lenders, the Agents, the Secured Hedging Counterparties,   each other Indemnitee and any other holder of any Secured Obligation of any Loan Party.
 
" Security " means all Stock, Stock Equivalents, voting trust certificates, bonds, debentures, instruments and other evidence of Indebtedness, whether or not secured, convertible or subordinated, all certificates of interest, share or participation in, all certificates for the acquisition of, and all warrants, options and other rights to acquire, any Security.
 
" Sell " means, with respect to any property of any Person, to sell, convey, transfer, assign, license, lease or otherwise dispose of, any interest therein or to permit any other Person to acquire any such interest, including, in each case, through a operating lease, Capital Lease, Sale and Leaseback Transaction or through a sale, factoring at maturity, collection of or other disposal, with or without recourse, of any notes or accounts receivable.  Conjugated forms thereof and the noun " Sale " have correlative meanings.
 
" Service Agreement " means each service agreement with a minimum 10 year term and otherwise in substantially the form of Exhibit H (or with such modifications thereto as are
 

 
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reasonably acceptable to the Administrative Agent) between an Approved Exhibitor and a Digital Systems Servicer in connection with the installation of Digital Systems in such Approved Exhibitor's theaters pursuant to an Exhibitor Agreement.
 
" Servicing Fee " has the meaning set forth in the Management Services Agreement.
 
" SG " has the meaning specified in the preamble hereto.
 
" SG Advisory Fee Note " has the meaning specified in the Multiparty Agreement.
 
" Solvent " means, with respect to any Person as of any date of determination, that, as of such date, (a) the value of the assets of such Person (both at fair value and present fair saleable value) is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged, as such business is now conducted and is proposed to be conducted following the Effective Date.  In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
 
" Specified Event of Default " means (a) any Event of Default pursuant to Section 9.1(a) or (e) hereof and (b) any Event of Default pursuant to Section 9.1(o) hereof occurring as a result of (i) any payment default or default relating to bankruptcy, insolvency, or similar events (giving effect to any applicable grace or cure period) under the CHG Lease Facility Documents or (ii) any failure by CHG to advance funding or make a payment under the CHG Lease Facility Documents.
 
" Specified System " means an Installed Digital System with respect to which, as set forth in the Exhibitor Approval Schedule delivered with respect to the applicable Approved Exhibitor, the Administrative Agent has approved a principal amount of funded Term Loans of less than $42,500.
 
" SPV " means any special purpose funding vehicle identified as such in writing by any Lender to the Administrative Agent.
 
" Stock " means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.
 
" Stock Equivalents " means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable.
 
" Subsidiary " means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or other entity, the management of which is,
 

 
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directly or indirectly, controlled by, or of which an aggregate of more than 50% of the outstanding Voting Stock is, at the time, owned or controlled directly or indirectly by, such Person or one or more Subsidiaries of such Person.
 
" Substitute Lender " has the meaning specified in Section 2.15(a) .
 
" Supply Agreement " means an agreement between Holdings and an Approved Vendor providing for the sale by such Approved Vendor and the purchase by Holdings of Digital Systems, in form and substance satisfactory to the Administrative Agent, but in any event that (a) has a Fully Installed Purchase Price of not more than (i) prior to October 1, 2011, $71,000 per Installed Digital System and (ii) on and after October 1, 2011, $68,973 per Installed Digital System, (b) commits to provide Service Agreements and (c) commits to provide the Required Vendor Mezzanine Loans.
 
" Systems Financing Notice " has the meaning specified in Section 2.2 .
 
" SWDA " means the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.).
 
" Target Minimum Cash Amount " means an amount equal to (i) from the Effective Date through the DDTL Termination Date, a cumulative amount equal to $500,000 plus, on each monthly anniversary of the Effective Date during such period, $125,000, and (ii) after the DDTL Termination Date, $2,000,000.
 
" Tax Affiliate " means, (a) Parent Holdings, (b) Holdings, (c) the Borrower and its Subsidiaries and (d) any Affiliate of the Borrower with which the Borrower files or is eligible to file consolidated, combined or unitary tax returns.
 
" Tax Return " has the meaning specified in Section 4.8 .
 
" Taxes " has the meaning specified in Section 2.14(a) .
 
" Term Loans " means the collective reference to the Initial Advance Term Loans and the Delayed Draw Term Loans made by the Initial Advance Term Loan Lenders and the Delayed Draw Term Loan Lenders, as the case may be, to the Borrower pursuant to this Agreement.
 
" Term Loan Commitment " means, with respect to any Term Loan Lender, its Initial Advance Term Loan Commitment and its Delayed Draw Term Loan Commitment.
 
" Term Loan Facilities " means the Initial Advance Term Loan Facility and the Delayed Draw Term Loan Facility with each being a " Term Loan Facility ".
 
" Term Loan Lender " means a Lender with an Initial Advance Term Loan Commitment or Delayed Draw Term Loan Commitment or with Initial Advance Term Loans or Delayed Draw Term Loans outstanding.
 
" Title IV Plan " means a pension plan subject to Title IV of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise.
 

 
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" Trade Secrets " means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trade secrets.
 
" Trademarks " means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith.
 
" Type " of a Loan refers to the determination whether such Loan is a Eurodollar Rate Loan or Base Rate Loan.
 
" UCC " means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as in effect in the State of New York.
 
" Undisclosed Administration " means, in relation to a Lender or its Lender Parent Company, the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender or Lender Parent Company is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.
 
" United States " means the United States of America.
 
" U.S. Lender Party " means each of the Agents, each Lender, each SPV and each participant, in each case that is a Domestic Person.
 
" VPF " means the virtual print fee payment owing to the Borrower (as successor by contribution from Holdings (as assignee of Parent Holdings)) from (a) a Distributor pursuant to a Digital Cinema Deployment Agreement or (b) a Non-Participating Distributor.
 
" VPF Rate " means any distinct VPF rate due under any Digital Cinema Deployment Agreement for the booking of content, and which may include (by way of example and not by limitation), the standard VPF rate, the weekly VPF rate, the VPF rate for Second-Run Complexes, the discounted VPF rate for the booking of content after the theatrical break date, or any other distinct VPF rate under any Digital Cinema Deployment Agreement.
 
" Voting Stock " means Stock of any Person having ordinary power to vote in the election of members of the board of directors, managers, trustees or other controlling Persons, of such Person (irrespective of whether, at the time, Stock of any other class or classes of such entity shall have or might have voting power by reason of the occurrence of any contingency).
 
" Wholly Owned Subsidiary " of any Person means any Subsidiary of such Person, all of the Stock of which (other than nominal holdings and director's qualifying shares) is owned by such Person, either directly or through one or more Wholly Owned Subsidiaries of such Person.
 

 
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" Withdrawal Liability " means, at any time, any liability incurred (whether or not assessed) by any ERISA Affiliate and not yet satisfied or paid in full at such time with respect to any Multiemployer Plan pursuant to Section 4201 of ERISA.
 
Section 1.2     UCC Terms .  The following terms have the meanings given to them in the applicable UCC:  "commodity account," "commodity contract," "commodity intermediary," "deposit account," "entitlement holder," "entitlement order," "equipment," "financial asset," "general intangible," "goods," "instruments," "inventory," "proceeds," "securities account," "securities intermediary" and "security entitlement".
 
Section 1.3     Accounting Terms and Principles .  All accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in accordance with GAAP.  No change in the accounting principles used in the preparation of any Financial Statement hereafter adopted by the Borrower shall be given effect if such change would affect a calculation that measures compliance with any provision of Article V or VIII unless the Administrative Agent and the Required Lenders agree to modify such provisions to reflect such change in GAAP and, unless such provisions are modified, all Financial Statements, Compliance Certificates and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in GAAP.
 
Section 1.4     Payments .  The Administrative Agent may set up standards and procedures to determine or redetermine the equivalent in Dollars of any amount expressed in any currency other than Dollars and otherwise may, but shall not be obligated to, rely on any determination made by any Loan Party.  Any such determination or redetermination by the Administrative Agent shall be conclusive and binding for all purposes, absent manifest error.  No determination or redetermination by any Secured Party or Loan Party and no other currency conversion shall change or release any obligation of any Loan Party or of any Secured Party (other than the Administrative Agent and its Related Persons) under any Loan Document, each of which agrees to pay separately for any shortfall remaining after any conversion and payment of the amount as converted.  The Administrative Agent may round up or down, and may set up appropriate mechanisms to round up or down, any amount hereunder to nearest higher or lower amounts and may determine reasonable de minimis payment thresholds.
 
Section 1.5    Interpretation .  (a) Certain Terms .  Except as otherwise expressly set forth in any Loan Document, all accounting terms not specifically defined herein shall be construed in accordance with GAAP (except for the term " property ," which shall be interpreted as broadly as possible, including, in any case, cash, Securities, other assets, rights under Contractual Obligations and Permits and any right or interest in any property).  The terms " herein ," " hereof " and similar terms refer to this Agreement as a whole.  In the computation of periods of time from a specified date to a later specified date in any Loan Document, the terms " from " means "from and including" and the words " to " and " until " each mean "to but excluding" and the word " through " means "to and including."  In any other case, the term " including " when used in any Loan Document means "including without limitation."  The term " documents " when used in any Loan Document means all writings, however evidenced and whether in physical or electronic form, including all documents, instruments, agreements, notices, demands, certificates, forms, financial statements, opinions and reports.  The term " incur " when used in any Loan Document
 

 
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means incur, create, make, issue, assume or otherwise become directly or indirectly liable in respect of or responsible for, in each case whether directly or indirectly, and the terms "incurrence" and "incurred" and similar derivatives shall have correlative meanings.  The terms "payment in full" or "paid in full" or "satisfied", in each case, as used with respect to any Obligation means the receipt of immediately available funds equal to the full amount of such Obligation.
 
(b)     Certain References .  Unless otherwise expressly indicated, references (i) in this Agreement to an Exhibit, Schedule, Article, Section or clause refer to the appropriate Exhibit or Schedule to, or Article, Section or clause in, this Agreement and (ii) in any Loan Document, to (A) any agreement shall include, without limitation, all exhibits, schedules, appendixes and annexes to such agreement and, unless the prior consent of any the Administrative Agent or any Lender required therefor is not obtained, any amendment, restatement, amendment and restatement, supplement or other modification to any term of such agreement, (B) any statute shall be to such statute as modified from time to time and to any successor legislation thereto, in each case as in effect at the time any such reference is operative and (C) any time of day shall be a reference to New York time.  Titles of articles, sections, clauses, exhibits, schedules and annexes contained in any Loan Document are without substantive meaning or content of any kind whatsoever and are not a part of the agreement among the parties hereto.  Unless otherwise expressly indicated, the meaning of any term defined (including by reference) in any Loan Document shall be equally applicable to both the singular and plural forms of such term.
 
ARTICLE II
THE FACILITIES
 
Section 2.1     Commitments for Loans.
 
(a)     Initial Advance Term Loans . Each Initial Advance Term Loan Lender severally agrees, on the terms and conditions set forth in this Agreement (including without limitation, the conditions set forth in Article III ), to make on the Initial Funding Date a single term loan (each, an " Initial Advance Term Loan ") to the Borrower in an amount not to exceed such Initial Advance Term Loan Lender's Initial Advance Term Loan Commitment. The Borrower may not reborrow any Initial Advance Term Loans that have been repaid.  Initial Advance Term Loans may be Base Rate Loans and or Eurodollar Rate Loans, as further provided herein.
 
(b)     Delayed Draw Term Loans . Each Delayed Draw Term Loan Lender severally agrees, on the terms and conditions set forth in this Agreement (including without limitation, the conditions set forth in Article III ), to make term loans (each, a " Delayed Draw Term Loan ") to the Borrower from time to time on any Business Day (but, in any event, no more than once per calendar month) during the period from the Effective Date until the DDTL Termination Date in an amount not to exceed the lesser of (i) such Delayed Draw Term Loan Lender's ratable share of all Delayed Draw Term Loans requested on such Funding Date and (ii) such Delayed Draw Term Loan Lender's unused Delayed Draw Term Loan Commitment (after giving effect to all Delayed Draw Term Loans made by such Delayed Draw Term Loan Lender prior to such Funding Date).  Notwithstanding anything to the contrary in this clause (b) but subject to the satisfaction of the conditions set forth in Section 3.3 and to the extent any unused Delayed Draw Term Loan
 

 
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Commitments exist on the DDTL Termination Date, each Delayed Draw Term Loan Lender agrees to make on the DDTL Termination Date a funding to the DDTL Escrow Account in an amount up to the unused portion of its Delayed Draw Term Loan Commitment (the " DDTL Termination Date Funding "), which amount will be made available to the Borrower by the Administrative Agent subject to the terms of Section 2.2 , and which funding shall constitute a funding of Delayed Draw Term Loans only upon and to the extent of any subsequent release to the Borrower of funds in the DDTL Escrow Account.  The Borrower may not reborrow any Delayed Draw Term Loans that have been repaid.  Delayed Draw Term Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein; provided that each Delayed Draw Term Loan made on a Funding Date shall consist of Delayed Draw Term Loans of the same Type and shall be made ratably by the Delayed Draw Term Loan Lenders according to their respective Delayed Draw Term Loan Commitments.
 
(c)     Revolving Loans .  Each Revolving Lender severally agrees, on the terms and conditions set forth in this Agreement (including without limitation, the conditions set forth in Article III ), to make Revolving Loans to the Borrower from time to time on any Business Day during the period from the Initial Funding Date until the last day of the Availability Period in an amount for each Revolving Lender not to exceed such Revolving Lender's unused Revolving Loan Commitment.  Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.  Within the limits of each Revolving Lender's Revolving Loan Commitment, and subject to the terms of this Agreement, the Borrower may from time to time borrow, prepay, and reborrow Revolving Loans.  Each Revolving Loan shall consist of Revolving Loans of the same Type made on the same day by the Revolving Lenders ratably according to their respective Revolving Commitments.
 
(d)     DDTL Escrow Account .  On or prior to the DDTL Termination Date, if the Borrower delivers a Notice of DDTL Termination Date Funding, the Administrative Agent agrees to establish in its name and with SG a non-interest bearing deposit account (the " DDTL Escrow Account ").  The Borrower will cause the DDTL Escrow Account to be maintained until all funds therein are disbursed in accordance with Section 2.2 .  The proceeds of the DDTL Termination Date Funding shall be held by the Administrative Agent in the DDTL Escrow Account, and no Person other than the Administrative Agent shall have a right of withdrawal from the DDTL Escrow Account or any other right or power with respect to the DDTL Escrow Account, except as expressly set forth in Sections 2.2 and 2.5 .  Notwithstanding any provision in this Agreement or any other Loan Document to the contrary, the sole funding obligation of each Delayed Draw Term Loan Lender with respect to fundings from the DDTL Escrow Account shall be satisfied in full upon the funding of its Pro Rata Share of the DDTL Termination Date Funding on the DDTL Termination Date.  Each Loan Party, the Administrative Agent and each Lender hereby acknowledges and agrees that each Delayed Draw Term Loan Lender is funding its Pro Rata Share of the DDTL Termination Date Funding for application in the manner contemplated by Section 2.2 .  No Loan Party shall have any right, title or interest in or to the amounts on deposit from time to time in the DDTL Escrow Account or any obligations with respect thereto (except for the obligation to pay fees as provided in Section 2.8(c) ) until the funding of amounts therein to the Borrower in accordance with Section 2.2 , it being acknowledged and agreed by the parties hereto that the making of any DDTL Termination Date Funding does not constitute any Loan or extension of credit to the Borrower.
 

 
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Section 2.2     Borrowing Procedures .  (a) Notice of Borrowings from the Borrower .  Each Borrowing shall be made on notice given by the Borrower to the Administrative Agent not later than 11:00 a.m. on (i) the first Business Day, in the case of a Borrowing consisting of Base Rate Loans or a release of funds in the DDTL Escrow Account and (ii) the third Business Day, in the case of a Borrowing of Eurodollar Rate Loans, prior to the applicable Funding Date.  Such notice may be made in a writing substantially in the form of Exhibit C (a " Notice of Borrowing ") duly completed or by telephone if confirmed promptly, but in any event at least one Business Day prior to such Borrowing, with such a Notice of Borrowing.  All Loans shall be made as Base Rate Loans unless, outside of a suspension period pursuant to Section 2.12 , the Notice of Borrowing specifies that all or a portion thereof shall be Eurodollar Rate Loans; provided that no Loan shall be made as or converted into a Eurodollar Rate Loan before the date that is ten Business Days after the Effective Date.  Each Borrowing shall be (x) in the case of Term Loans or the release of funds in the DDTL Escrow Account, in a minimum amount of $1,000,000 and (y) in the case of Revolving Loans, in a minimum amount of $250,000; provided that , in the case of the final Delayed Draw Term Loans and final release of funds from the DDTL Escrow Account, the minimums set forth in clause (x) shall not apply so long as such Borrowing is in an amount equal to (A) in the case of the final Delayed Draw Term Loans, the unused Delayed Draw Term Loan Commitments of the Delayed Draw Term Loan Lenders and (B) in the case of a final release of funds from the DDTL Escrow Account,  all funds remaining in the DDTL Escrow Account as of such Funding Date.  Notwithstanding anything to the contrary, (1) the Borrower shall not submit more than one Notice of Borrowing for Delayed Draw Term Loans or release of funds from the DDTL Escrow Account in any calendar month and (2) no Notice of Borrowing shall be effective unless the Borrower shall have given to the Administrative Agent not less than five Business Days prior to the delivery of such Notice of Borrowing a notice, substantially in the form of Exhibit J (such notice, a " Systems Financing Notice "), setting forth (I) the Exhibitor Approval Schedule, (II) the number of Installed Digital Systems to be purchased with the proceeds of the Term Loans requested in such Notice of Borrowing that are Previously Deployed Systems, (III) the aggregate principal amount of all Term Loans requested in such Notice of Borrowing that will be applied to the Fully Installed Purchase Price of such Previously Deployed Systems, (IV) the number of Installed Digital Systems to be purchased with the proceeds of the Term Loans requested in such Notice of Borrowing that are Specified Systems, (V) the aggregate principal amount of all Term Loans requested in such Notice of Borrowing that will be applied to the Fully Installed Purchase Price of such Specified Systems and (VI) if any Specified Systems are included in such Systems Financing Notice, (aa) the identity of each Approved Exhibitor to which such Specified Systems will be delivered, (bb) the number of such Specified Systems that will be delivered to each such Approved Exhibitor and (cc) the aggregate principal amount of all Term Loans requested in such Notice of Borrowing that will be applied to the Fully Installed Purchase Price of the Specified Systems to be delivered to each such Approved Exhibitor.
 
(b)     Notice of DDTL Termination Date Funding from the Borrower .  The DDTL Termination Date Funding shall be made on notice given by the Borrower to the Administrative Agent not later than 11:00 a.m. on the first Business Day prior to the DDTL Termination Date.  Such notice shall be made in a duly completed writing substantially in the form of Exhibit I (a " Notice of DDTL Termination Date Funding ").  The DDTL Termination Date Funding shall be in a minimum amount of $1,000,000.  Notwithstanding anything to the contrary, the Borrower shall not submit more than one Notice of DDTL Termination Date Funding.
 

 
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(c)     Notice to Each Lender .  The Administrative Agent shall give to each Lender prompt notice of the Administrative Agent's receipt of a Notice of Borrowing or a Notice of DDTL Termination Date Funding, as the case may be, and, if Eurodollar Rate Loans are properly requested in any such Notice of Borrowing, prompt notice of the applicable interest rate.  Each Lender shall, before 11:00 a.m. on the applicable Funding Date or date of the DDTL Termination Date Funding, as the case may be, make available to the Administrative Agent at its address referred to in Section 11.11 (or, in the case of any release from the DDTL Escrow Account, permit the Administrative Agent to withdraw from such account), such Lender's Pro Rata Share of such proposed Borrowing or DDTL Termination Date Funding, as the case may be.  Upon fulfillment or due waiver on or prior to the applicable Funding Date of the conditions set forth in Section 3.2 , the Administrative Agent shall make such funds available to the Borrower on the applicable Funding Date.  Upon fulfillment or due waiver on the DDTL Termination Date of the conditions set forth in Section 3.3 , the Administrative Agent shall deposit such funds into the DDTL Escrow Account.  Any release of funds from the DDTL Escrow Account to the Borrower shall constitute a funding of Delayed Draw Term Loans by the Delayed Draw Term Loan Lenders subject to fulfillment or due waiver of the conditions set forth in Section 3.2 .
 
(d)     Front Funding .  Unless the Administrative Agent shall have received notice from any Lender prior to the applicable Funding Date or the DDTL Termination Date, as the case may be, that such Lender will not make a payment in the amount of such Lender's Commitment (or any portion thereof) available to the Administrative Agent on such Funding Date or the DDTL Termination Date, as the case may be, the Administrative Agent may assume that such Lender has made such payment available to the Administrative Agent on such Funding Date or the DDTL Termination Date, as the case may be, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such Funding Date (or deposit into the DDTL Escrow Account, as the case may be) a corresponding amount.  The Borrower agrees to repay to the Administrative Agent on demand such deficient amount (until repaid by such Lender) with interest thereon for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at the interest rate applicable to the Obligations that would have been created when the Administrative Agent made available such amount to the Borrower had such Lender made a corresponding payment available; provided , however , that such payment by the Borrower shall not relieve such Lender of any obligation it may have to the Borrower.  In addition, any Lender that shall not have made available to the Administrative Agent any portion of any payment described above shall be deemed a Defaulting Lender and agrees to pay such amount to the Administrative Agent on demand together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at the Federal Funds Rate for the first Business Day and thereafter (x) in the case of a payment in respect of a Loan, at the interest rate applicable at the time to such Loan and (y) otherwise, at the interest rate applicable to Base Rate Loans.  Such repayment shall then constitute the funding of the corresponding Loan (including any Loan deemed to have been made hereunder with such payment) or participation, and promptly paid to the Borrower.  The existence of any Defaulting Lender shall not relieve any other Lender of its obligations under any Loan Document, but no other Lender shall be responsible for the failure of any Defaulting Lender to make any payment required under any Loan Document.
 
Section 2.3     Termination or Reduction of Commitments; Repayment of Obligation .
 

 
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(a)     Termination of Commitments .  (i) Optional .  The Borrower may, upon notice to the Administrative Agent, terminate in whole or in part the Commitments or reduce in whole or in part the amounts on deposit in the DDTL Escrow Account, as the case may be; provided that (i) any such notice shall be received by the Administrative Agent not later than 10:00 a.m. three Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $250,000 in excess thereof, and (iii) the Borrower shall not terminate or reduce the Commitments or the amounts on deposit in the DDTL Escrow Account, as the case may be, if, after giving effect thereto and to any concurrent prepayments hereunder, the Commitment Availability is less than the projected acquisition and installation costs of Digital Systems to be installed under any Exhibitor Agreements as such costs are reflected in the most recent Pipeline Report.  The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Commitments or the amounts on deposit in the DDTL Escrow Account, as the case may be, under this Section 2.3(a)(i) .  Upon any reduction of the Commitments, the Commitment of each Lender shall be reduced by such Lender's Pro Rata Share of such reduction amount.  Upon any voluntary reduction by the Borrower of amounts on deposit in the DDTL Escrow Account under this clause (a), the Administrative Agent shall return such reduced amount to the Delayed Draw Term Loan Lenders ratably according to the amount funded by each such Delayed Draw Term Loan Lender into the DDTL Escrow Account on the DDTL Termination Date.  All fees accrued until the effective date of any termination or reduction of the Commitments or reduction of amounts on deposit in the DDTL Escrow Account, as the case may be, shall be paid on the effective date of such termination or reduction.
 
(ii)            Mandatory . Unless previously terminated, (i) each Lender's Initial Advance Term Loan Commitment shall terminate on the Initial Funding Date, (ii) each Lender's Revolving Loan Commitment shall terminate on the last day of the Availability Period and (iii) each Lender's Delayed Draw Term Loan Commitment shall (A) be reduced on each Funding Date by an amount equal to the Delayed Draw Term Loan made by such Lender on such Funding Date and (B) terminate on the DDTL Termination Date (except to the extent that funds on deposit in the DDTL Escrow Account must be released to the Borrower in accordance with Section 2.2 ).
 
(b)     Repayment in Full on Maturity Date .  The Borrower promises to pay to the Administrative Agent for the account of the Lenders all outstanding principal amounts of the Loans (together with all accrued but unpaid interest) on the Maturity Date.
 
(c)     Amortization of Term Loans .  Commencing January 15, 2013 and on each Payment Date thereafter, the Borrower promises to pay to the Administrative Agent for the account of the Term Loan Lenders the outstanding principal amount of the Term Loans in an amount equal to the product of (i) the percentage set forth below corresponding to the period in which such Payment Date occurs and (ii) the aggregate principal amount of the Term Loans outstanding as of the Revolving Loan Conversion Date:
 
Period
Amount
Fiscal Quarter ending March 31, 2013
1.10%
Fiscal Quarter ending June 30, 2013
1.125%
 
 
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Fiscal Quarter ending September 30, 2013
1.15%
Fiscal Quarter ending December 31, 2013
1.175%
Fiscal Quarter ending March 31, 2014
1.20%
Fiscal Quarter ending June 30, 2014
1.225%
Fiscal Quarter ending September 30, 2014
1.25%
Fiscal Quarter ending December 31, 2014
1.275%
Fiscal Quarter ending March 31, 2015
1.30%
Fiscal Quarter ending June 30, 2015
1.325%
Fiscal Quarter ending September 30, 2015
1.35%
Fiscal Quarter ending December 31, 2015
1.375%
Fiscal Quarter ending March 31, 2016
1.40%
Fiscal Quarter ending June 30, 2016
1.425%
Fiscal Quarter ending September 30, 2016
1.45%
Fiscal Quarter ending December 31, 2016
1.475%
Fiscal Quarter ending March 31, 2017
1.50%
Fiscal Quarter ending June 30, 2017
1.525%
Fiscal Quarter ending September 30, 2017
1.55%
 
 
Section 2.4     Voluntary Prepayments .  The Borrower may prepay the outstanding principal amount of any Revolving Loan or Term Loan in whole or in part at any time without premium or penalty; provided , however , that (a) each partial prepayment of principal shall be in an aggregate amount that is an integral multiple of (i) in the case of Revolving Loans, $50,000 and (ii) in the case of Term Loans, $1,000,000 and (b) in the case of Term Loans, (i) the outstanding principal amount of all Revolving Loans (before and after giving effect to such prepayment) shall equal zero and (ii) the Pipeline Report most recently delivered pursuant to Section 6.1(m) demonstrates that the Borrower will have sufficient cash available (after giving effect to any such prepayment) to service the costs and expenses of the Digital Systems that are estimated in such Pipeline Report to be installed during the Phase 2 Rollout through the end of the Availability Period.  Any prepayments under this Section 2.4 shall be accompanied by (x) any amounts due and payable pursuant to Section 2.13(a) and (y) all accrued and unpaid interest on the amount prepaid.
 
Section 2.5     Mandatory Prepayments .
 
(a)     Excess Cash Flow .   Until the Obligations shall have been paid in full in cash and to the extent required by Section 4.5(l) of the Multiparty Agreement, the Borrower shall pay or cause to be paid to the Administrative Agent on the 15th   day of each January, April, July and October of each calendar year (or if that day is not a Business Day, the next Business Day thereafter) for the prepayment of the outstanding principal amount of the Term Loans, without premium or penalty, 100% of all Excess Cash Flow; provided that , all such prepayments of
 

 
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Excess Cash Flow shall be in a principal amount of at least $500,000 or a whole multiple of $250,000 in excess thereof.  To the extent Excess Cash Flow otherwise required to be applied as a pre-payment as of any Quarterly Application Date is less than the thresholds described in the preceding sentence, such Excess Cash Flow shall remain on deposit in the Collection Account until the next Monthly Application Date or Quarterly Application Date.
 
(b)     Debt Issuances .   Until the Obligations shall have been paid in full in cash, within one Business Day of receipt by any Loan Party or any of its Subsidiaries of Net Cash Proceeds arising from the incurrence by Holdings or any Group Member of Indebtedness of the type specified in clause (a) or (b) of the definition thereof (other than any such Indebtedness permitted hereunder in reliance upon any of clauses (a) through (h) of Section 8.1 ), the Borrower shall pay or cause to be paid to the Administrative Agent a prepayment of the outstanding principal amount of the Term Loans in an amount equal to 100% of such Net Cash Proceeds.
 
(c)     Asset Sales and Property Loss Events .   Until the Obligations shall have been paid in full in cash, within one Business Day of receipt on or after the Effective Date in any Fiscal Year by any Loan Party of Net Cash Proceeds arising from (i) any Sale by Holdings or any Group Member of any of its property (other than Sales of its own Stock, Sales of property permitted under clauses (a), (b), (c)(i) and (d) of Section 8.4 , and Sales of Digital Systems by Holdings pursuant to the CHG Sale Leaseback and the Exhibitor Agreements), (ii) any Property Loss Event, or (iii) any business interruption insurance policy, the Borrower shall pay or cause to be paid to the Administrative Agent (including through assignment of lease payments required to be prepaid to CHG under the CHG Lease Facility Documents) a prepayment of the outstanding principal amount of the Term Loans, without premium or penalty, in an amount equal to 100% of such Net Cash Proceeds; provided that within one Business Day of receipt of such Net Cash Proceeds and as long as no Event of Default has occurred and is continuing, any Group Member may deposit and maintain such Net Cash Proceeds in a Cash Collateral Account (other than the Distributor Lockbox Account) and thereafter make Permitted Reinvestments with such Net Cash Proceeds (and the Borrower shall not be required to make or cause such prepayment) so long as (A) such Net Cash Proceeds so deposited are intended to be used to make Permitted Reinvestments, (B) on each Reinvestment Prepayment Date for such Net Cash Proceeds, the Borrower shall pay or cause to be paid to the Administrative Agent (including through assignment of lease payments required to be prepaid to CHG under the CHG Lease Facility Documents) a prepayment of the outstanding principal amount of the Term Loans in an amount equal to the Reinvestment Prepayment Amount applicable to such Reinvestment Prepayment Date and such Net Cash Proceeds and (C) such Net Cash Proceeds used for Permitted Reinvestments under this Section 2.5(c) does not exceed $50,000 in any Fiscal Year without the prior written consent of the Administrative Agent.  Upon the occurrence and during the continuation of an Event of Default, Holdings' and the Group Members' right to make Permitted Reinvestments shall be suspended and all Net Cash Proceeds described above (including existing Permitted Reinvestments held in the Cash Collateral Accounts) shall, at the direction of the Administrative Agent or the Required Lenders (and automatically upon any Event of Default under Section 9.1(e) ) be used to prepay the outstanding principal amount of the Term Loans in accordance with Section 2.9 below.
 
(d)     DDTL Escrow Account .  To the extent a DDTL Termination Date Funding is made, all amounts remaining on deposit in the DDTL Escrow Account and not released to the
 

 
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Borrower or returned to the Delayed Draw Term Loan Lenders in accordance with Section 2.3(a) shall be returned to each Delayed Draw Term Loan Lender on the last day of the Availability Period, ratably according to the amount funded by each such Delayed Draw Term Loan Lender into the DDTL Escrow Account on the DDTL Termination Date.
 
Section 2.6     Interest .  (a)   Rate .  All Loans shall bear interest on the unpaid principal amount thereof from the applicable Funding Date until paid in full, except as otherwise provided in clause (c) below, as follows: (i) in the case of Base Rate Loans, at a rate per annum equal to the sum of the Base Rate as in effect from time to time and the Applicable Margin, (ii) in the case of Eurodollar Rate Loans, at a rate per annum equal to the sum of the Eurodollar Rate as in effect for the applicable Interest Period and the Applicable Margin and (iii) in the case of other Obligations that are past due and payable, at a rate per annum equal to the sum of the Base Rate as in effect from time to time and the Applicable Margin for Base Rate Loans.
 
(b)     Payments .  Interest accrued shall be payable in arrears (i) if accrued on the principal amount of any Loan, (A) at maturity (whether by acceleration or otherwise), (B) upon the payment or prepayment of the principal amount on which such interest has accrued and (C) on each Interest Payment Date commencing with the first such Interest Payment Date occurring after the Effective Date, and (ii) if accrued on any other Obligation, on demand from and after the time such Obligation is due and payable (whether by acceleration or otherwise).
 
(c)     Default Interest .  Notwithstanding the rates of interest specified in clause (a) above or elsewhere in any Loan Document, effective (i) immediately upon the occurrence of any Specified Event of Default described in clause (a) of the definition thereof, or (ii) upon notice from the Administrative Agent or the Required Lenders after the occurrence of any other Specified Event of Default, and in each case, for as long as such Specified Event of Default shall be continuing, the principal balance of all Obligations (including any Obligation that bears interest by reference to the rate applicable to any other Obligation) then due and payable shall bear interest at a rate that is two percent (2.00%) per annum in excess of the interest rate applicable to such Obligations from time to time (such interest accrued solely as a result of such excess rate of interest, the " Accrued Default Interest ").  Accrued Default Interest shall be payable during the continuance of any Specified Event of Default pursuant to Sections 4.4 and 4.5 of the Multiparty Agreement.
 
Section 2.7     Conversion and Continuation Options .  (a)   Option .  The Borrower may elect (i) in the case of any Eurodollar Rate Loan, (A) to continue such Eurodollar Rate Loan or any portion thereof for an additional Interest Period on the last day of the Interest Period applicable thereto and (B) to convert such Eurodollar Rate Loan or any portion thereof into a Base Rate Loan at any time on any Business Day, subject to the payment of any breakage costs required by Section 2.13(a) , and (ii) in the case of Base Rate Loans, to convert such Base Rate Loans or any portion thereof into Eurodollar Rate Loans at any time on any Business Day occurring at least ten Business Day after the Effective Date, upon three (3) Business Days' prior notice; provided , however , that, (x) for each Interest Period, the aggregate amount of Eurodollar Rate Loans having such Interest Period must be an integral multiple of $1,000,000 and (y) no conversion in whole or in part of Base Rate Loans to Eurodollar Rate Loans and no continuation in whole or in part of Eurodollar Rate Loans shall be permitted at any time at which (1) a
 

 
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Specified Event of Default has occurred and is continuing or (2) such continuation or conversion would be made during a suspension imposed by Section 2.12 .
 
(b)     Procedure .  Each such election shall be made by giving the Administrative Agent at least three (3) Business Days' prior notice in substantially the form of Exhibit D (a " Notice of Conversion or Continuation ") duly completed.  The Administrative Agent shall promptly notify each Lender of its receipt of a Notice of Conversion or Continuation and of the options selected therein.  If the Administrative Agent does not receive a timely Notice of Conversion or Continuation from the Borrower containing a permitted election to continue or convert any Eurodollar Rate Loan, then, upon the expiration of the applicable Interest Period, such Loan shall be automatically converted to a Base Rate Loan.  Each partial conversion or continuation shall be allocated ratably among the Lenders in accordance with their Pro Rata Share of the applicable Borrowing.
 
Section 2.8     Fees .
 
(a)     The Borrower shall pay all fees described in the Fee Letter in the amount, at the times and to the Persons specified therein.
 
(b)     The Borrower shall pay to the Administrative Agent for the benefit of each Revolving Loan Lender a fee of 1.00% per annum of the average daily balance of the unused portion of the Revolving Loan Commitments of such Revolving Loan Lender quarterly in arrears for the period from and after the Effective Date to and including the last day of the Availability Period.
 
(c)     The Borrower shall pay to the Administrative Agent for the benefit of each Delayed Draw Term Loan Lender a fee of 1.00% per annum of the average daily balance of the unused portion of the Delayed Draw Term Loan Commitments of such Delayed Draw Term Loan Lender quarterly in arrears for the period from and after the Effective Date to and including the last day of the Availability Period.  For avoidance of doubt and for purposes of calculating any amounts owing under this Section 2.8(c) , each Lender's Delayed Draw Term Loan Commitment shall be deemed to terminate after any DDTL Termination Date Funding on the DDTL Termination Date.
 
(d)     The Borrower shall pay to the Administrative Agent for the benefit of each Delayed Draw Term Loan Lender an escrow fee of 2.50% per annum plus an amount per annum equal to clause (a) of the definition of Eurodollar Base Rate (which amount shall be determined based on an Interest Period of three months that commenced on the date the proceeds from the DDTL Termination Date Funding were deposited into the DDTL Escrow Account) of such Delayed Draw Term Loan Lender's Pro Rata Share of the average daily balance of any amount on deposit in the DDTL Escrow Account.  Such fee shall be payable on the last day of the Availability Period.  For avoidance of doubt, until such escrowed amounts are released from the DDTL Escrow Account in accordance Section 2.2 , amounts payable under this Section 2.8(d) shall be in lieu of any interest that would have accrued on such escrowed amounts if they were deemed to be "Loans" hereunder.
 

 
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Section 2.9     Application of Payments .  (a) Application of Voluntary Prepayments .  Subject to the provisions of clause (c) below, (i) all voluntary prepayments of Revolving Loans received by the Administrative Agent from the Borrower pursuant to Section 2.4 shall be applied to the outstanding Revolving Loans and (ii) all voluntary prepayments of the Term Loans received by the Administrative Agent from the Borrower pursuant to Section 2.4 shall be applied ratably among the Term Loan Lenders (A) first , to the scheduled installment of the Term Loans due on the Maturity Date until the non-amortized amount of such installment (taking into account all voluntary and mandatory prepayments applied against such installment) is zero, and (B) second , to reduce ratably the remaining scheduled installments of the Term Loans.
 
(b)     Application of Mandatory Prepayments .  Subject to the provisions of clause (c) below, any mandatory prepayments of principal made by the Borrower to the Administrative Agent pursuant to Section 2.5 (other than Section 2.5(d) ) shall be applied (i) first , to the ratable payment of the outstanding principal amounts of the Term Loans, (ii) second , to the ratable payment of all other Secured Obligations, including all amounts then owing with respect to Secured Hedging Documents, and (iii) to the payment of all other Obligations.  Payments of the Term Loans made pursuant to clause (i) above shall be applied (A) first , to the scheduled installment of the Term Loans due on the Maturity Date until the non-amortized amount of such installment (taking into account all voluntary and mandatory prepayments applied against such installment) is zero, and (B) second , to reduce ratably the remaining scheduled installments of the Term Loans.
 
(c)     Application of Payments During an Event of Default .  The Borrower hereby irrevocably waives, and agrees to cause each Loan Party and each other Group Member to waive, the right to direct the application during the continuance of an Event of Default of any and all payments in respect of any Obligation and any proceeds of Collateral and agrees that, notwithstanding the provisions of clauses (a) and (b) above, the Administrative Agent may, and, upon either (i) the direction of the Required Lenders or (ii) the acceleration of any Obligations pursuant to Section 9.2 , shall, apply or cause the application of all payments in respect of any Obligation, all funds on deposit in any Cash Collateral Account (subject, in the case of the Distributor Lockbox Account, to the terms of the Distributor Lockbox Collateral Agency Agreement, and in the case of the Holdings Operating Account, the terms of the Multiparty Agreement) and all other proceeds of Collateral (A) first , to pay Obligations in respect of any cost or expense reimbursements, fees or indemnities then due to the Administrative Agent, (B) second , to pay Obligations in respect of any cost or expense reimbursements, fees or indemnities then due to the other Agents, (C) third , to pay Obligations in respect of any cost or expense reimbursements, fees or indemnities then due to the Lenders, (D) fourth , to pay interest then due and payable in respect of the Loans, (E) fifth , to the ratable payment of the outstanding principal amounts of the Loans and all amounts then owing with respect to Secured Hedging Documents, (F) sixth , to the ratable payment of all other Secured Obligations and (G) seventh , to the payment of all other Obligations.
 
(d)     Application of Payments Generally .  All repayments of any Loans shall be applied first , to repay such Loans outstanding as Base Rate Loans and then , to repay such Loans outstanding as Eurodollar Rate Loans, with those Eurodollar Rate Loans having earlier expiring Interest Periods being repaid prior to those having later expiring Interest Periods.  All repayments of Loans shall be applied to reduce the remaining installments of such outstanding
 

 
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principal amounts of the Loans in the inverse order of their maturities unless otherwise provided in any Loan Document.  If sufficient amounts are not available to repay all outstanding Secured Obligations described in any priority level set forth in this Section 2.9 , the available amounts shall be applied, unless otherwise expressly specified herein, to such Secured Obligations ratably based on the proportion of the Secured Parties' interest in such Secured Obligations.  Any priority level set forth in this Section 2.9 that includes interest shall include all such interest, whether or not accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding.
 
Section 2.10     Payments and Computations .  (a)   Procedure .  The Borrower shall make each payment under any Loan Document not later than 12:00 noon on the day when due to the Administrative Agent by wire transfer to such account or by such other means to such other address as the Administrative Agent shall have notified the Borrower in writing within a reasonable time prior to such payment in immediately available Dollars and without setoff or counterclaim.  The Administrative Agent shall promptly thereafter cause to be distributed immediately available funds relating to the payment of principal, interest or fees to the Lenders, in accordance with the application of payments set forth in Section 2.9 .  The Lenders shall make any payment under any Loan Document in immediately available Dollars and without setoff (other than as set forth in Section 2.8(d) ) or counterclaim.  Payments received by the Administrative Agent after 12:00 noon shall be deemed to be received on the next Business Day.
 
(b)     Computations of Interest and Fees .  All computations of interest and of fees shall be made by the Administrative Agent on the basis of a year of 360 days (or, in the case of Base Rate Loans whose interest rate is calculated based on the rate set forth in clause (a) of the definition of "Base Rate", 365/366 days), in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest and fees are payable.  Each determination of an interest rate or the amount of a fee hereunder shall be made by the Administrative Agent (including determinations of a Eurodollar Rate or Base Rate in accordance with the definitions of "Eurodollar Rate" and "Base Rate", respectively) and shall be conclusive, binding and final for all purposes, absent manifest error.
 
(c)     Payment Dates .  Unless otherwise specified herein, whenever any payment hereunder shall be stated to be due on a day other than a Business Day, the due date for such payment shall be extended to the next succeeding Business Day without any increase in such payment as a result of additional interest or fees; provided , however , that such interest and fees shall continue accruing as a result of such extension of time.
 
(d)     Advancing Payments .  Unless the Administrative Agent shall have received notice from the Borrower to the Lenders prior to the date on which any payment is due hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent that the Borrower shall not have made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent on demand such amount distributed to such Lender together with interest thereon (at the Federal Funds Rate for the first Business Day and
 

 
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thereafter, at the rate applicable to Base Rate Loans) for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent.
 
Section 2.11     Evidence of Debt .  (a)   Records of Lenders .  Each Lender shall maintain in accordance with its usual practice accounts evidencing Indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.  In addition, each Lender having sold a participation in any of its Obligations or having identified an SPV as such to the Administrative Agent, acting as agent of the Borrower solely for this purpose and solely for tax purposes, shall establish and maintain at its address referred to in Section 11.11 (or at such other address as such Lender shall notify the Borrower) a record of ownership (the " Synthetic Register "), in which such Lender shall register by book entry (i) the name and address of each such participant and SPV (and each change thereto, whether by assignment or otherwise) and (ii) the rights, interest or obligation of each such participant and SPV in any Obligation, in any Commitment and in any right to receive any payment hereunder.
 
(b)     Records of Administrative Agent .  The Administrative Agent, acting as agent of the Borrower solely for tax purposes and solely with respect to the actions described in this Section 2.11 , shall establish and maintain at its address referred to in Section 11.11 (or at such other address as the Administrative Agent may notify the Borrower) (i) a record of ownership (the " Register ") in which the Administrative Agent agrees to register by book entry the interests (including any rights to receive payment hereunder) of the Administrative Agent, and each Lender in the Loans, and any assignment of any such interest, obligation or right and (ii) accounts in the Register in accordance with its usual practice in which it shall record (A) the names and addresses of the Lenders (and each change thereto pursuant to Section 2.15 and Section 11.2 ), (B) the Commitments of each Lender, (C) the amount of each Loan and each funding of any participation described in clause (b)(i) above and for Eurodollar Rate Loans, the Interest Period applicable thereto, (D) the amount of any principal or interest due and payable or paid, and (E) any other payment received by the Administrative Agent from the Borrower and its application to the Obligations.
 
(c)     Registered Obligations .  Notwithstanding anything to the contrary contained in this Agreement, the Loans (including any Notes evidencing such Loans) are registered obligations, the right, title and interest of the Lenders and their assignees in and to such Loans shall be transferable only upon notation of such transfer in the Register or the Synthetic Register and no assignment thereof shall be effective until recorded therein.  This Section 2.11 and Section 11.2 shall be construed so that the Loans are at all times maintained in " registered form " within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related regulations (and any successor provisions).
 
(d)     Prima Facie Evidence .  The entries made in the Register and in the accounts maintained pursuant to clauses (a) and (b) above shall, to the extent permitted by applicable Requirements of Law, be prima facie evidence of the existence and amounts of the obligations recorded therein; provided , however , that no error in such account and no failure of any Lender or the Administrative Agent to maintain any such account shall affect the obligations of any Loan Party to repay the Loans in accordance with their terms.  In addition, the Loan Parties, the
 

 
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Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register as a Lender for all purposes of this Agreement.  Information contained in the Register with respect to any Lender shall be available for access by the Administrative Agent or such Lender at any reasonable time and from time to time upon reasonable prior notice.  No Lender shall, in such capacity, have access to or be otherwise permitted to review any information in the Register other than information with respect to such Lender unless otherwise agreed by the Administrative Agent.
 
(e)     Notes .  Upon any Lender's request, the Borrower shall promptly execute and deliver Notes to such Lender evidencing the Loans of such Lender and substantially in the form of Exhibit B-1 , Exhibit B-2 or Exhibit B-3 , as applicable; provided , however , that only one Note shall be issued to each Revolving Loan Lender, each Term Loan Lender with an Initial Advance Term Loan Commitment and each Term Loan Lender with a Delayed Draw Term Loan Commitment, except (i) to an existing Lender exchanging existing Notes to reflect changes in the Register relating to such Lender, in which case the new Notes delivered to such Lender shall be dated the date of the original Notes and (ii) in the case of loss, destruction or mutilation of existing Notes and similar circumstances.  Each Note, if issued, shall only be issued as means to evidence the right, title or interest of a Lender or a registered assignee in and to the related Loan, as set forth in the Register, and in no event shall any Note be considered a bearer instrument or obligation.
 
Section 2.12     Suspension of Eurodollar Rate Option .  Notwithstanding any provision to the contrary in this Article II , the following shall apply:
 
(a)     Interest Rate Unascertainable, Inadequate or Unfair .  In the event that (A) the Administrative Agent determines that adequate and fair means do not exist for ascertaining the applicable interest rates by reference to which the Eurodollar Rate is determined or (B) the Required Lenders notify the Administrative Agent that the Eurodollar Rate for any Interest Period will not adequately reflect the cost to the Lenders of making or maintaining such Loans for such Interest Period, the Administrative Agent shall promptly so notify the Borrower and the Lenders, whereupon the obligation of each Lender to make or to continue Eurodollar Rate Loans shall be suspended as provided in clause (c) below until the Administrative Agent shall notify the Borrower that the Required Lenders have determined that the circumstances causing such suspension no longer exist.  The Administrative Agent and the Lenders shall promptly so notify the Borrower once such circumstances no longer exist; provided that the Administrative Agent shall not be liable for any failure to give such notice.
 
(b)     Illegality .  If any Lender determines that the introduction of, or any change in or in the interpretation of, any Requirement of Law after the date of this Agreement shall make it unlawful, or any Governmental Authority shall assert that it is unlawful, for any Lender or its applicable lending office to make Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent, the obligation of such Lender to make or to continue Eurodollar Rate Loans shall be suspended as provided in clause (c) below until such Lender shall, through the Administrative Agent, notify the Borrower that it has determined that it may lawfully make Eurodollar Rate Loans.  The Administrative Agent and each such Lender
 

 
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shall promptly so notify the Borrower once such circumstances no longer exist; provided that the Administrative Agent shall not be liable for any failure to give such notice.
 
(c)     Effect of Suspension .  If the obligation of any Lender to make or to continue Eurodollar Rate Loans is suspended, (A) the obligation of such Lender to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended, (B) such Lender shall make a Base Rate Loan at any time such Lender would otherwise be obligated to make a Eurodollar Rate Loan, (C) the Borrower may revoke any pending Notice of Borrowing or Notice of Conversion or Continuation to make or continue any Eurodollar Rate Loan or to convert any Base Rate Loan into a Eurodollar Rate Loan and (D) each Eurodollar Rate Loan of such Lender shall automatically and immediately (or, in the case of any suspension pursuant to clause (a) above, on the last day of the current Interest Period thereof) be converted into a Base Rate Loan.
 
Section 2.13     Breakage Costs; Increased Costs; Capital Requirements .  (a)   Breakage Costs .  The Borrower shall compensate each Lender, upon demand from such Lender to such Borrower (with copy to the Administrative Agent), for all Liabilities (including, in each case, those incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to prepare to fund, to fund or to maintain the Eurodollar Rate Loans of such Lender to the Borrower but excluding any loss of the Applicable Margin on the relevant Loans) that such Lender may incur (A) to the extent, for any reason other than solely by reason of such Lender being a Defaulting Lender, a proposed Borrowing, conversion into or continuation of Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of Borrowing or a Notice of Conversion or Continuation or in a similar request made by telephone by the Borrower, (B) to the extent any Eurodollar Rate Loan is paid (whether through a scheduled, optional or mandatory prepayment) or converted to a Base Rate Loan (including because of Section 2.12 ) on a date that is not the last day of the applicable Interest Period or (C) as a consequence of any failure by the Borrower to repay Eurodollar Rate Loans when required by the terms hereof.  For purposes of this clause (a) , each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it using a matching deposit or other borrowing in the London interbank market.
 
(b)     Increased Costs .  If at any time any Lender determines that the adoption of, after the date hereof, or any change, after the date hereof, in or in the interpretation, application or administration of any Requirement of Law (other than any imposition or increase of Eurodollar Reserve Requirements) from any Governmental Authority, or compliance with any such adoption of or any change in, or in the interpretation, application or administration of, any such Requirement of Law shall have the effect of (i) increasing the cost to such Lender of making, funding or maintaining any Eurodollar Rate Loan or to agree to do so or of participating, or agreeing to participate, in extensions of credit, (ii) causing any Lender to be subject to any Taxes that are the responsibility of the Borrower under Section 2.14 , or (iii) imposing any other cost to such Lender with respect to compliance with its obligations under any Loan Document, then, upon demand by such Lender (with copy to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the account of such Lender amounts sufficient to compensate such Lender for such increased cost.  Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign
 

 
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regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to have been introduced and enacted after the date hereof, regardless of the actual date of introduction, adoption or issuance.
 
(c)     Increased Capital Requirements .  If at any time any Lender determines that the adoption of, after the date hereof, or any change, after the date hereof, in or in the interpretation, application or administration of any Requirement of Law (other than any imposition or increase of Eurodollar Reserve Requirements) from any Governmental Authority, or compliance with any such adoption of or any change in, or in the interpretation, application or administration of, any such Requirement of Law, in each case, regarding capital adequacy, reserves, special deposits, compulsory loans, insurance charges against property of, deposits with or for the account of, Obligations owing to, or other credit extended or participated in by, any Lender or any similar requirement (in each case other than any imposition or increase of Eurodollar Reserve Requirements) shall have the effect of reducing the rate of return on the capital of such Lender as a consequence of its obligations under or with respect to any Loan Document to a level below that which, taking into account the capital adequacy policies of such Lender, such Lender could have achieved but for such adoption or change, then, upon demand from time to time by such Lender (with a copy of such demand to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the account of such Lender amounts sufficient to compensate such Lender for such reduction.  Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to have been introduced and enacted after the date hereof, regardless of the actual date of introduction, adoption or issuance.
 
(d)     Compensation Certificate .  Each demand for compensation under this Section 2.13 shall be accompanied by a certificate of the Lender claiming such compensation, setting forth the amounts to be paid hereunder and stating that it is seeking such compensation from its borrowers generally, which certificate shall be conclusive, binding and final for all purposes, absent manifest error.  In determining such amount, such Lender may use any reasonable averaging and attribution methods.
 
Section 2.14     Taxes .  (a)   Payments Free and Clear of Taxes .  Except as otherwise provided in this Section 2.14 , each payment by any Loan Party under any Loan Document shall be made free and clear of all present or future taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto (and without deduction for any of them) (collectively, but excluding the taxes set forth in clauses (i) and (ii) below, the " Taxes ") other than for (i) taxes imposed on or measured by net income or profits (including branch profits taxes) and franchise taxes imposed in lieu of net income taxes (other than such taxes arising solely from a connection with the jurisdiction of the Governmental Authority imposing such tax (or any political subdivision or taxing authority thereof or therein) arising solely from any Secured Party having executed, delivered or performed its obligations or received a payment under, or enforced, any Loan Document) or (ii) taxes that are directly attributable to the failure (other than as a result of a change in any Requirement of Law) by any Secured Party to deliver
 

 
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the documentation required to be delivered pursuant to clause (f) below or (iii) taxes imposed under FATCA.
 
(b)     Gross-Up .  If any Taxes shall be required by law to be deducted from or in respect of any amount payable under any Loan Document to any Secured Party (i) such amount shall be increased as necessary to ensure that, after all required deductions for Taxes are made (including deductions applicable to any increases to any amount under this Section 2.14 ), such Secured Party receives the amount it would have received had no such deductions been made, (ii) the relevant Loan Party shall make such deductions, (iii) the relevant Loan Party shall timely pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable Requirements of Law and (iv) within 30 days after such payment is made, the relevant Loan Party shall deliver to the Administrative Agent an original or certified copy of a receipt evidencing or other evidence reasonably satisfactory to the Administrative Agent of such payment; provided , however , that no such increase shall be made with respect to, and no Loan Party shall be required to indemnify any such Secured Party pursuant to clause (d) below for, withholding taxes to the extent that the obligation to withhold amounts existed on the date that such Secured Party became a "Secured Party" under this Agreement in the capacity under which such Secured Party makes a claim under this clause (b) , except in each case to the extent such Secured Party is a direct or indirect assignee (other than pursuant to Section 2.15 ) of any other Secured Party that was entitled, at the time the assignment of such other Secured Party became effective, to receive additional amounts under this clause (b) .
 
(c)     Other Taxes .  In addition, the Borrower agrees to pay, and authorizes the Administrative Agent to pay in its name, any stamp, documentary, excise or property tax, charges or similar levies imposed by any applicable Requirement of Law or Governmental Authority and all Liabilities with respect thereto (including by reason of any delay in payment thereof), in each case arising from the execution, delivery or registration of, or otherwise with respect to, any Loan Document or any transaction contemplated therein (collectively, " Other Taxes ").  Within 30 days after the date of any payment of Taxes or Other Taxes by any Loan Party, the Borrower shall furnish to the Administrative Agent, at its address referred to in Section 11.11 , the original or a certified copy of a receipt evidencing or other evidence reasonably satisfactory to the Administrative Agent of payment thereof.
 
(d)     Indemnification .  The Borrower or any other Loan Party on Borrower's behalf shall reimburse and indemnify, within 30 days after receipt of demand therefor (with copy to the Administrative Agent), each Secured Party for all Taxes and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.14 ) paid by such Secured Party and any Liabilities arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  A certificate of the Secured Party (or of the Administrative Agent on behalf of such Secured Party) claiming any compensation under this clause (d) , setting forth the amounts to be paid thereunder and delivered to the Borrower with copy to the Administrative Agent, shall be conclusive, binding and final for all purposes, absent manifest error; provided , that such Secured Party shall reasonably cooperate with the Borrower, at Borrower's expense, in contesting any such Taxes or Other Taxes that the Borrower determines in good faith to have not been correctly or legally asserted.  In determining such amount, the Administrative Agent and such Secured Party may use any reasonable averaging and attribution methods.  Each Lender shall, and does hereby, indemnify the
 

 
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Administrative Agent, and shall make payment in respect thereof within 30 days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Agent) incurred by or asserted against the Administrative Agent by any Governmental Authority as a result of the failure by such Lender to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender to the Borrower or the Administrative Agent pursuant to subsection (f) and each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document against any amount due to the Administrative Agent under this sentence (it being understood that such a setoff shall not increase the liability of any Loan Party under this Agreement). The Borrower shall also, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required by the preceding sentence.
 
(e)     Mitigation .  Any Lender claiming any additional amounts payable pursuant to this Section 2.14 shall use its reasonable efforts (consistent with its internal policies and Requirements of Law) to change the jurisdiction of its lending office if such a change would reduce any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the sole determination of such Lender, be otherwise disadvantageous to such Lender or subject such Lender to any unreimbursed cost.
 
(f)     Tax Forms .  (i)  Each Non-U.S. Lender Party shall (w) on or prior to the date such Non-U.S. Lender Party becomes a "Non-U.S. Lender Party" hereunder, (x) on or prior to the date on which any such form or certification expires or becomes obsolete, (y) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (i) and (z) from time to time if requested by the Borrower or the Administrative Agent (or, in the case of a participant or SPV, the relevant Lender), provide the Administrative Agent and the Borrower (or, in the case of a participant or SPV, the relevant Lender) with two completed originals of each of the following, as applicable:  (A) Forms W-8ECI (claiming complete exemption from U.S. withholding tax because the income is effectively connected with a U.S. trade or business), W-8BEN (claiming a complete or partial exemption from U.S. withholding tax under an income tax treaty) or any successor forms, (B) in the case of a Non-U.S. Lender Party claiming exemption under Sections 871(h) or 881(c) of the Code, Form W-8BEN (claiming exemption from U.S. withholding tax under the portfolio interest exemption) or any successor form and a certificate in form and substance acceptable to the Administrative Agent that such Non-U.S. Lender Party is not (1) a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (2) a "10 percent shareholder" of the Borrower within the meaning of Section 881(c)(3)(B) of the Code or (3) a "controlled foreign corporation" described in Section 881(c)(3)(C) of the Code or (C) any other applicable document prescribed by the IRS certifying as to the entitlement of such Non-U.S. Lender Party to such exemption from United States withholding tax with respect to all payments to be made to such Non-U.S. Lender Party under the Loan Documents.  Unless the Borrower and the Administrative Agent have received forms or other documents satisfactory to them indicating that payments under any Loan Document to or for a Non-U.S. Lender Party are not subject to a United States withholding tax, the Loan Parties and the Administrative Agent shall withhold amounts required to be withheld by applicable Requirements of Law from such payments at the applicable statutory rate, and the relevant Loan
 

 
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Party shall not be obligated pursuant to clause (b) to gross-up payments to be made to such Non-U.S. Lender Party in respect of income or similar taxes imposed by the United States or pursuant to clause (d) to indemnify such Non-U.S. Lender Party in respect thereto; provided , however , that a Non-U.S. Lender Party shall not be obligated to deliver such forms if after the date it becomes a Non-U.S. Lender Party it no longer legally qualifies for an exemption from or a reduction in Tax; and, provided , further , that the relevant Loan Party will be obligated to gross-up payments to such Non-U.S. Lender Party only if the reason for such Non-U.S. Lender Party's inability to claim an exemption (or a full exemption) from or reduction in Tax results from a change in a Requirement of Law arising after it becomes a Non-U.S. Lender Party.
 
(ii)     Each U.S. Lender Party shall (A) on or prior to the date such U.S. Lender Party becomes a "U.S. Lender Party" hereunder, (B) on or prior to the date on which any such form or certification expires or becomes obsolete, (C) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (f) and (D) from time to time if requested by the Borrower or the Administrative Agent (or, in the case of a participant or SPV, the relevant Lender), provide the Administrative Agent and the Borrower (or, in the case of a participant or SPV, the relevant Lender) with two completed originals of Form W-9 (certifying that such U.S. Lender Party is entitled to an exemption from U.S. backup withholding tax) or any successor form.
 
(iii)     Each Lender having sold a participation in any of its Obligations or identified an SPV as such to the Administrative Agent shall collect from such participant or SPV the documents described in this clause (f) and provide them to the Administrative Agent.
 
(iv)     If a payment made to a Lender hereunder or under any Loan Document would be subject to United States Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (e.g., because the Revolving Loans or the Term Loans are not treated as grandfathered obligations under FATCA), such Lender shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by Requirements of Law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such documentation prescribed by applicable Requirements of Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower or the Administrative Agent to comply with its obligations under FATCA, to determine that such Lender has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (iv) FATCA shall include any amendments to FATCA made after the date of this Agreement.
 
(g)     Refunds . If the Administrative Agent or a Lender determines in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or any Loan Party or with respect to which the Borrower or any Loan Party has paid additional amounts pursuant to this Section, it shall pay over to the Borrower (or the appropriate Loan Party) an amount equal to such refund (but only to the extent of indemnity
 

 
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payments made, or additional amounts paid, by the Borrower or any Loan Party under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided , that the Borrower (or the appropriate Loan Party), upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (or the appropriate Loan Party) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.
 
(h)     Survival of Section 2.14 .  The agreements in this Section 2.14 shall survive the resignation and/or the replacement of the Administrative Agent, and any assignment of its rights by, or the replacement of a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.
 
Section 2.15     Substitution of Lenders .  (a)   Substitution Right .  In the event that any Lender (an " Affected Lender "), (i) makes a claim under clause (b) or (c) of Section 2.13 , (ii) notifies the Administrative Agent pursuant to Section 2.12(b) that it becomes illegal for such Lender to continue to fund or make any Eurodollar Rate Loan, (iii) makes a claim for payment pursuant to Section 2.14(b) , (iv) becomes a Defaulting Lender or (v) does not consent to any amendment, waiver or consent to any Loan Document for which the consent of the Required Lenders is obtained but that requires the consent of other Lenders, the Borrower may either pay in full such Affected Lender with respect to amounts due with the consent of the Administrative Agent or substitute for such Affected Lender any Lender or any Affiliate or Approved Fund of any Lender or any other Person acceptable (which acceptance shall not be unreasonably withheld or delayed) to the Administrative Agent (in each case, a " Substitute Lender "); provided that , in the case of a Lender that makes a claim for payment under Section 2.14(b) , such substitution will result in a reduction of such compensation.
 
(b)     Procedure .  To substitute such Affected Lender or pay in full the Obligations owed to such Affected Lender, the Borrower shall deliver a notice to the Administrative Agent and such Affected Lender.  The effectiveness of such payment or substitution shall be subject to the delivery to the Administrative Agent by the Borrower (or, as may be applicable in the case of a substitution, by the Substitute Lender) of (i) payment for the account of such Affected Lender, of, to the extent accrued through, and outstanding on, the effective date for such payment or substitution, all Obligations owing to such Affected Lender (including those that will be owed because of such payment and all Obligations that would be owed to such Lender if it was solely a Lender) and (ii) in the case of a substitution, (A) payment of the assignment fee set forth in Section 11.2(c) and (B) an Assignment whereby the Substitute Lender shall, among other things, agree to be bound by the terms of the Loan Documents and assume the Loans of the Affected Lender.
 
(c)     Effectiveness .  Upon satisfaction of the conditions set forth in clause (b) above, the Administrative Agent shall record such substitution or payment in the Register, whereupon
 

 
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(i) the Affected Lender shall sell and be relieved of, and the Substitute Lender shall purchase and assume, all rights and claims of such Affected Lender under the Loan Documents, except that the Affected Lender shall retain such rights expressly providing that they survive the repayment of the Obligations, (ii) the Substitute Lender shall become a " Lender " hereunder holding the outstanding Loans of such Affected Lender and (iii) the Affected Lender shall execute and deliver to the Administrative Agent an Assignment to evidence such substitution and deliver any Note in its possession; provided , however , that the failure of any Affected Lender to execute any such Assignment or deliver any such Note shall not render such sale and purchase (or the corresponding assignment) invalid.
 
Section 2.16     Conversion of Revolving Loans to Delayed Draw Term Loans .  On the Revolving Loan Conversion Date (after giving effect to the application of funds made pursuant to Section 4.4 or 4.5 of the Multiparty Agreement, as applicable), all outstanding Revolving Loans shall be automatically converted to Delayed Draw Term Loans for purposes hereof and subject to the terms and conditions applicable to all other Delayed Draw Term Loans, and all Revolving Loan Lenders holding such Revolving Loans shall be deemed to be Delayed Draw Term Loan Lenders for purposes hereof.  The Borrower agrees to pay any and all costs and expenses of such Revolving Lenders (including amounts required under Section 2.13(a) ) as a result of any such conversion.
 
Section 2.17     Defaulting Lender Adjustments .  (a) Notwithstanding anything to the contrary contained in this Agreement, if any Delayed Draw Term Loan Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
 
(i)     the unused portion of such Defaulting Lender's Delayed Draw Term Loan Commitment will, subject to the proviso below, automatically be reallocated (effective on the day such Delayed Draw Term Loan Lender becomes a Defaulting Lender) among the Delayed Draw Term Loan Lenders that are Non-Defaulting Lenders (each, a " Non-Defaulting DDTL Lender ") pro rata in accordance with their respective Delayed Draw Term Loan Commitments; provided that (A) the sum of each Non-Defaulting DDTL Lender's total amount of Delayed Draw Term Loans outstanding after giving effect thereto may not in any event exceed the Delayed Draw Term Loan Commitment of such Non-Defaulting DDTL Lender as in effect at the time of such reallocation and (B) neither such reallocation nor any payment by a Non-Defaulting DDTL Lender pursuant thereto will constitute a waiver or release of any claim the Borrower, the Administrative Agent or any other Delayed Draw Term Loan Lender may have against such Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender;
 
(ii)     no Defaulting Lender shall be entitled to receive any fee payable pursuant to Section 2.8(b) or Section 2.8(c) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender); and
 
(iii)     any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.8 shall be applied at such time or times
 

 
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as may be determined by the Administrative Agent as follows: first , to the ratable payment of any amounts owing by such Defaulting Lender to the Agents hereunder; second , as the Borrower may request (so long as no Default exists), to the funding of any Delayed Draw Term Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third , if so determined by the Administrative Agent and the Borrower, to be held in the DDTL Escrow Account and released pro rata in order to satisfy such Defaulting Lender's potential future funding obligations with respect to Delayed Draw Term Loans under this Agreement; fourth ,   to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; fifth , so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; sixth , to the Non-Defaulting DDTL Lenders on a pro rata basis as payment for the Delayed Draw Term Loans held by such Non-Defaulting DDTL Lenders to the extent necessary to cause all Delayed Draw Term Loans held by the Delayed Draw Term Loan Lenders to be held by the Delayed Draw Term Loan Lenders pro rata in accordance with the Delayed Draw Term Loan Commitments without giving effect to any reallocations or adjustments pursuant to clause (i) above; and seventh , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this clause (iii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
 
(b)     Defaulting Lender Cure .  If the Borrower and the Administrative Agent agree in writing in their discretion that a Delayed Draw Term Loan Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any DDTL Cash Collateral), that Delayed Draw Term Loan Lender will, to the extent applicable, purchase at par that portion of outstanding Delayed Draw Term Loans of the other Delayed Draw Term Loan Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Delayed Draw Term Loans to be held pro rata by the Delayed Draw Term Loan Lenders in accordance with the Delayed Draw Term Loan Commitments (without giving effect to Section 2.17(a)(i) ), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Delayed Draw Term Loan Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender.
 
Section 2.18     Increase in Delayed Draw Term Loan Facility .
 
(a)     Request for Increase . Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Delayed Draw Term  Loan Lenders), the Borrower may on a one-time basis at any time thirty (30) days prior to the DDTL Termination Date, request an increase in the Delayed Draw Term Loan Commitments by an aggregate
 

 
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amount not exceeding $22,500,000 on the same terms and conditions as are then applicable to the Delayed Draw Term Loan Commitments (a " DDTL Increase "); provided that, any such request for a DDTL Increase shall be in a minimum amount of $8,500,000.  At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Delayed Draw Term Loan Lender is required to respond (which shall in no event be less than thirty days from the date of delivery of such notice to the Delayed Draw Term Loan Lenders).
 
(b)     Lender Elections to Increase .  Each Delayed Draw Term Loan Lender shall notify the Administrative Agent within the time period set forth in the Borrower's notice for a DDTL Increase whether or not it agrees to increase its Delayed Draw Term Loan Commitment and, if so, whether by an amount equal to, greater than, or less than its ratable portion (based on such Delayed Draw Term Loan Lender's Pro Rata Share in respect of the Delayed Draw Term Loan Facility) of such requested DDTL Increase.  Any Delayed Draw Term Loan Lender not responding within such time period shall be deemed to have declined to increase its Delayed Draw Term Loan Commitment.
 
(c)     Notification by Administrative Agent; Additional Delayed Draw Term Loan Lenders .  The Administrative Agent shall notify the Borrower and each Delayed Draw Term Loan Lender of the Delayed Draw Term Loan Lenders' responses to each request made hereunder.  To achieve the full amount of a requested DDTL Increase, and subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld), the Borrower may invite additional Eligible Assignees to become Delayed Draw Term Loan Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.
 
(d)     Effective Date and Allocations .  If the Delayed Draw Term Loan Commitments are increased in accordance with this Section 2.18 , the Administrative Agent and the Borrower shall determine the effective date, which shall not be later than the DDTL Termination Date (such effective date, the " DDTL Increase Effective Date ") and the final allocation of such DDTL Increase.  The Administrative Agent shall promptly notify the Borrower and the Delayed Draw Term Loan Lenders of the final allocation of such DDTL Increase and the DDTL Increase Effective Date.
 
(e)     Conditions to Effectiveness of Increase .  As a condition precedent to any such DDTL Increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the DDTL Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such DDTL Increase, and (ii) in the case of the Borrower, certifying that, before and after giving effect to such DDTL Increase, (A) the representations and warranties contained in Article IV and the other Loan Documents are true and correct on and as of the DDTL Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, (B) at the time of and after giving effect on a pro forma basis to such DDTL Increase and any borrowings made on the DDTL Increase Effective Date, the Borrower is in compliance with all covenants set forth in Article V as of both the DDTL Increase Effective Date and the end of the most recent Fiscal Quarter for which financial statements of the
 

 
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Borrower are available and (C) no Default exists or would exist as a result of such DDTL Increase and any borrowings made on the DDTL Increase Effective Date.  The additional Delayed Draw Term Loans shall be made by the Delayed Draw Term Loan Lenders participating therein pursuant to the procedures set forth in Section 2.1(b) .
 
(f)     Conflicting Provisions .  This Section shall supersede any provisions in Section 11.1 to the contrary.  Each of the parties hereto hereby agrees that the Administrative Agent may take any and all action as may be reasonable or necessary to ensure that all Delayed Draw Term Loans made pursuant to any DDTL Increase, when originally made, are included in each Borrowing of outstanding Delayed Draw Term Loans on a pro rata basis.  The Borrower agrees that Section 2.13(a) shall apply to any conversion of Eurodollar Rate Loans to Base Rate Loans reasonably required to effect the foregoing.
 
Section 2.19     Debt Service Reserve and Debt Service Reserve Account .  On any Interest Payment Date or Payment Date when no Event of Default has occurred and is continuing, the Administrative Agent may cause the Debt Service Reserve Account to be debited for the purpose of paying interest (other than Accrued Default Interest) and principal to the extent amounts then on deposit in the Debt Service Account or otherwise available are insufficient to make such payments that are then due and payable.  During the continuance of an Event of Default, the Administrative Agent may or, at the request of the Required Lenders, shall, cause the Debt Service Reserve Account to be debited for the purpose of paying interest and principal then due and payable to the extent amounts then on deposit in the Debt Service Account or otherwise available are insufficient to pay such amounts.  Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent, on behalf of the Lenders, shall have recourse to the amounts in the Debt Service Reserve Account, if any, for (a) the payment of the principal of the Loans on the Maturity Date (or such earlier date on which the Loans become due and payable pursuant to Section 9.2 of this Agreement) and (b) the payment in full of all other Obligations on the Maturity Date or during the continuance of an Event of Default.
 
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LOANS
 
Section 3.1     Conditions Precedent to Effectiveness .  The effectiveness of this Agreement and the other Loan Documents are subject to the satisfaction (or due waiver in accordance with Section 11.1 ) of each of the conditions precedent set forth on Schedule 3.1 .  For purposes of determining compliance with the conditions specified in Schedule 3.1 , each Lender shall be deemed to be satisfied with each document and each other matter required to be satisfactory to such Lender upon delivery of its executed signature page to this Agreement to the Administrative Agent unless, prior to the Effective Date, the Administrative Agent receives written notice from such Lender specifying such Lender's objections.
 
Section 3.2     Conditions Precedent to Term Loans .  Except as otherwise provided in Section 3.3 below, the obligations of (a) the Lenders to make Term Loans or (b) the Administrative Agent to release funds in the DDTL Escrow Account on any Funding Date (including the Loans comprising the initial Borrowing on the Initial Funding Date) are subject to the concurrent or prior occurrence of the Effective Date and the satisfaction (or due waiver in
 

 
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accordance with Section 11.1 ) of the conditions precedent set forth on Schedule 3.2 on or before such Funding Date.  For purposes of determining compliance with the conditions specified in Schedule 3.2 , each Lender shall be deemed to be satisfied with each document and each other matter required to be satisfactory to such Lender unless, prior to such Funding Date, the Administrative Agent receives written notice from such Lender specifying such Lender's objections.
 
Section 3.3     Conditions Precedent to DDTL Termination Date Funding .  The obligations of the Delayed Draw Term Loan Lenders to make the DDTL Termination Date Funding on the DDTL Termination Date are subject to the concurrent or prior occurrence of the Effective Date and the satisfaction (or due waiver in accordance with Section 11.1 ) on or before the DDTL Termination Date of the conditions precedent set forth on Schedule 3.3 .   For purposes of determining compliance with the conditions specified in Schedule 3.3 , each Delayed Draw Term Loan Lender shall be deemed to be satisfied with each document and each other matter required to be satisfactory to such Lender unless, prior to the DDTL Termination Date, the Administrative Agent receives written notice from such Lender specifying such Lender's objections.
 
Section 3.4     Conditions Precedent to Revolving Loans .  The obligations of the Revolving Loan Lenders to make Revolving Loans on any Funding Date are subject to (a) the concurrent or prior occurrence of the Effective Date, (b) the concurrent or prior funding of the Initial Advance Term Loan and (c) the satisfaction (or due waiver in accordance with Section 11.1 ) on or before such Funding Date of the following conditions precedent:
 
(i)     Notice of Borrowing .  To the extent required by Article II , the Administrative Agent shall have received a written, timely and duly executed and completed Notice of Borrowing;
 
(ii)     Representations; No Default Certificate .  The Administrative Agent shall have received a certificate of the President, Chief Executive Officer or Chief Financial Officer of the Borrower certifying that as of the Funding Date and before and after giving effect to the proposed Borrowing: (A) the representations and warranties of the Loan Parties set forth in any Loan Document shall be true and correct on and as of such date, (B) no Default has occurred and is continuing and (C) all conditions precedent to such proposed Borrowing (including availability restrictions) have been satisfied or will be satisfied substantially concurrently with the funding of the proposed Borrowing; and
 
(iii)     Fees and Expenses .  All fees due and payable with respect to such Borrowing and all reimbursements of costs or expenses, in each case, due and payable under any Loan Document as of such Funding Date and invoiced prior to such Funding Date shall have been paid to the Administrative Agent for the account of the applicable Person (or shall be paid to the Administrative Agent substantially concurrently with the funding of the Revolving Loans made on such Funding Date (including out of the proceeds of such Revolving Loans)) except to the extent, in the case of such costs or expenses owing as of the Initial Funding Date, arrangements satisfactory to the parties
 

 
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entitled to payment thereof shall have been made for payment or reimbursement of any such costs or expenses permitted to be made after the Effective Date.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
 
To induce the Lenders and the Agents to enter into the Loan Documents, the Borrower (and, to the extent set forth in any other Loan Document, each other Loan Party) represents and warrants to each of them each of the following on and as of (a) the Effective Date, (b) each Funding Date and (c) the date of any DDTL Termination Date Funding:
 
Section 4.1     Corporate Existence; Compliance with Law .  Each of Parent Holdings, Holdings and each Group Member (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) is duly qualified to do business as a foreign entity and in good standing under the laws of each jurisdiction where such qualification is necessary, except where the failure to be so qualified or in good standing would not, in the aggregate, have a Material Adverse Effect, (c) has all requisite power and authority and the legal right to own, pledge, mortgage and operate its property, to lease or sublease any property it operates under lease or sublease and to conduct its business as now or currently proposed to be conducted, (d) is in compliance with its Constituent Documents, (e) is in compliance with all applicable Requirements of Law except where the failure to be in compliance would not have a Material Adverse Effect and (f) has all necessary Permits from or by, has made all necessary filings with, and has given all necessary notices to, each Governmental Authority having jurisdiction, to the extent required for such ownership, lease, sublease, operation, occupation or conduct of its business, except where the failure to obtain such Permits, make such filings or give such notices would not, in the aggregate, have a Material Adverse Effect.
 
Section 4.2     Power and Authority; No Conflicts; Due Execution, Delivery and Enforceability .  (a)   Power and Authority; No Conflicts .  The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party and the consummation of the transactions contemplated therein (i) are within such Loan Party's corporate or similar powers and, at the time of execution thereof, have been duly authorized by all necessary corporate or similar action (including, if applicable, consent of holders of its Securities), (ii) do not (A) contravene such Loan Party's Constituent Documents, (B) violate any applicable Requirement of Law, (C) conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material Contractual Obligation of any Loan Party or any of its Subsidiaries (including other Loan Documents) other than those that (1) would not, in the aggregate, have a Material Adverse Effect and (2) are not created or caused by, or a conflict, breach, default or termination or acceleration event under, any Loan Document or (D) result in the imposition of any Lien (other than a Permitted Lien) upon any property of any Loan Party or any of its Subsidiaries and (iii) do not require any Permit of, or filing with, any Governmental Authority or any consent of, or notice to, any Person, other than (A) with respect to the Loan Documents, the filings required to perfect the Liens created by the Loan Documents and (B) those listed on Schedule 4.2 and that have been, or will be prior to the Effective Date, the applicable Funding Date or the date of any DDTL Termination Date Funding, obtained or made, copies of which have been, or will be prior to the Effective Date, the applicable Funding Date or the date of any DDTL Termination Date Funding, delivered to the
 

 
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Administrative Agent, and each of which on the Effective Date, the applicable Funding Date or the date of any DDTL Termination Date Funding will be in full force and effect.
 
(b)     Due Execution, Delivery and Enforceability .  From and after its delivery to the Administrative Agent, each Loan Document (i) has been duly executed and delivered to the other parties thereto by each Loan Party party thereto and (ii) is the legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and the effects of general principles of equity.
 
Section 4.3     Ownership of each Loan Party and Subsidiaries of Group Members .  Set forth on Schedule 4.3 is a complete and accurate list showing for each Loan Party and each Subsidiary of any Group Member and each joint venture of any of them, as of the Effective Date its jurisdiction of organization, the number of shares of each class of Stock authorized (if applicable), the number outstanding and the number and percentage of the outstanding shares of each such class owned (directly or indirectly) by the Borrower and, in the case of the Stock of the Borrower, Holdings and, in the case of the Stock of Holdings, Parent Holdings.  All outstanding Stock of each of them has been validly issued, is fully paid and non-assessable (to the extent applicable) and is owned beneficially and of record by a Group Member (or, in the case of the Borrower, by Holdings, or, in the case of Holdings, Parent Holdings) free and clear of all Liens other than the security interests created by the Loan Documents and non-consensual Permitted Liens.  There are no Stock Equivalents with respect to the Stock of any Loan Party or any Subsidiary of any Group Member or any joint venture of any of them as of the Effective Date, except as set forth on Schedule 4.3 .  Except as provided in the Constituent Documents delivered to the Administrative Agent on or prior to the Effective Date (as such Constituent Documents are amended in accordance with Section 8.11 ), there are no Contractual Obligations or other understandings to which Holdings, any Group Member, any Subsidiary of any Group Member or any joint venture of any of them is a party with respect to (including any restriction on) the issuance, voting, Sale or pledge of any Stock or Stock Equivalent of any Group Member or any such Subsidiary or joint venture.
 
Section 4.4     Financial Statements .  (a)  Each of the Initial Financial Statements (subject, in the case of clause (a) and (c) in the definition thereof, to the absence of footnote disclosure and normal recurring year-end audit adjustments) fairly present in all material respects the Consolidated financial position, results of operations and cash flow of Cinedigm and Holdings, as applicable, as at the date indicated and for the period indicated in accordance with GAAP.
 
(b)     On the Effective Date, (i) no Loan Party has any material liability or other obligation (including Indebtedness, Guaranty Obligations, contingent liabilities and liabilities for taxes, long-term leases and unusual forward or long-term commitments) that is not reflected in the Initial Financial Statements and not otherwise permitted by this Agreement and (ii) since the date of the Initial Financial Statements, there has been no Sale of any material property of the Group Members or Holdings and no purchase or other acquisition of any material property.
 
(c)     The Initial Projections have been prepared by Parent Holdings, in consultation with the Administrative Servicer, in light of the operations of the business of the Group Members
 

 
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and reflect projections for the 7 year period beginning on the Effective Date on a quarterly basis for the first year and on a year by year basis thereafter.  As of the Effective Date, the Initial Projections are based upon estimates and assumptions stated therein, all of which the Borrower believes to be reasonable and fair in light of conditions and facts known to such Persons as of the Effective Date and reflect the good faith, reasonable and fair estimates by such Persons of the future consolidated financial performance of the Group Members and the other information projected therein for the periods set forth therein.
 
Section 4.5     Material Adverse Effect .  Since March 31, 2011, there have been no events, circumstances, developments or other changes in facts that would, in the aggregate, have a Material Adverse Effect.
 
Section 4.6     Solvency .  Both before and after giving effect to (a) the Loans made on or prior to the date this representation and warranty is made, (b) the disbursement of the proceeds of such Loans and (c) the payment and accrual of all transaction costs in connection with the foregoing, each of the Loan Parties is Solvent.
 
Section 4.7     Litigation .  There are no pending (or, to the knowledge of any Group Member, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes affecting any Loan Party with, by or before any Governmental Authority other than those that (a) cannot reasonably be expected to affect the Obligations, the Loan Documents, the other transactions contemplated therein, any Digital Cinema Deployment Agreement, any Exhibitor Agreement, any Service Agreement or the Management Services Agreement and (b) would not have, individually or in the aggregate, a Material Adverse Effect.
 
Section 4.8     Taxes .  All federal and material state, local and foreign income and franchise and other tax returns, reports and statements (collectively, the " Tax Returns ") required to be filed by any Tax Affiliate have been filed with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax Returns are true and correct in all material respects, and all taxes, charges and other impositions reflected therein or otherwise due and payable have been paid prior to the date on which any Liability may be added thereto for non-payment thereof (except for those contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP).  No Tax Return is under audit or examination by any Governmental Authority and no notice of such an audit or examination or any assertion of any claim for taxes has been given or made by any Governmental Authority, except such audit, examination or claim as could not, if adversely determined, reasonably be expected to have a Material Adverse Effect.  Proper and accurate amounts have been withheld by each Tax Affiliate from their respective employees for all periods in full and complete compliance with the tax, social security and unemployment withholding provisions of applicable Requirements of Law and such withholdings have been timely paid to the respective Governmental Authorities.  No Tax Affiliate has participated in a "reportable transaction" within the meaning of Treasury Regulation Section 1.6011-4(b).  Except as set forth on Schedule 4.8 , no Tax Affiliate has been a member of an affiliated, combined or unitary group other than the group of which Cinedigm is the common parent.  Any Tax Affiliate that was a member of an affiliated, combined or unitary group other than the group of which Cinedigm is the common
 

 
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parent, is not liable for any unpaid taxes of such other group whether pursuant to Treasury Regulation Section 1.1502-6 or similar law, by contract or otherwise.
 
Section 4.9    Margin Regulations .  None of the Loan Parties is engaged in the business of extending credit for the purpose of, and no proceeds of any Loan or other extensions of credit hereunder will be used for the purpose of, buying or carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board) or extending credit to others for the purpose of purchasing or carrying any such margin stock, in each case in contravention of Regulation T, U or X of the Federal Reserve Board.
 
Section 4.10     No Burdensome Obligations; No Defaults .  No Loan Party is a party to any Contractual Obligation, no Loan Party has Constituent Documents containing obligations, and, to the knowledge of any Group Member, there are no applicable Requirements of Law, in each case the compliance with which would have, in the aggregate, a Material Adverse Effect.  No Loan Party (and, to the knowledge of each Group Member, no other party thereto) is in default under or with respect to any Contractual Obligation of any Loan Party, which Contractual Obligation is material to the operation of the Loan Party 's business and which default gives the applicable third party the right to terminate such Contractual Obligation.
 
Section 4.11     Investment Company Act .  No Loan Party is an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act of 1940.
 
Section 4.12     Labor Matters .  There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of any Group Member, threatened) against or involving any Group Member or Holdings, except for those that would not, in the aggregate, have a Material Adverse Effect.  As of the Effective Date, the applicable Funding Date or the date of any DDTL Termination Date Funding, (a) there is no collective bargaining or similar agreement with any union, labor organization, works council or similar representative covering any employee of any Group Member or Holdings, (b) no petition for certification or election of any such representative is existing or pending with respect to any employee of any Group Member or Holdings and (c) no such representative has sought certification or recognition with respect to any employee of any Group Member or Holdings.
 
Section 4.13     ERISA .   Schedule 4.13 sets forth, as of the Effective Date, a complete and correct list of, and that separately identifies, (a) all Title IV Plans, (b) all Multiemployer Plans and (c) all material Benefit Plans.  Each Benefit Plan, and each trust thereunder, intended to qualify for tax exempt status under Section 401   or 501 of the Code or other Requirements of Law so qualifies.  Except for those that would not, in the aggregate, have a Material Adverse Effect, (x) each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other Requirements of Law, (y) there are no existing or pending (or to the knowledge of any Group Member, threatened) claims (other than routine claims for benefits in the normal course), sanctions, actions, lawsuits or other proceedings or investigation involving any Benefit Plan to which any Group Member incurs or otherwise has or could have an obligation or any Liability and (z) no ERISA Event is reasonably expected to occur.  On the Effective Date, the applicable Funding Date or the date of any DDTL Termination Date Funding, no ERISA Event has occurred in connection with which obligations and liabilities (contingent or otherwise) remain
 

 
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outstanding.  Except for those that would not, in the aggregate, have a Material Adverse Effect, no ERISA Affiliate would have any Withdrawal Liability as a result of a complete withdrawal from any Multiemployer Plan on the date this representation is made.  No ERISA Affiliate has incurred any liability under Title IV of ERISA that remains outstanding (other than PBGC premiums due but not delinquent).
 
Section 4.14     Environmental Matters .  Except as set forth on Schedule 4.14 , (a) the operations of each Group Member or Holdings are and have been in compliance with all applicable Environmental Laws, including obtaining, maintaining and complying with all Permits required by any applicable Environmental Law, other than non-compliances that, in the aggregate, would not have a reasonable likelihood of resulting in Material Environmental Liabilities, (b) no Group Member or Holdings is party to, and no Group Member or Holdings and no real property currently (or to the knowledge of any Group Member previously) owned, leased, subleased, operated or otherwise occupied by or for any Group Member or Holdings is subject to or the subject of, any Contractual Obligation or any pending (or, to the knowledge of any Group Member, threatened) order, action, investigation, suit, proceeding, audit, claim, demand, dispute or notice of violation or of potential liability or similar notice under or pursuant to any Environmental Law other than those that, in the aggregate, are not reasonably likely to result in Material Environmental Liabilities, (c) no Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities has attached to any property of any Group Member or Holdings and, to the knowledge of each Group Member, no facts, circumstances or conditions exist that could reasonably be expected to result in any such Lien attaching to any such property, (d) no Group Member or Holdings has caused or suffered to occur a Release of Hazardous Materials at, to or from any real property of any Group Member or Holdings and each such real property is free of contamination by any Hazardous Materials except for such Release or contamination that could not reasonably be expected to result, in the aggregate, in Material Environmental Liabilities, (e) no Group Member or Holdings (i) is or has been engaged in, or has permitted any current or former tenant to engage in, operations, or (ii) knows of any facts, circumstances or conditions, including receipt of any information request or notice of potential responsibility under CERCLA or other Environmental Laws, that, in the aggregate, would have a reasonable likelihood of resulting in Material Environmental Liabilities and (f) each Group Member or Holdings has made available to the Administrative Agent copies of all existing environmental reports, reviews and audits and all documents pertaining to actual or potential Environmental Liabilities, in each case to the extent such reports, reviews, audits and documents are in their possession, custody or control.
 
Section 4.15     Intellectual Property .  Each Loan Party owns or licenses all material Intellectual Property that is necessary for the operations of its business.  To the knowledge of each Group Member, (a) the conduct and operation of the business of each Loan Party does not infringe, misappropriate, dilute, violate or otherwise impair any Intellectual Property owned by any other Person and (b) no other Person has contested any right, title or interest of any Loan Party in, or relating to, any Intellectual Property, other than, in each case, as would not, in the aggregate, have a Material Adverse Effect.  In addition, (x) there are no pending (or, to the knowledge of any Group Member, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes affecting any Loan Party with respect to, (y) no judgment or order regarding any such claim has been rendered by any competent Governmental Authority, no settlement agreement or similar Contractual Obligation has been entered into by any Loan Party,
 

 
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with respect to and (z) no Group Member knows or has any reason to know of any valid basis for any claim based on, any such infringement, misappropriation, dilution, violation or impairment or contest, other than, in each case, as would not, in the aggregate, have a Material Adverse Effect.
 
Section 4.16     Title; Real Property .  (a) Each Group Member and Holdings has good and marketable fee simple title to all owned real property and valid leasehold interests in all leased real property, and owns all personal property, in each case that is purported to be owned or leased by it, including those reflected on the most recent Financial Statements delivered by the Borrower, and none of such property is subject to any Lien except Permitted Liens.
 
(b)     Set forth on Schedule 4.16 is, as of the Effective Date, (i) a complete and accurate list of all real property owned in fee simple by any Group Member or Holdings or in which any Group Member or Holdings owns a leasehold interest setting forth, for each such real property, the current street address (including, where applicable, county, state and other relevant jurisdictions), the record owner thereof and, where applicable, each lessee and sublessee thereof, (ii) any lease, sublease, license or sublicense of such real property by any Group Member or Holdings and (iii) for each such real property that the Collateral Agent or the Administrative Agent has requested be subject to a Mortgage or that is otherwise material to the business of any Group Member or Holdings, each Contractual Obligation by any Group Member or Holdings, whether contingent or otherwise, to Sell such real property.
 
Section 4.17     Full Disclosure .  The written information prepared or furnished by or on behalf of (and with the consent or at the direction of) Cinedigm or any Loan Party in connection with any Loan Document (including the information contained in any Financial Statement or Disclosure Document) or the consummation of any transaction contemplated therein, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances when made, not misleading in any material respect; provided , however , that projections contained therein are not to be viewed as factual and that actual results during the periods covered thereby may differ from the results set forth in such projections by a material amount.  All projections that are part of such information (including those set forth in any Projections delivered subsequent to the Effective Date) are based upon good faith estimates and stated assumptions believed to be reasonable and fair as of the date made in light of conditions and facts then known and, as of such date, reflect good faith, reasonable and fair estimates of the information projected for the periods set forth therein.  All facts known to Cinedigm or any Loan Party and material to the financial condition, business, property or prospects of Cinedigm and the Loan Parties taken as one enterprise have been disclosed to the Lenders.
 
Section 4.18     Deposit and Disbursement Accounts .  Other than the Cash Management Accounts and the Holdings Operating Account, no Group Member or Holdings owns or has an interest (whether ownership interest, an interest in deposited funds or otherwise) in any deposit or other bank account (including any securities account or any zero balance, payroll, withholding or other fiduciary account).  Other than the Distributor Lockbox Account, Parent Holdings does not own or have an interest (whether ownership interest, an interest in deposited funds or otherwise) in any deposit or other bank account (including any securities account or any zero
 

 
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balance, payroll, withholding or other fiduciary account) related to the Phase 2 Rollout or Digital Systems financed hereunder.
 
Section 4.19     Agreements and Other Documents .  As of the Effective Date, each Group Member, Holdings and, to the extent any such agreement or document relates to the Phase 2 Rollout and Digital Systems financed hereunder, Parent Holdings has provided to the Administrative Agent accurate and complete copies of all of the following agreements or documents to which it is subject and each of which is listed on Schedule 4.19 : all Exhibitor Agreements, all Supply Agreements, all Service Agreements, all Digital Cinema Deployment Agreements, the Management Services Agreement, all CDF2 Loan Documents, all CHG Lease Facility Documents, all IP Licenses, the Sale and Contribution Agreement, all material licenses and permits held by the Loan Parties; instruments and documents evidencing any Indebtedness of such Loan Party and any Lien granted by such Loan Party with respect thereto; and instruments and agreements evidencing the issuance of any equity securities, warrants, rights or options to purchase equity securities of such Loan Party.  As of each Funding Date and the date of any DDTL Termination Date Funding, each Group Member, Holdings and, to the extent any such material contract relates to the Phase 2 Rollout and Digital Systems financed hereunder, Parent Holdings has provided to the Administrative Agent accurate and complete copies of all material contracts to which a Loan Party is a party including (a) all Exhibitor Agreements, Service Agreements, Supply Agreements, CDF2 Loan Documents, CHG Lease Facility Documents, Digital Cinema Deployment Agreements, Management Services Agreements, Sale and Contribution Agreements and IP Licenses entered into after the Effective Date and (b) all amendments, supplements and other modifications to all Exhibitor Agreements, Service Agreements, Supply Agreements, CDF2 Loan Documents, CHG Lease Facility Documents, Digital Cinema Deployment Agreements, Management Services Agreements, Sale and Contribution Agreements and IP Licenses entered into on or after the Effective Date.
 
Section 4.20     DCI Spec Compliance .  As of the Effective Date and any Funding Date, except as set forth on Schedule 4.20 , all Installed Digital Systems comply with the DCI Technical Specification Version 1.2 issued March 7, 2008, by Digital Cinema Initiatives, LLC, all amendments issued on or prior to July 28, 2011, all errata issued on or prior to July 28, 2011, and the DCI Stereoscopic Digital Cinema Addendum Version 1.0 released July 11, 2007 and all errata issued and specifications formally approved and adopted by SMPTE technology committees on or prior to July 28, 2011, as well as any security-related SMPTE standards or specifications (e.g. DCP packaging and key authentication and delivery updates) which are formally approved and adopted by SMPTE technology committees after July 28, 2011 that require a software upgrade, and any requirements of any applicable Digital Cinema Deployment Agreement.
 
Section 4.21     Material Digital Cinema Deployment Agreements .   Schedule 4.21 sets forth, as of the Effective Date, a complete and accurate list of all Distributors party to a Material Digital Cinema Deployment Agreement.
 
Section 4.22     Priority of Loans .  The Loans of the Borrower hereunder and the obligations of each Guarantor under its Guarantee of such Loans rank at least pari passu in right of payment with the senior unsubordinated Indebtedness (unsecured or secured) of the Borrower or such Guarantor, as the case may be.
 

 
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Section 4.23     New Build Cineplexes .  As of any Funding Date and the date of any DDTL Termination Date Funding, not more than 5% of Digital Systems deployed under the Phase 2 Rollout are deployed at New Build Cineplexes.
 
Section 4.24     Second-Run Complexes .  As of any Funding Date and the date of any DDTL Termination Date Funding, not more than 5% of Digital Systems deployed under the Phase 2 Rollout are deployed at Second-Run Complexes.
 
Section 4.25     Parent Holdings .  No financing entity that is allocated VPFs from the Distributor Lockbox Account has recourse to the assets of Parent Holdings other than (a) in an amount equal to such allocated and unpaid VPFs, (b) with respect to potential claims against Parent Holdings from operators of cinema complexes that operate digital systems installed pursuant to a master license agreement to which such operator and Parent Holdings are parties for failure to pay such VPFs to the extent received by Parent Holdings, or (c) with respect to the Christie Deferred Payment.  Parent Holdings has not guaranteed any Indebtedness or other obligations owing to any such financing entity, and has not granted any Liens in its assets to any such financing entity other than (i) any Lien on the Stock of the Subsidiary party to such financing entity's financing documentation or (ii) any Lien on the equipment financed under such financing entity's financing documentation and any VPFs derived from such equipment provided that, in no event shall any such Liens encumber any Installed Digital Systems or any revenues and earnings derived from the Installed Digital Systems (including VPFs).
 
ARTICLE V
FINANCIAL COVENANTS
 
The Borrower agrees with the Lenders and the Agents to each of the following, as long as any Commitment or Obligation remains outstanding:
 
Section 5.1     Maximum Average Cost per Screen .  The Borrower shall not at any time permit with respect to Installed Digital Systems, the quotient of (i) the sum of (A) the outstanding principal amount of all Term Loans as of such date, (B) the outstanding amount of all CHG Lease Advances as of such date (less the outstanding principal amount of all Term Loans as of such date), (C) all outstanding Required Vendor Mezzanine Loans of such date and (D) all Required Exhibitor Contributions made as of such date, divided by (ii) the total number of Installed Digital Systems as of such date, to exceed (x) prior to October 1, 2011, $71,000 and (y) on and after October 1, 2011, $68,973.
 
Section 5.2     Minimum Average Recurring Revenue Per Screen .  Beginning with the Fiscal Quarter ending March 31, 2012 and for each Fiscal Quarter thereafter, the Borrower shall not permit the Average Recurring Revenue Per Screen as of the end of such Fiscal Quarter to be less than the product of (a)(i) for the Fiscal Quarters ending on or before June 30, 2012, $8,800 and (ii) for Fiscal Quarters ending thereafter, $9,600 and (b) the quotient of Average Debt Per Screen divided by $42,500.
 
Section 5.3     Maximum Consolidated Leverage Ratio .  The Borrower shall not have, as of the last day of any Fiscal Quarter set forth below, a Consolidated Leverage Ratio greater than the maximum ratio set forth opposite such Fiscal Quarter:
 

 
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Fiscal Quarter(s) Ending
Maximum Consolidated Leverage Ratio
December 31, 2012
4.50 to 1
March 31, 2013
4.25 to 1
June 30, 2013
4.00 to 1
September 30, 2013
3.75 to 1
December 31, 2013
3.50 to 1
March 31, 2014
3.50 to 1
June 30, 2014
3.25 to 1
September 30, 2014
3.00 to 1
December 31, 2014
2.75 to 1
March 31, 2015
2.50 to 1
June 30, 2015
2.25 to 1
September 30, 2015
2.00 to 1
December 31, 2015
2.00 to 1
March 31, 2016
1.75 to 1
June 30, 2016
1.50 to 1
September 30, 2016
1.25 to 1
December 31, 2016
1.00 to 1
March 31, 2017
0.75 to 1
June 30, 2017 and each Fiscal Quarter thereafter
0.50 to 1
 
Section 5.4     Minimum Consolidated Fixed Charge Coverage Ratio .  Commencing with the Fiscal Quarter ended December 31, 2012, the Borrower shall not have, as of the last day of such Fiscal Quarter or any Fiscal Quarter ended thereafter, a Consolidated Fixed Charge Coverage Ratio of less than 1.10 to 1.00.
 
ARTICLE VI
REPORTING COVENANTS
 
The Borrower (and, to the extent set forth in any other Loan Document, each other Group Member) agrees with the Lenders and the Agents to each of the following, as long as any Obligation or Commitment remains outstanding:
 
Section 6.1     Financial Statements; Other Information .  The Borrower shall deliver, and shall cause Holdings to deliver, each of the following to the Administrative Agent (for further distribution to the Lenders in respect of the items listed in clauses (a) through (i) below):
 

 
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(a)     Monthly Reports .  As soon as available, and in any event within 30 days after the end of each fiscal month in each Fiscal Quarter, a management report in form and substance acceptable to the Administrative Agent, setting forth in reasonable detail for Holdings and the Group Members, among other things (i) the income, cash flow and selling, general and administrative expense for such fiscal month and that portion of the Fiscal Year ending as of the close of such fiscal month, (ii) in comparative form the figures for (A) the corresponding period in the Budget and (B) the corresponding period in the prior Fiscal Year, (iii) the aggregate amount of cash on hand as of the end of such fiscal month, (iv) the number of Installed Digital Systems installed during such fiscal month and the aggregate number of Installed Digital Systems installed as of the end of such fiscal month and a computation of the Average Screens in Service as of the end of such fiscal month, (v) on an aggregate and per Distributor basis (A) the number of digital titles released pursuant to a Digital Cinema Deployment Agreement and (B) the VPFs and associated accounts receivable, (vi) on an aggregate and per Exhibitor basis (A) the revenue generated from Alternative Content (as defined in the applicable Exhibitor Agreement), (B) the revenue generated from Eligible Digital Titles (as defined in the applicable Exhibitor Agreement) distributed by a Non-Participating Distributor, (C) advertising revenues and (D) the amount of all payments with respect to minimum booking commitment obligations, (vii) the amount of Capital Expenditures (including all Restricted Payments made by the Borrower therefor), (viii) with respect to the Cash Management Accounts not maintained with SG, a copy of the bank statement for each such account as at the end of such fiscal month, (ix) a list of all Digital Systems that are not Installed Digital Systems, the location of same and a list of each such Digital System projected to be redeployed in the following 30-day period, (x) copies of internally prepared reports detailing the utilization of the Installed Digital Systems and amounts billed to contracted parties, each in form and substance reasonably satisfactory to the Administrative Agent, (xi) all federal income taxes paid for such fiscal month and that portion of the Fiscal Year ending as of the close of such fiscal month (including all Restricted Payments made by the Borrower therefor), (xii) the calculations of the Servicing Fees paid for such fiscal month and that portion of the Fiscal Year ending as of the close of such fiscal month, (xiii) the calculations of Permitted Back-Up Services Expenses owing as the close of such fiscal month together with all other Back-Up Services Expenses owing as of the close of such fiscal month, (xiv) a reconciliation with respect to (A) differences between expenses reflected in the Cash Expense Report delivered for such fiscal month, expenses reflected pursuant to clause (i) above and disbursements from the Collection Account pursuant to Sections 4.4 and 4.5 of the Multiparty Agreement, as applicable and (B) equipment activity to billing records, and (xv) beginning with the three month anniversary of the Initial Funding Date, the calculation of the Screens in Service Ratio and the Screen Turnover Ratio.
 
(b)     Quarterly Reports .  As soon as available, and in any event within 45 days after the end of each Fiscal Quarter of each Fiscal Year, (i) the Consolidated and consolidating unaudited balance sheet of Holdings and the Group Members as of the close of such Fiscal Quarter and related Consolidated and consolidating statements of income and cash flow for such Fiscal Quarter and that portion of the Fiscal Year ending as of the close of such Fiscal Quarter, setting forth in comparative form the figures for the corresponding period in the prior Fiscal Year and the figures contained in the latest Projections, in each case certified by a Responsible Officer of Holdings as fairly presenting in all material respects the Consolidated and consolidating financial position, results of operations and cash flow of Holdings and the Group Members as at the dates indicated and for the periods indicated in accordance with GAAP (subject to the absence of
 

 
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footnote disclosure and normal year-end audit adjustments), (ii) the unaudited Consolidated balance sheet of Holdings and its Subsidiaries as of close of such Fiscal Quarter prepared on a pro forma and lease adjusted basis, which balance sheet (a) reflects on a pro forma consolidated basis the equipment leased by Holdings and its Subsidiaries and the associated debt and (b) is in a form and substance reasonably acceptable to the Administrative Agent, and (iii) a Digital Systems Report updated as of the end of such Fiscal Quarter.
 
(c)     Annual Reports .  Commencing with the Fiscal Year ended March 31, 2012, as soon as available, and in any event within 90 days after the end of each Fiscal Year, the Consolidated and consolidating balance sheet of Holdings and the Group Members as of the end of such Fiscal Year and related Consolidated and consolidating statements of income, stockholders' equity and cash flow for such Fiscal Year, each prepared in accordance with GAAP, together with a certification by the Group Members' Accountants that (i) such Consolidated and consolidating Financial Statements fairly present in all material respects the Consolidated and consolidating financial position, results of operations and cash flow of Holdings and the Group Members as at the dates indicated and for the periods indicated therein in accordance with GAAP without qualification as to the scope of the audit or as to going concern and without any other similar qualification and (ii) in the course of the regular audit of the businesses of Holdings and the Group Members, which audit was conducted in accordance with the standards of the United States' Public Company Accounting Oversight Board (or any successor entity), such Group Members' Accountants have obtained no knowledge that a Default in respect of any financial covenant contained in Article V has occurred and is continuing or, if in the opinion of the Group Members' Accountants such a Default has occurred and is continuing, a statement as to the nature thereof (which certification with respect to clause (ii) may be limited or omitted to the extent required by accounting rules or guidelines).
 
(d)     Compliance Certificate .  Together with each delivery of any Financial Statement pursuant to clause (b) or (c) above, a Compliance Certificate duly executed by a Responsible Officer of the Borrower that, among other things, (i) demonstrates compliance with the financial covenants contained in Article V and Section 8.16 , (ii) shows in reasonable detail the amount of Capital Expenditures made by Holdings or any Group Member as of the end of such fiscal period and any amounts paid by the Administrative Servicer for Capital Expenditures, (iii) provides a list of all Installed Digital Systems and the location of the same and (iv) states that no Default has occurred and is continuing as of the date of delivery of such Compliance Certificate or, if a Default has occurred and is continuing, states the nature thereof and the action that the Borrower proposes to take with respect thereto.
 
(e)     Corporate Chart and Other Collateral Updates .  As part of the Compliance Certificate delivered pursuant to clause (d) above, each in form and substance satisfactory to the Administrative Agent, a certificate by a Responsible Officer of the Borrower that (i) the Corporate Chart attached thereto (or the last Corporate Chart delivered pursuant to this clause (e) ) is correct and complete as of the date of such Compliance Certificate, (ii) the Loan Parties have delivered all documents (including updated schedules as to locations of Collateral and acquisition of Intellectual Property or real property) they are required to deliver pursuant to any Loan Document on or prior to the date of delivery of such Compliance Certificate and (iii) complete and correct copies of all documents modifying any term of any Constituent Document
 

 
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of any Loan Party or joint venture thereof on or prior to the date of delivery of such Compliance Certificate have been delivered to the Administrative Agent or are attached to such certificate.
 
(f)     Additional Projections .  As soon as available and in any event not later than 60 days prior to the end of each Fiscal Year, (i) the annual business plan and the Budget of Holdings and the Group Members for the Fiscal Year next succeeding such Fiscal Year approved by Holdings' Board of Directors and (ii) forecasts prepared by management of Holdings (A) for each month in such next succeeding Fiscal Year and (B) for each other succeeding Fiscal Year through the Fiscal Year containing the Maturity Date, in each case including in such forecasts (x) a projected year-end Consolidated and consolidating balance sheet, income statement and statement of cash flows for Holdings and the Group Members, (y) a statement of all of the material assumptions on which such forecasts are based and (z) substantially the same type of financial information as that contained in the Initial Projections.
 
(g)     Management Discussion and Analysis .  Together with each delivery of any Compliance Certificate pursuant to clause (d) above, a discussion and analysis of the financial condition and results of operations of Holdings and the Group Members for the portion of the Fiscal Year then elapsed and discussing the reasons for any significant variations from the Projections for such period and the figures for the corresponding period in the previous Fiscal Year.
 
(h)     Intercompany Loan Balances .  Together with each delivery of any Compliance Certificate pursuant to clause (d) above, a summary of the outstanding balances of all intercompany Indebtedness among Holdings, the Group Members and their Affiliates as of the last day of the Fiscal Quarter covered by such Financial Statement, certified as complete and correct by a Responsible Officer of Holdings as part of the Compliance Certificate delivered in connection with such Financial Statements.
 
(i)     Audit Reports, Management Letters, Etc .  Together with each delivery of any Financial Statement for any Fiscal Year pursuant to clause (c) above, copies of each management letter, audit report or similar letter or report received by Holdings or any Group Member from any independent registered certified public accountant (including the Group Members' Accountants) in connection with such Financial Statements or any audit thereof, each certified to be complete and correct copies by a Responsible Officer of Holdings as part of the Compliance Certificate delivered in connection with such Financial Statements.
 
(j)     Insurance Certifications .
 
(i)     At each policy renewal, but not less than annually, a certification from each insurer or by an authorized representative of each insurer identifying the underwriters, the type of insurance, the limits, deductibles, and term thereof and shall specifically list the provisions delineated in clause (b) of Schedule 7.5 ;
 
(ii)     Concurrently with the furnishing of all certificates referred to in clause (i) above, a statement from an independent insurance broker, reasonably acceptable to the Administrative Agent, stating that (A) all premiums then due have been
 

 
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paid and (B) in the opinion of such broker, the insurance then maintained by the Borrower is in accordance with clause (b) of Schedule 7.5 ;
 
(iii)     The Borrower shall request, or cause to be requested of, such insurance broker, upon its first knowledge, to advise the Administrative Agent promptly in writing of any default in the payment of any premiums or any other act or omission, on the part of any Person, which might invalidate or render unenforceable, in whole or in part, any insurance provided by Holdings or the Borrower hereunder; and
 
(iv)     Promptly after becoming available, but in any event within 45 days of the installation of any Digital System on or after the Effective Date, an insurance certificate in form and substance satisfactory to the Collateral Agent demonstrating that the insurance policies required by Section 7. 5 in respect of such Digital System are in full force and effect and have all the terms required by Section 7.5 .
 
(k)     Certificate of Acceptance .  (i) Promptly after becoming available, but in any event within 30 days of the installation of any Digital System, which becomes an Installed Digital System on or after the Effective Date, a copy of a certificate (a " Certificate of Acceptance ") executed by the Exhibitor party to the applicable Exhibitor Agreement accepting delivery and installation of such Digital System, certifying as to the receipt, installation and operation of such Digital System and confirming the location of such Digital System or (ii) if such Exhibitor fails to issue a certificate within this timeframe, confirmation from the applicable supplier, in a form reasonably acceptable to the Administrative Agent, that such Digital System has been installed and is in good working condition.
 
(l)     Cash Expense Report .  As soon as available, and in any event at least two (2) Business Days prior to each Monthly Application Date and Quarterly Application Date, a report in form and substance acceptable to the Administrative Agent setting forth in reasonable detail (i) the cash balance of each Cash Management Account as of the fiscal month most recently ended, (ii) actual cash disbursements from the Holdings Operating Account for such fiscal month and (iii) categorizing each such cash disbursement with respect to its placement in the application of funds provisions described in Sections 4.4 or 4.5 of the Multiparty Agreement, as applicable.
 
(m)     Pipeline Reports .  As soon as available, and in any event within 3 days after the end of each fiscal month during the Availability Period, a Pipeline Report certified by a Responsible Officer of Holdings as reflecting the good faith, reasonable and fair estimates of such Persons in light of the conditions and facts known to such Persons as of the date of such Pipeline Report.
 
(n)     Other Agreements .  Promptly after the execution thereof, copies of all Digital Cinema Deployment Agreements, Exhibitor Agreements, Service Agreements, Supply Agreements, Management Services Agreements, IP Licenses, Sale and Contribution Agreements, CHG Lease Facility Documents, CDF2 Loan Documents and any Intercompany Agreements not previously delivered to the Administrative Agent in accordance with this Agreement.
 

 
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Section 6.2     Other Events .  The Borrower shall give, and shall cause Holdings to give, the Administrative Agent notice of each of the following (which notice may be made by telephone if promptly confirmed in writing) promptly (but, in any event, no later than five (5) days) after any Responsible Officer of Holdings or any Group Member knows or has reason to know of it: (a)(i) any Default and (ii) any event that would reasonably be expected to have a Material Adverse Effect, specifying, in each case, the nature and anticipated effect thereof and any action proposed to be taken in connection therewith, (b) any event (other than any event involving loss or damage to property) reasonably expected to result in a mandatory prepayment of the Obligations pursuant to Section 2.5 , stating the material terms and conditions of such transaction and estimating the Net Cash Proceeds thereof, (c) the commencement of, or any material developments in, any action, investigation, suit, proceeding, audit, claim, demand, order or dispute with, by or before any Governmental Authority affecting Holdings or any Group Member or any property of Holdings or any Group Member that (i) seeks injunctive or similar relief, (ii) in the reasonable judgment of the Borrower, exposes Holdings or any Group Member to liability in an aggregate amount in excess of $250,000 or (iii) if adversely determined, would reasonably be expected to have a Material Adverse Effect and (d) the acquisition of any material real property or Intellectual Property or the entering into any material lease.
 
Section 6.3     Copies of Notices and Reports .  The Borrower shall promptly deliver, and shall cause Holdings to promptly deliver, to the Administrative Agent copies of each of the following: (a) all reports that Holdings or the Borrower transmits to its security holders generally, (b) all documents that Holdings or any Group Member files with the Securities and Exchange Commission, the National Association of Securities Dealers, Inc., any securities exchange or any Governmental Authority exercising similar functions, (c) all press releases not made available directly to the general public and issued by Holdings or any Group Member or, to the extent such press release relates to a Group Member, Cinedigm, (d) all material documents, notices or reports transmitted or delivered or received by any Group Member or Affiliate thereof pursuant to, or in connection with, any Digital Cinema Deployment Agreement, Exhibitor Agreement, Service Agreement, Intercompany Agreement, IP License, the Management Services Agreement, any Supply Agreement, or the CDF2 Loan Documents and all material notices and other documents received with respect to the CHG Lease Facility, and (e) any material document transmitted or received pursuant to, or in connection with, any Contractual Obligation governing Indebtedness of any Group Member or Holdings.
 
Section 6.4     Taxes .  The Borrower shall give, and shall cause Holdings to give, the Administrative Agent notice of each of the following (which may be made by telephone if promptly confirmed in writing) promptly after any Responsible Officer of Holdings or any Group Member or a Tax Affiliate knows or has reason to know of it:  (a) the creation, or filing with the IRS or any other Governmental Authority, of any Contractual Obligation or other document extending, or having the effect of extending, the period for assessment or collection of any taxes with respect to any Tax Affiliate and (b) the creation of any Contractual Obligation of any Tax Affiliate, or the receipt of any request directed to any Tax Affiliate, to make any adjustment under Section 481(a) of the Code, by reason of a change in accounting method or otherwise, which would reasonably be expected to have a Material Adverse Effect.
 
Section 6.5     Labor Matters .  The Borrower shall give, and shall cause Holdings to give, the Administrative Agent notice of each of the following (which may be made by telephone if
 

 
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promptly confirmed in writing), promptly after, and in any event within 30 days after any Responsible Officer of Holdings or any Group Member knows of it: (a) the commencement of any material labor dispute to which Holdings or any Group Member is or may become a party, including any strikes, lockouts or other disputes relating to any of such Person's plants and other facilities and (b) the incurrence by Holdings or any Group Member of liability under the Worker Adjustment and Retraining Notification Act or related or similar liability incurred with respect to the closing of any plant or other facility of any such Person (other than, in the case of this clause (b) , those that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect).
 
Section 6.6     ERISA Matters .  The Borrower shall give the Administrative Agent (a) on or prior to any filing by any ERISA Affiliate of any notice of intent to terminate any Title IV Plan, a copy of such notice and (b) promptly, and in any event within 10 days, after any Responsible Officer of any ERISA Affiliate knows or has reason to know that an ERISA Event has occurred, a notice (which may be made by telephone if promptly confirmed in writing) describing such ERISA Event and any action that any ERISA Affiliate proposes to take with respect thereto, together with a copy of any notice filed with the PBGC or the IRS pertaining thereto.
 
Section 6.7     Environmental Matters .  (a)  The Borrower shall provide, and shall cause Holdings to provide, the Administrative Agent notice of each of the following (which may be made by telephone if promptly confirmed in writing) promptly (but, in any event, no later than five (5) days) after any Responsible Officer of Holdings or any Group Member knows or has reason to know of it (and, upon reasonable request of the Administrative Agent, documents and information in connection therewith): (i)(A) unpermitted Releases, (B) the receipt by Holdings or any Group Member of any notice of violation of or potential liability or similar notice under, or the existence of any condition that could reasonably be expected to result in violations of or   liabilities under, any Environmental Law or (C) the commencement of, or any material change to, any action, investigation, suit, proceeding, audit, claim, demand, dispute alleging a violation of or liability under any Environmental Law, that, for each of clauses (A) , (B) and (C) above (and, in the case of clause (C) , if adversely determined), in the aggregate for each such clause, could reasonably be expected to result in Environmental Liabilities in excess of $250,000, (ii) the receipt by Holdings or any Group Member of notification   that any property of Holdings or any Group Member is subject to any Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities and (iii) any proposed acquisition or lease of real property if such acquisition or lease would have a reasonable likelihood of resulting in aggregate Environmental Liabilities in excess of $250,000.
 
(b)     Upon request of the Administrative Agent, the Borrower shall provide, and shall cause Holdings to provide, the Administrative Agent a report containing an update as to the status of any environmental, health or safety compliance, hazard or liability issue identified in any document delivered to any Secured Party pursuant to any Loan Document or as to any condition reasonably believed by the Administrative Agent to have a reasonable likelihood of resulting in Material   Environmental Liabilities.
 
Section 6.8     Lease Adjusted Financials .  Promptly upon becoming available, and in any event within 90 days of the Effective Date (or such later date as the Administrative Agent may
 

 
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agree in its sole discretion), the Borrower shall provide, and shall cause Holdings to provide,  the unaudited Consolidated balance sheet of Holdings and its Subsidiaries as of the Effective Date prepared on a pro forma and lease adjusted basis which balance sheet (a) reflects on a pro forma consolidated basis the equipment leased by Holdings and its Subsidiaries and the associated debt and (b) is in a form and substance reasonably acceptable to the Administrative Agent.
 
Section 6.9     Other Information .  The Borrower shall provide, and shall cause Holdings to provide, the Administrative Agent with such other documents and information with respect to the business, property, condition (financial or otherwise), legal, financial or corporate or similar affairs or operations of Holdings or any Group Member as the Administrative Agent or such Lender through the Administrative Agent may from time to time reasonably request.
 
ARTICLE VII  
AFFIRMATIVE COVENANTS
 
The Borrower (and, to the extent set forth in any other Loan Document, each other Loan Party) agrees with the Lenders and the Agents to each of the following (and agrees to cause Holdings to comply with each of the following to the extent applicable to Holdings), as long as any Obligation or Commitment remains outstanding:
 
Section 7.1     Maintenance of Corporate Existence .  Each of Holdings and each Group Member shall (a) preserve and maintain its legal existence, except in the consummation of transactions expressly permitted by Section 8.7 , and (b) preserve and maintain its rights (charter and statutory), privileges, franchises and Permits necessary or desirable in the conduct of its business, except, in the case of this clause (b) , where the failure to do so would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
Section 7.2     Compliance with Laws, Etc .  Each Group Member shall comply in all material respects with (i) all applicable Requirements of Law, (ii) all Contractual Obligations and (iii) all Permits.
 
Section 7.3     Payment of Obligations .  Each Group Member shall pay or discharge before they become delinquent (a) all material claims, taxes, assessments, charges and levies imposed by any Governmental Authority and (b) all other lawful claims that if unpaid would, by the operation of applicable Requirements of Law, become a Lien upon any property of any Group Member, except, in the case of clauses (a) and (b) , for those (x) whose amount or validity is being contested in good faith by proper proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Group Member in accordance with GAAP or (y) which encumber property that, individually or in the aggregate, has a value of less than $250,000.
 
Section 7.4     Maintenance of Property .  Each Group Member shall maintain and preserve (a) in good working order and condition all of its property necessary in the conduct of its business and (b) all rights, permits, licenses, approvals and privileges (including all Permits) necessary, used or useful, whether because of its ownership, lease, sublease or other operation or occupation of property or other conduct of its business, and shall make all necessary or appropriate filings with, and give all required notices to, Government Authorities, except for
 

 
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such failures to maintain and preserve the items set forth in clauses (a) and (b) above that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
Section 7.5     Maintenance of Insurance .  (a)  The Borrower shall, and shall cause each Group Member and Holdings to, (i) maintain or cause to be maintained in full force and effect all policies of insurance of any kind with respect to the property and businesses of Holdings and the Group Members and all Installed Digital Systems (including excess liability, policies of life, fire, theft, product liability, public liability, property damage, other casualty, employee fidelity, workers' compensation, business interruption and employee health and welfare insurance) with financially sound and reputable insurance companies or associations (in each case that are not Affiliates of the Loan Parties) of a nature and providing such coverage as is sufficient and as is customarily carried by businesses of the size and character of the business of the Group Members and Holdings and in any event in form and substance reasonably acceptable to the Collateral Agent; it being agreed that the insurance set forth on Schedule 7.5 is acceptable and (ii) cause all such insurance relating to any property or business of Holdings or any Group Member and the Installed Digital Systems to name the Collateral Agent, on behalf of the Secured Parties, as additional insured or loss payee, as appropriate and with any requested endorsements and to provide that no cancellation in coverage shall be effective until after 30 days (or 10 days in the case of a payment default) notice thereof to the Collateral Agent.
 
(b)     General .  The Agents shall be entitled, upon reasonable advance notice, to review Holdings' and the Group Members' insurance policies carried and maintained pursuant to this Section 7.5 .  Upon request, the Borrower shall furnish the requesting Agent with copies of all such insurance policies, binders, and cover notes or other evidence of such insurance. Notwithstanding anything to the contrary herein, no provision of this Section 7.5 or any provision of this Agreement shall impose on any Agent any duty or obligation to verify the existence or adequacy of the insurance coverage maintained by Holdings and the Group Members, nor shall any Agent be responsible for any representations or warranties made by or on behalf of Holdings or the Group Members to any insurance broker, company or underwriter.  The Collateral Agent, at its sole option, may obtain such insurance if not provided by Holdings or the Borrower and in such event, the Borrower shall reimburse the Collateral Agent upon demand for the cost thereof together with interest.  Holdings and the Group Members shall also carry and maintain, should their risk profile change during the term of this Agreement, any other insurance that the Administrative Agent may reasonably require from time to time.
 
Section 7.6     Keeping of Books .  Holdings and the Group Members shall keep proper books of record and account, in which full, true and correct entries shall be made in accordance with GAAP and all other applicable Requirements of Law of all financial transactions and the assets and business of Holdings and each Group Member.
 
Section 7.7     Access to Books and Property; Audit Rights .  Each of Holdings and each Group Member shall permit the Agents, the Lenders and any Related Person of any of them, as often as reasonably requested, at any reasonable time during normal business hours and with reasonable advance notice (except that, during the continuance of an Event of Default, no such notice shall be required) to (a) visit and inspect the property of Holdings and each Group Member and examine and make copies of and abstracts from, the corporate (and similar), financial, operating and other books and records of Holdings and each Group Member, (b)
 

 
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discuss the affairs, finances and accounts of Holdings and each Group Member with any officer or director of Holdings or any Group Member, (c) communicate directly with any registered certified public accountants (including the Group Members' Accountants) of Holdings or any Group Member and (d) conduct such appraisals, audits, reviews, and investigations of the Collateral and any documents, instruments or agreements relating thereto; provided that , so long as no Event of Default has occurred and is continuing, the Agents, the Lenders and any Related Persons shall not, collectively or individually, exercise the rights granted under this Section 7.7 more often than twice in the aggregate in any Fiscal Year.  Holdings and each Group Member shall authorize their respective registered certified public accountants (including the Group Members' Accountants) to communicate directly with the Agents, the Lenders and their Related Persons and to disclose to the Agents, the Lenders and their Related Persons all financial statements and other documents and information as they might have and any Agent or any Lender reasonably requests with respect to Holdings or any Group Member.
 
Section 7.8     Environmental .  Each Group Member shall comply with, and maintain its   property, whether owned, leased, subleased or otherwise operated or occupied, in compliance with, all applicable Environmental Laws (including by implementing any Remedial Action necessary to achieve such compliance or that is required by orders and directives of any Governmental Authority) except for failures to comply that would not, in the aggregate, have a Material Adverse Effect.  Without limiting the foregoing, if an Event of Default has occurred and is continuing or if the Administrative Agent at any time have a reasonable basis to believe that there exist violations of Environmental Laws by any Group Member or that there exist any Environmental Liabilities, in each case, that would reasonably be expected to have, in the aggregate, a Material Adverse Effect, then each Group Member shall, promptly upon receipt of request from the Administrative Agent, cause the performance of, and allow the Administrative Agent and its Related Persons access to such real property for the purpose of conducting, such environmental audits and assessments, including subsurface sampling of soil and groundwater, and cause the preparation of such reports, in each case as the Administrative Agent may from time to time reasonably request.  Such audits, assessments and reports, to the extent not conducted by the Administrative Agent or any of its Related Persons, shall be conducted and prepared by reputable environmental consulting firms reasonably acceptable to the Administrative Agent and shall be in form and substance reasonably acceptable to the Administrative Agent.
 
Section 7.9     Use of Proceeds .  The proceeds of the Term Loans and the proceeds of funds released from the DDTL Escrow Account shall be used to fund the CDF2 Non-Recourse Loans to CHG for use to pay to Holdings a portion (including any deferred portion) of the purchase price for Installed Digital Systems pursuant to the CHG Sale Leaseback.  The proceeds of the Revolving Loans shall be deposited into the Holdings Operating Account and used for the purposes set forth in Section 4.10 of the Multiparty Agreement.  The Borrower shall cause Holdings to deposit the proceeds of purchases of Installed Digital Systems by CHG pursuant to the CHG Sale Leaseback into the Equipment Purchase Account or the Holdings Operating Account, as the case may be, in accordance with Sections 4.9 and 4.10 of the Multiparty Agreement, and to withdraw such proceeds from such account and use such proceeds, in each case, solely to the extent and for the purposes permitted by such applicable section of the Multiparty Agreement.
 

 
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Section 7.10     Additional Collateral and Guaranties .  To the extent not delivered to the Administrative Agent on or before the Effective Date (including in respect of after-acquired property and Persons that become Subsidiaries of any Group Member after the Effective Date to the extent permitted under Sections 8.7 and 8.17 ), Holdings and each Group Member shall, promptly, do each of the following, unless otherwise agreed by the Administrative Agent:
 
(a)     deliver to the Administrative Agent such modifications to the terms of the Loan Documents (or, to the extent applicable as determined by the Administrative Agent or the Collateral Agent, such other documents), in each case in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent and as the Administrative Agent or the Collateral Agent deems necessary or advisable in order to ensure the following:
 
(i)     (A) each Subsidiary of any Group Member that has entered into Guaranty Obligations with respect to any Indebtedness of the Borrower and (B) each Wholly Owned Subsidiary of any Group Member shall guaranty, as primary obligor and not as surety, the payment of the Secured Obligations of the Borrower; and
 
(ii)     Parent Holdings, Holdings, and each Group Member (including any Person required to become a Guarantor pursuant to clause (i) above) shall effectively grant to the Collateral Agent, for the benefit of the Secured Parties, a valid and enforceable security interest in all of the Stock and Stock Equivalents of the Borrower (in the case of Holdings), all of the Stock and Stock Equivalents of Holdings, in the case of Parent Holdings, and all of its property, including all of its Stock and Stock Equivalents and other Securities, (in the case of each Group Member) as security for the Secured Obligations.
 
(b)     deliver to the Collateral Agent all documents representing all Stock, Stock Equivalents and other Securities pledged pursuant to the documents delivered pursuant to clause (a) above, together with undated powers or endorsements duly executed in blank;
 
(c)     upon request of the Collateral Agent, deliver to it a Mortgage on any real property owned by any Group Member and on any of its leases, together with all Mortgage Supporting Documents relating thereto (or, if such real property or the real property subject to such lease is located in a jurisdiction outside the United States, similar documents deemed appropriate by the Collateral Agent to obtain the equivalent in such jurisdiction of a first-priority mortgage on such real property or lease);
 
(d)     to take all other actions necessary or advisable to ensure the validity or continuing validity of any guaranty for any Secured Obligation or any Lien securing any Secured Obligation, to perfect, maintain, evidence or enforce any Lien securing any Secured Obligation or to ensure such Liens have the same priority as that of the Liens on the Collateral set forth in the Loan Documents executed on the Effective Date (or, for Collateral located outside the United States, a similar priority acceptable to the Collateral Agent), including the filing of UCC financing statements in such jurisdictions as may be required by the Loan Documents or applicable Requirements of Law or as the Collateral Agent may otherwise reasonably request; and
 

 
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(e)     deliver to the Administrative Agent legal opinions, Constituent Documents and other documents relating to the matters described in this Section 7.10 , which opinions and other documents shall be as reasonably required by, and in form and substance (and from counsel, with respect to such legal opinions) reasonably satisfactory to, the Administrative Agent.
 
Section 7.11     Cash Management System .  The Borrower agrees to establish on or prior to the Effective Date and maintain until the payment in full in cash of the Obligations (and agrees to cause Parent Holdings and Holdings to establish on or prior to the Effective Date and maintain until the payment in full in cash of the Obligations) the lockboxes, Dollar deposit accounts and cash management system described in the Multiparty Agreement, in each case, in accordance with the terms thereof; provided that, in the case of the Distributor Lockbox Account, Parent Holdings shall have 30 days from the Effective Date (or such longer period as the Administrative Agent may agree in its sole discretion) to enter into a Control Agreement with the applicable Deposit Bank and the collateral agent under the Distributor Lockbox Collateral Agency Agreement, which shall provide for such collateral agent's exclusive control over all cash collections and deposits received in the Distributor Lockbox Account and allows such collateral agent to require that all collection and deposits (including those relating to the Installed Digital Systems) be transferred in accordance with the Distributor Lockbox Collateral Agency Agreement.
 
Section 7.12     Required Hedging .  The Borrower shall, on or before each applicable Required Hedging Date (or such later date acceptable to the Administrative Agent (but, in any event, no later than the tenth (10 th ) Business Day following such Required Hedging Date) but only so long as the Borrower is diligently pursuing a course of action to implement the hedging requirements under this Section 7.12 ), enter into and thereafter maintain Interest Rate Contracts with a Secured Hedging Counterparty until at least the fourth anniversary of the Effective Date in a notional principal amount as of the date such Interest Rate Contracts are entered that equals at least (i) 100% of the portion of the aggregate principal amount of the Term Loans outstanding on such date equal to $25,500,000 (taking into account scheduled amortization thereof during the applicable period) and (ii) 75% of the portion of the aggregate principal amount of the Term Loans outstanding on such date in excess of $25,500,000 (taking into account scheduled amortization thereof during the applicable period).  Such Interest Rate Contracts shall provide for a fixed rate or a capped per annum eurodollar rate not more than 3.00% and such other terms satisfactory to the Administrative Agent to protect the Borrower against increases in the Eurodollar Rate or the Base Rate, as the case may be, as such rates would reasonably impact the Term Loans.  On the third anniversary of the Effective Date and on each subsequent anniversary of the Effective Date, the Borrower shall extend such Interest Rate Contracts to a minimum average remaining tenor of 18 months.
 
Section 7.13     Corporate Separateness .   Each Group Member shall take, or refrain from taking, as the case may be, all actions, including, but not limited to the following, that are necessary or advisable to be taken or not to be taken in order to ensure that its existence shall be maintained and respected separate and apart from that of any other Person (other than any other Group Member):
 
(a)     Each Group Member shall maintain its own deposit, securities or other account or accounts, separate from those of any Affiliate, with commercial banking institutions or broker-
 

 
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dealers.  Each Group Member shall ensure that its funds will not be diverted to any other Person or for other than corporate uses of such Group Member, as the case may be, and such funds will not be commingled with the funds of any other Person.
 
(b)     To the extent that it shares the same officers or other employees as any of its Affiliates, each Group Member shall ensure that the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, to the extent practicable, on the basis of such entity's actual share of such costs and to the extent such allocation is not practicable, on a basis reasonably related to such entity's fair share of the salary and benefit costs associated with all such common officers and employees.
 
(c)     To the extent that it jointly contracts with any of its Affiliates to do business with vendors or service providers or to share overhead expenses, each Group Member shall ensure that the costs incurred in so doing shall be allocated fairly among such entities, to the extent practicable, on the basis of such entities' actual share of such costs and to the extent such allocation is not practicable, on a basis reasonably related to such entities' fair share of such costs.  To the extent that any Group Member contracts or does business with vendors or service providers where the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods or services are provided on the basis of such entities' actual share of such costs and to the extent such allocation is not practicable, on a basis reasonably related to such entities' fair share of such costs.  All material transactions between or among a Group Member and any of its respective Affiliates, whether currently existing or hereafter entered into, shall be only on an arm's-length basis.
 
(d)     Each Group Member shall maintain a principal executive office at a separate address from the address of each of its Affiliates (other than any Group Member or its respective Subsidiaries); provided that reasonably segregated offices in the same building shall constitute separate addresses for purposes of this clause (d) so long as such office space is leased or subleased to any Group Member under a separate written agreement between such Group Member and such Affiliate on arm's-length terms.  To the extent that any Group Member or any of its Affiliates have offices in the same location, there shall be a fair and appropriate allocation of overhead costs among them, and each such entity shall bear its fair share of such expenses.
 
(e)     Each Group Member shall maintain and issue financial statements separate from those of any Affiliate (other than any other Group Member and other than Consolidated and consolidating financial statements with Holdings to the extent including footnote disclosures describing the actual separateness between the Group Members and Holdings in a manner satisfactory to the Administrative Agent) and prepared not less frequently than annually and in accordance with GAAP.
 
(f)     Each Group Member shall conduct its affairs in its own name and strictly in accordance with its Constituent Documents and observe all necessary, appropriate and customary corporate formalities, including, but not limited to, holding all regular and special officers' and directors' meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken
 

 
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or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts.
 
(g)    None of the Group Members shall, nor shall they permit any of their respective Subsidiaries to, assume or guarantee any of the liabilities of any Affiliate except as expressly permitted herein.
 
(h)    Each Group Member shall have stationery and other business forms separate and distinct from that of any other Person.
 
(i)    Each Group Member shall cause its assets to be maintained in a manner that facilitates their identification and segregation from those of any other Person.
 
(j)    At all times thereafter, the board of directors of the Borrower shall have at least one director who is not an officer, director, employee, material shareholder or material supplier of any Affiliate of the Borrower (other than any other Group Member) and whose vote is required in order for the Borrower to file a voluntary petition for bankruptcy or to commence any other event that would constitute an Event of Default under Section 9.1(e) .
 
Section 7.14     Digital Cinema Deployment Agreements .  No Group Member shall, on or after the Effective Date, enter into, or permit any other Loan Party to enter into, any Digital Cinema Deployment Agreement or any Consent with a Distributor other than such Digital Cinema Deployment Agreements and Consents that are in form and substance acceptable to the Administrative Agent.  The Borrower shall cause each Distributor party to a Digital Cinema Deployment Agreement entered into on or after the Effective Date to (a) consent to the assignment of Parent Holdings' rights under such Digital Cinema Deployment Agreement in favor of Holdings and the inclusion of such assigned rights in the assets contributed by Holdings to the Borrower pursuant to the Sale and Contribution Agreement, (b) confirm that the Lenders are acceptable financing sources and (c) acknowledge the security interests granted in such assigned rights by the Group Members to the Collateral Agent and the Lenders.
 
Section 7.15     Exhibitor Agreements .  No Group Member shall, after the Effective Date, enter into, or permit any other Group Member or Holdings to enter into, any Exhibitor Agreement or, to the extent not included in an Exhibitor Agreement, Consents with Approved Exhibitors, other than such Exhibitor Agreements or Consents that are in form and substance, and with Approved Exhibitors and for such locations in each case that are, unless otherwise indicated in the definition thereof, satisfactory to the Administrative Agent.
 
Section 7.16     DCI Spec Compliance .  The Group Members shall deploy or redeploy, and shall cause each other Loan Party to deploy or redeploy, only Digital Systems that are compliant with the DCI Technical Specification Version 1.2 issued March 7, 2008, by Digital Cinema Initiatives, LLC, all amendments issued on or prior to July 28, 2011, all errata issued on or prior to July 28, 2011, and the DCI Stereoscopic Digital Cinema Addendum Version 1.0 released July 11, 2007 and all errata issued and specifications formally approved and adopted by SMPTE technology committees on or prior to July 28, 2011, as well as any security-related SMPTE standards or specifications (e.g. DCP packaging and key authentication and delivery updates) which are formally approved and adopted by SMPTE technology committees after July
 

 
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28, 2011 that require a software upgrade), or any updated specifications required by any Digital Cinema Deployment Agreement, in each case, unless such compliance has been waived in writing by a Distributor and such waiver has been provided to the Administrative Agent or is otherwise referenced on Schedule 4.20 hereof.
 
Section 7.17     Certificates of Insurance .  To the extent not previously delivered to the Collateral Agent, the Borrower shall deliver, or cause to be delivered by the applicable Approved Exhibitor, on or before 30 days after the Effective Date (or such later date as the Administrative Agent may agree in writing so long as such later date is not more than 60 days after the Effective Date) certificates of insurance in respect of any Digital System installed prior to or after the Effective Date, in each case, in form and substance satisfactory to the Collateral Agent, demonstrating that the insurance policies required by Section 7.5 in respect of such Digital System are in full force and effect and have all the terms required by Section 7.5 .
 
Section 7.18     Management Services Agreement .  The Borrower acknowledges and agrees that pursuant to the Management Services Agreement it has appointed the Administrative Agent and the Collateral Agent each to serve as its representatives and agents to, subject to the terms thereof, take actions, make decisions, and grant consents or approvals thereunder on behalf of the Borrower.  The Borrower shall cooperate with the Administrative Agent and the Collateral Agent with respect to any exercise by either of them of any such right or power, and shall not impede or obstruct the Administrative Agent or the Collateral Agent (or any sub-agent of either of them) in the event any such right or power is exercised.  Except as may otherwise be agreed by the Administrative Agent and the Collateral Agent, the Borrower shall obtain the consent or approval of the Administrative Agent and the Collateral Agent prior to making or Holdings' making any election or taking or Holdings' taking any action under the Management Services Agreement which requires the agreement, approval, or consent of the Administrative Agent and the Collateral Agent.
 
Section 7.19     Cineplex Conversion .  If the Phase 2 Rollout results in any screen within a cineplex of an Approved Exhibitor being serviced by an Installed Digital System on or before the end of the Availability Period, the Borrower shall cause all screens within such cineplex to be serviced by an Installed Digital System on or before the end of the end of the Availability Period.
 
ARTICLE VIII
NEGATIVE COVENANTS
 
The Borrower (and, to the extent set forth in any other Loan Document, each other Group Member) agrees with the Lenders and the Agents to each of the following, as long as any Obligation or any Commitment remains outstanding:
 
Section 8.1     Indebtedness .  No Group Member shall, directly or indirectly, incur or otherwise remain liable with respect to or responsible for, any Indebtedness except for the following:
 
(a)     the Obligations;
 
(b)     Indebtedness existing on the date hereof and set forth on Schedule 8.1 , together with any Permitted Refinancing thereof;
 

 
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(c)     Indebtedness consisting of Capitalized Lease Obligations (other than with respect to a lease entered into as part of a Sale and Leaseback Transaction) and purchase money Indebtedness, in each case incurred by any Group Member to finance the acquisition, repair, improvement or construction of fixed or capital assets of such Group Member, together with any Permitted Refinancing thereof; provided , however , that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed $250,000 at any time and (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the property so acquired or built or of such repairs or improvements financed, whether directly or through a Permitted Refinancing, with such Indebtedness (each measured at the time such acquisition, repair, improvement or construction is made);
 
(d)     intercompany loans made by a Group Member to any other Group Member so long as such loans constitute Permitted Investments of such Group Member;
 
(e)     Guaranty Obligations of any Group Member with respect to Indebtedness of any other Group Member expressly permitted by this Section 8.1 (other than Indebtedness permitted hereunder in reliance upon clause (b) above, for which Guaranty Obligations may be permitted to the extent set forth in such clause);
 
(f)     to the extent constituting Indebtedness, endorsements for collection or deposit;
 
(g)     Indebtedness in respect of Hedging Agreements (other than Hedging Agreements entered into with CHG or any Affiliate of CHG) incurred in the ordinary course of business in accordance with Section 7.12 hereof and not for speculative purposes; and
 
(h)     unsecured Indebtedness not otherwise permitted hereby in an aggregate principal amount not to exceed $250,000 at any time outstanding and which has no cash pay interest.
 
Section 8.2     Liens .  No Group Member shall incur, maintain or otherwise suffer to exist any Lien upon or with respect to any of its property, whether now owned or hereafter acquired, or assign any right to receive income or profits, except for the following:
 
(a)     Liens created pursuant to any Loan Document;
 
(b)     With respect to each Group Member, Customary Permitted Liens;
 
(c)     Liens existing on the date hereof and set forth on Schedule 8.2 ;
 
(d)     Liens on the property of any Group Member securing Indebtedness (whether directly or through a Permitted Refinancing) permitted under Section 8.1(c) ; provided , however , that (i) such Liens exist prior to the acquisition of, or attach substantially simultaneously with, or within 90 days after, the acquisition, repair, improvement or construction of, such property financed by such Indebtedness (whether directly or through a Permitted Refinancing) and (ii) such Liens do not extend to any property of any Group Member other than the property (and proceeds thereof) acquired or built, or the improvements or repairs, financed by such Indebtedness (whether directly or through a Permitted Refinancing); and
 

 
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(e)     Liens arising by operation of applicable Requirements of Law as a result of the non-payment of lawful claims; provided , that such Liens do not encumber property that, individually or in the aggregate, has a value greater than or equal to $250,000.
 
Section 8.3     Investments .  No Group Member shall make or maintain, directly or indirectly, any Investment except for the following:
 
(a)     Investments existing on the date hereof and set forth on Schedule 8.3 ;
 
(b)     Investments in cash and Cash Equivalents maintained in Cash Collateral Accounts;
 
(c)     (i) endorsements for collection or deposit in the ordinary course of business consistent with past practice, (ii) extensions of trade credit (other than to Affiliates of the Borrower) arising or acquired in the ordinary course of business and (iii) Investments received in settlements in the ordinary course of business of past due receivables;
 
(d)     Investments by any Group Member in any other Group Member; and
 
(e)     Investments consisting of CDF2 Non-Recourse Loans made pursuant to the CDF2 Loan Documents.
 
Section 8.4     Asset Sales; Stock Issuances .  No Group Member shall Sell any of its property (other than cash) or issue any shares of its own Stock, except for the following:
 
(a)     In each case to the extent entered into in the ordinary course of business and made to a Person that is not an Affiliate of the Borrower, (i) Sales of Cash Equivalents, inventory or property that has become obsolete or worn out and (ii) non-exclusive licenses of Intellectual Property;
 
(b)     a true lease or sublease of real property not constituting Indebtedness and not entered into as part of a Sale and Leaseback Transaction;
 
(c)     (i) any Sale of any property (other than their own Stock or Stock Equivalents) by any Group Member to any other Group Member to the extent any resulting Investment constitutes a Permitted Investment and (ii) any Restricted Payment by any Group Member permitted pursuant to Section 8.5 ;
 
(d)     (i) any Sale or issuance by the Borrower of its own Stock to Holdings, provided , that it shall be a condition to the Sale or issuance of such Stock that such Stock be pledged to the Collateral Agent, for the benefit of the Secured Parties, to secure the Secured Obligations and (ii) any Sale or issuance by any Subsidiary of the Borrower of its own Stock to any Group Member, provided , however , that the proportion of such Stock and of each class of such Stock (both on an outstanding and fully-diluted basis) held by the Loan Parties, taken as a whole, does not change as a result of such Sale or issuance; and
 
(e)     any Sale of Installed Digital Systems to an Approved Exhibitor in connection with the exercise by such Approved Exhibitor of its buyout option under the applicable Exhibitor
 

 
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Agreement; provided , however , that the aggregate number of Installed Digital Systems sold pursuant to this clause (e) shall not exceed 10% of the aggregate number of Installed Digital Systems as of the date of such Sale.
 
Section 8.5     Restricted Payments .  No Group Member shall directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Payment except for the following:
 
(a)     Restricted Payments by any Group Member to any other Group Member;
 
(b)     dividends and distributions declared and paid on the common Stock of any Group Member ratably to the holders of such common Stock and payable only in common Stock of such Group Member;
 
(c)     Restricted Payments by any Group Member to holders of such Group Member's equity for the sole purpose of funding the payment of net income taxes attributable to income of such Group Member but in an amount not to exceed the actual liability that would be incurred by such Group Member on a standalone basis if it was a tax paying entity; provided that, no payments shall be allowed for any taxes or tax obligations (including interest and penalties) owing by a Group Member to a Governmental Authority arising from or related to an audit of the Borrower's equity structure; and
 
(d)     To the extent expressly permitted by Sections 4.4 and 4.5 of the Multiparty Agreement, Restricted Payments made during the Availability Period to Holdings from amounts on deposit in the Collection Account.
 
Section 8.6     Prepayment of Indebtedness .  No Group Member shall (a) prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof any Indebtedness, (b) set apart any property for such purpose, whether directly or indirectly and whether to a sinking fund, a similar fund or otherwise, or (c) make any payment in violation of any subordination terms of any Indebtedness; provided , however , that each Group Member may, in accordance with and to the extent permitted by the Loan Documents, do each of the following:
 
(i)     (A) prepay the Obligations or (B) consummate a Permitted Refinancing;
 
(ii)     so long as no Event of Default has occurred and is continuing, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof (or set apart any property for such purpose) any Indebtedness permitted under Section 8.1(d) and owing to any other Group Member; and
 
(iii)     make regularly scheduled or otherwise required repayments or redemptions of Indebtedness (other than Indebtedness owing to any Affiliate of the Borrower).
 
Section 8.7     Fundamental Changes .  No Group Member shall (a) merge, consolidate or amalgamate with any other Person, (b) acquire all or substantially all of the Stock or Stock Equivalents of any other Person or (c) acquire all or substantially all of the assets of any other
 

 
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Person or all or substantially all of the assets constituting any line of business, division, branch, operating division or other unit operation of any other Person, in each case except for the following:  (i) the merger, consolidation or amalgamation of any Group Member (other than the Borrower) into any other Group Member and (ii) the merger, consolidation or amalgamation of any Group Member for the sole purpose, and with the sole material effect, of changing its State of organization within the United States; provided , however , that (A) in the case of any merger, consolidation or amalgamation involving the Borrower, the Borrower shall be the surviving Person, (B) in the case of any merger, consolidation or amalgamation involving any Group Member (other than the Borrower), a Group Member shall be the surviving Person and (C) prior to or contemporaneously with the consummation of any action permitted under this Section 8.7 , all actions required to maintain the perfection of the Liens of the Collateral Agent on the Stock or property of such Group Member shall have been made.
 
Section 8.8     Change in Nature of Business .  No Group Member shall carry on any business, operations or activities (whether directly, through a joint venture, or otherwise) substantially different from those carried on by the Group Members at the date hereof and business, operations and activities reasonably related thereto.
 
Section 8.9     Transactions with Affiliates .  No Group Member shall, except as otherwise expressly permitted herein, enter into any other transaction directly or indirectly with, or for the benefit of, any Affiliate (including Guaranty Obligations with respect to any obligation of any such Affiliate), except for (a) transactions between or among the Group Members, (b) transactions in the ordinary course of business on a basis no less favorable to such Group Member as would be obtained in a comparable arm's length transaction with a Person not an Affiliate of such Group Member, (c) Restricted Payments permitted under Section 8.5 , (d) transactions evidenced by the Management Services Agreement (including the payment of any Servicing Fees to the extent permitted under the Multiparty Agreement (but excluding payment of any Incentive Servicing Fees and Installation Management Fees to the extent not permitted to be paid under the Multiparty Agreement)) and (e) reasonable director compensation to directors of any Group Member to the extent such compensation is reflected in the Budget most recently delivered to the Administrative Agent.
 
Section 8.10     Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted Payments .  No Group Member shall incur or otherwise suffer to exist or become effective or remain liable on or be responsible for any Contractual Obligation limiting the ability of (a) any Group Member (other than the Borrower) to make Restricted Payments to, or Investments in, or repay Indebtedness or otherwise Sell property to, any other Group Member or (b)   any Group Member to incur or suffer to exist any Lien upon its property, whether now owned or hereafter acquired, securing any of its Secured Obligations (including any "equal and ratable" clause and any similar Contractual Obligation requiring, when a Lien is granted on any property, another Lien to be granted on such property or any other property), except, for each of clauses (a) and (b) above, (x) pursuant to the Loan Documents and (y) limitations on Liens (other than those securing any Secured Obligation) on any property whose acquisition, repair, improvement or construction is financed by purchase money Indebtedness, Capitalized Lease Obligations or Permitted Refinancings permitted under Section 8.1(c) set forth in the Contractual Obligations governing such Indebtedness, Capitalized Lease Obligations or Permitted Refinancing or Guaranty Obligations with respect thereto.
 

 
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Section 8.11     Modification of Certain Documents .
 
(a)     No Group Member shall waive or otherwise modify any term (or permit or consent to the waiver or modification of any term) of, or otherwise consent to any departure from any requirement of any CDF2 Loan Document, or any Contractual Obligation constituting collateral therefor (other than any CHG Lease Facility Document), any Digital Cinema Deployment Agreement, any Exhibitor Agreement, any Intercompany Agreement, any Supply Agreement, any Service Agreement, any IP License, the Sale and Contribution Agreement, the Management Services Agreement or its Constituent Documents without not less than five (5) Business Days notice to the Administrative Agent (or such shorter notice period acceptable to the Administrative Agent in its sole discretion).
 
(b)     No Group Member shall waive or otherwise modify in any material respect any term (or permit or consent to the material waiver or modification of any term) of, or otherwise consent to any departure in any material respect from any requirement of any CDF2 Loan Document, any Contractual Obligation constituting collateral therefor (other than any CHG Lease Facility Document), any Digital Cinema Deployment Agreement, any Exhibitor Agreement, any Intercompany Agreement, any Supply Agreement, any Service Agreement, any IP License, the Sale and Contribution Agreement, the Management Services Agreement or its Constituent Documents, in each case, without the prior written consent of the Administrative Agent; provided that, in no event, shall any Group Member waive any default under any CDF2 Loan Document without the prior written consent of the Administrative Agent.
 
(c)     The CDF2 Loan Documents and CHG's obligations thereunder may not be refinanced without the consent of the Required Lenders in their sole discretion.
 
(d)     Notwithstanding the above, this Section 8.11 shall not apply to consents, waivers, amendments, supplements, restatements or other modifications automatically made to any CDF2 Loan Document in accordance with Section 7.3(d) of the Multiparty Agreement.
 
Section 8.12     Accounting Changes; Fiscal Year .  No Group Member shall change its (a) accounting treatment or reporting practices, except as required by GAAP or any Requirement of Law, or (b) its fiscal year or its method for determining fiscal quarters or fiscal months.
 
Section 8.13     Margin Regulations .  No Group Member shall use all or any portion of the proceeds of any credit extended hereunder to purchase or carry margin stock (within the meaning of Regulation U of the Federal Reserve Board) in contravention of Regulation U of the Federal Reserve Board.
 
Section 8.14     Compliance with ERISA .  No ERISA Affiliate shall cause or suffer to exist (a) any event that could result in the imposition of a Lien with respect to any Title IV Plan or Multiemployer Plan or (b) any other   ERISA Event, that would, in the aggregate, have a Material Adverse Effect.  No Group Member shall cause or suffer to exist any event that could result in the imposition of a Lien with respect to any Benefit Plan.
 

 
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Section 8.15     Hazardous Materials .  Other than such violations, Environmental Liabilities and effects that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect, no Group Member shall cause or suffer to exist (a) the disposal, transportation, sale, reuse, recycle or Release of any Hazardous Materials from Digital Systems in violation of Environmental Laws or (b) the Release of any Hazardous Material at, to or from any real property owned, leased, subleased or otherwise operated or occupied by any Group Member that would violate any Environmental Law, form the basis for any Environmental Liabilities or otherwise adversely affect the value or marketability of any real property (whether or not owned by any Group Member).
 
Section 8.16     Capital Expenditures .  No Group Member shall incur, or permit to be incurred, or make any distributions to Holdings (other than Restricted Payments made in accordance with clause a of Sections 4.4 and 4.5 of the Multiparty Agreement) to enable Holdings to incur, (a) prior to the end of the Availability Period, any Capital Expenditures (to the extent not the responsibility of Cinedigm under the Management Services Agreement) in excess of $163,300,000 in the aggregate and (b) thereafter, Capital Expenditures (to the extent not the responsibility of Cinedigm under the Management Services Agreement) in excess of $100,000 in the aggregate in any Fiscal Year (the " Fiscal Year Allowance "); provided that if any amount of the Fiscal Year Allowance is not used in a Fiscal Year, the Fiscal Year Allowance for the Fiscal Year immediately following such Fiscal Year (but not for any subsequent Fiscal Year) shall be increased by such unused amount.
 
Section 8.17     No Foreign Subsidiaries .  No Group Member shall create or have any Foreign Subsidiaries or any interest in any foreign joint ventures.
 
Section 8.18     Bank Accounts .  Other than the Cash Management Accounts, no Group Member shall create, own or otherwise have an interest (whether ownership interest, an interest in deposited funds or otherwise) in any deposit or other bank account (including any securities account or any zero balance, payroll, withholding or other fiduciary account).
 
 
ARTICLE IX
EVENTS OF DEFAULT
 
Section 9.1     Events of Default .  Each of the following shall be an Event of Default:
 
(a)     any Group Member shall fail to pay (i) any principal of any Loan when the same becomes due and payable, (ii) any interest on any Loan and such non-payment continues for a period of three Business Days after the due date therefor or (iii) any fee under any Loan Document or any other Obligation (other than those set forth in clauses (i) and (ii) above) and such non-payment continues for a period of five Business Days after the due date therefor; or
 
(b)     any representation, warranty or certification made or deemed made by or on behalf of any Loan Party in any Loan Document or by or on behalf of any Loan Party (or any Responsible Officer thereof) in connection with any Loan Document (including in any document delivered in connection with any Loan Document) shall prove to have been incorrect in any material respect (without duplication of any materiality qualifier contained therein) when made or deemed made; or
 

 
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(c)     any Loan Party or any Affiliate of a Loan Party shall fail to comply with (i) any provision of Article V , Sections 6.2(a)(i) , 6.8 , 7.1 , 7.9 through 7.13 , 7.16 or 7.18 , Article VIII , any provision of Section 3.4 or Section  4 of the Multiparty Agreement or (ii) any other provision of any Loan Document if, in the case of this clause (ii) , such failure shall remain unremedied for 30 days after the earlier of (A) the date on which a Responsible Officer of the Borrower becomes aware of such failure and (B) the date on which notice thereof shall have been given to the Borrower by the Administrative Agent or the Required Lenders, provided , that, with respect to non-compliance with Section 6.1 , the Borrower shall only be allowed one 30-day grace period in any 12-month period and four 30-day grace periods during the term of this Agreement; or
 
(d)     (i) any Group Member shall fail to make any payment when due (whether due because of scheduled maturity, required prepayment provisions, acceleration, demand or otherwise) on any Indebtedness of any Group Member (other than the Obligations) and, in each case, such failure relates to Indebtedness having a principal amount of $250,000 or more, (ii) any other event shall occur or condition shall exist under any Contractual Obligation relating to any such Indebtedness, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness or (iii) any such Indebtedness shall become or be declared to be due and payable, or be required to be prepaid, redeemed, defeased or repurchased (other than by a regularly scheduled payment or required prepayment), prior to the stated maturity thereof; or
 
(e)     (i) any Loan Party or CHG shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors, (ii) any proceeding shall be instituted by or against any Loan Party or CHG seeking to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, composition of it or its debts or any similar order, in each case under any Requirement of Law relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the entry of an order for relief or the appointment of a custodian, receiver, trustee, conservator, liquidating agent, liquidator, other similar official or other official with similar powers, in each case for it or for any substantial part of its property and, in the case of any such proceedings instituted against (but not by or with the consent of) any Loan Party or CHG, either such proceedings shall remain undismissed or unstayed for a period of 60 days or more or any action sought in such proceedings shall occur or (iii) any Loan Party or CHG shall take any corporate or similar action or any other action to authorize any action described in clause (i) or (ii) above; or
 
(f)     one or more judgments, orders or decrees (or other similar process) shall be rendered against any Group Member (i)(A) in the case of money judgments, orders and decrees, involving an aggregate amount (excluding amounts adequately covered by insurance payable to any Group Member, to the extent the relevant insurer has not denied coverage therefor) in excess of $250,000 or (B) otherwise, that would reasonably be expected to have, in the aggregate, a Material Adverse Effect and (ii)(A) enforcement proceedings shall have been commenced by any creditor upon any such judgment, order or decree or (B) such judgment, order or decree shall not have been vacated or discharged for a period of 30 consecutive days and there shall not be in effect (by reason of a pending appeal or otherwise) any stay of enforcement thereof; or
 

 
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(g)     except pursuant to a valid, binding and enforceable termination or release permitted under the Loan Documents and executed by the Administrative Agent or the Collateral Agent, as applicable, or as otherwise expressly permitted under any Loan Document, (i) any provision of any Loan Document shall, at any time after the delivery of such Loan Document, fail to be valid and binding on, or enforceable against, any Loan Party party thereto or, in the case of the Multiparty Agreement, CHG, any Approved Vendor or Cinedigm or (ii) any Loan Document purporting to grant a Lien to secure any Secured Obligation shall, at any time after the delivery of such Loan Document, fail to create a valid and enforceable Lien on any Collateral purported to be covered thereby or such Lien shall fail or cease to be a perfected Lien with the priority required in the relevant Loan Document, or any Group Member (or in the case of (y) the Distributor Lockbox Collateral Agency Agreement or related Loan Documents, Parent Holdings or any other party of such agreement or (z) the Control Agreement with respect to the Holdings Operating Account, or related Loan Documents, Holdings) shall state in writing that any of the events described in clause (i) or (ii) above shall have occurred; or
 
(h)     there shall occur any Change of Control; or
 
(i)     (i) any Material Digital Cinema Deployment Agreement shall cease to be valid, binding or enforceable in accordance with its terms (other than pursuant to a merger or acquisition of a Distributor party to such Material Digital Cinema Deployment Agreement with or by another Distributor party to a Material Digital Cinema Deployment Agreement) and within 90 days thereafter, the Borrower shall not have delivered to the Administrative Agent written evidence of the reinstatement of such Material Digital Cinema Deployment Agreement as a valid, binding and enforceable agreement, (ii) any of Parent Holdings, Holdings or any Group Member or its assignor shall be in breach of any Material Digital Cinema Deployment Agreement and the effect of such breach is to permit the termination of such Material Digital Cinema Deployment Agreement and within 90 days of such breach the Borrower has not delivered to the Administrative Agent written evidence of cure or waiver of such breach by the applicable Distributor, or (iii) any Distributor shall be in breach of a Material Digital Cinema Deployment Agreement, and within 90 days of such breach, the Borrower has not delivered to the Administrative Agent written evidence of the cure of such breach by such Distributor; provided that each 90-day period described above shall be extended for up to an additional 90 days (or such longer period solely to the extent that resolution of the applicable event or breach described in clauses (i), (ii) or (iii) above is stayed due to ongoing litigation or similar proceedings) if (x) such applicable event or breach is reasonably capable of cure and (y) the Administrative Servicer is diligently pursuing such cure; or
 
(j)     (i) any Material Exhibitor Agreement shall cease to be valid, binding or enforceable in accordance with its terms (other than pursuant to a merger or acquisition of an Exhibitor party to such Material Exhibitor Agreement with or by another Exhibitor party to an Exhibitor Agreement) or shall be terminated and, within 90 days thereafter, the Borrower shall not have delivered to the Administrative Agent written evidence of either (A) the reinstatement of such Material Exhibitor Agreement as a valid, binding and enforceable agreement or (B) the redeployment of the Installed Digital Systems covered by such Material Exhibitor Agreement with Approved Exhibitors, (ii) Holdings or its assignee shall be in breach of any Material Exhibitor Agreement and the effect of such breach is to permit the termination of such Material Exhibitor Agreement, and within 90 days of such breach, the Borrower has not delivered to the
 

 
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Administrative Agent written evidence of cure of such breach by Holdings or waiver of such breach by the applicable Exhibitor, or (iii) any Exhibitor shall be in breach of a Material Exhibitor Agreement, and within 90 days of such breach, the Borrower has not delivered to the Administrative Agent written evidence of either (A) cure of such breach by such Exhibitor or (B) the redeployment of the Installed Digital Systems covered by such Material Exhibitor Agreement with Approved Exhibitors; provided that each 90-day period described above shall be extended for up to an additional 90 days (or such longer period solely to the extent that resolution of the applicable event or breach described in clauses (i), (ii) or (iii) above is stayed due to ongoing litigation or similar proceedings) if (x) such applicable event or breach is reasonably capable of cure and (y) the Administrative Servicer is diligently pursuing such cure; or
 
(k)       (i) the Management Services Agreement shall cease to be valid, binding or enforceable in accordance with its terms and within 90 days thereafter, (A) the Borrower shall not have delivered to the Administrative Agent written evidence of the reinstatement of the Management Services Agreement as a valid, binding and enforceable agreement or (B) the Management Services Agreements is not replaced with a new management services agreement satisfactory to the Administrative Agent, (ii) any of Holdings or any Group Member or its assignor shall be in breach of the Management Services Agreement and the effect of such breach is to permit the termination of the Management Services Agreement and within 90 days of such breach (A) the Borrower has not delivered to the Administrative Agent written evidence of cure or waiver of such breach by the Administrative Servicer or (B) in the case of termination, the Management Services Agreements is not replaced with a new management services agreement satisfactory to the Administrative Agent, or (iii) the Administrative Servicer shall be in breach of the Management Services Agreement and within 90 days of such breach the Borrower has not delivered to the Administrative Agent written evidence of the cure of such breach; or
 
(l)     (i)  any Intercompany Agreement set forth on Schedule 9.1(l) shall cease to be valid, binding or enforceable in accordance with its terms and within 90 days thereafter such agreement is not replaced with a new agreement satisfactory to the Administrative Agent or (ii) any Group Member shall be in breach of any of the same and the effect of such breach is to permit the termination of such agreement, and within 90 days thereafter such breach is not cured; or
 
(m)     the occurrence of an ERISA Event that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to subject a Group Member to liability in excess of $250,000; or
 
(n)     (i) any CDF2 Loan Document shall cease to be valid, binding or enforceable in accordance with its terms, (ii) the occurrence of an "Event of Default" as defined in the CDF2 Loan Documents, (iii) the proceeds of the CDF2 Non-Recourse Loans shall not be used as required by Section 7.9 hereof or Section 6.7 of the CDF2 Loan Agreement, or (iv) the Borrower shall be in breach of any CDF2 Loan Document; or
 
(o)     (i) any CHG Lease Facility Document shall cease to be valid, binding or enforceable in accordance with its terms, (ii) the occurrence of an "Event of Default" as defined in the CHG Lease Facility Documents, (iii) CHG shall be in breach in any material respect of
 

 
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any CHG Lease Facility Document and such breach is not cured within the applicable grace or cure period provided therein, (iv) any schedule to the CHG Lease Agreement shall have a remaining term of less than 90 days, or (v) any CHG Lease Facility Document shall be refinanced, amended or otherwise modified in a manner not permitted by the Multiparty Agreement; or
 
(p)     (i)  any Supply Agreement shall cease to be valid, binding or enforceable in accordance with its terms and within 90 days thereafter such agreement is not replaced with a new agreement satisfactory to the Administrative Agent, or (ii) Parent Holdings, Holdings or any Group Member or any of their Affiliates or assignor thereof shall be in breach of any of the same and the effect of such breach is to permit the termination of such agreement, and within 90 days thereafter such breach is not cured; or
 
(q)     (i)  any Service Agreement shall cease to be valid, binding or enforceable in accordance with its terms and within 90 days thereafter, (A) the Borrower shall not have delivered to the Administrative Agent written evidence of the reinstatement of such Service Agreement as a valid, binding and enforceable agreement or (B) such Service Agreement is not replaced with a new agreement satisfactory to the Administrative Agent, (ii) any Exhibitor shall be in breach of any of the same and the effect of such breach is to permit the termination of such agreement, and within 90 days thereafter (A) such breach is not cured or (B) in the case of termination, such Service Agreement is not replaced with a new agreement satisfactory to the Administrative Agent, (iii) with respect to any Exhibitor Agreement permitting the relevant Exhibitor to use an internal service technician in lieu of a Digital Systems Servicer in accordance with the definition of "Installed Digital Systems", any failure to replace such internal service technician with a Digital Systems Servicer satisfactory to and pursuant to a Service Agreement satisfactory to the Administrative Agent within 90 days after the date required by such definition, or (iv) any Service Agreement shall be amended or otherwise modified (or any term thereof shall be waived) in any material respect without the prior written consent of the Administrative Agent; or
 
(r)     no later than one Business Day prior to the Application Date immediately following the last day of the Availability Period, Holdings shall fail to make a cash common equity contribution into the Collection Account for the benefit of the Borrower in an amount equal to the difference of (a) all cash on hand of Holdings as of as of such date minus (b) the amount necessary to fund or replenish the Target Minimum Cash Amount on such date; or
 
(s)     (i) the Required Vendor Mezzanine Subordinated Notes or (ii) any documents governing (A) the Required Exhibitor Contributions or (B) the Installation Management Fees or Incentive Servicing Fees consisting of subordinated debt shall be amended or otherwise modified in a manner not permitted by the Multiparty Agreement; or
 
(t)     Holdings and/or the Group Members incurs, in the aggregate, Capital Expenditures (to the extent not the responsibility of Cinedigm under the Management Services Agreement) in excess of (i) $163,300,000 at any time prior to the end of the Availability Period or (ii) thereafter, the Fiscal Year Allowance in any Fiscal Year.
 

 
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Section 9.2     Remedies .  (a) General .  During the continuance of any Event of Default, (i) the Administrative Agent may, and, at the request of the Required Lenders, shall, in each case by notice to the Borrower, (A) declare all or any portion of the Commitments terminated, whereupon the Commitments shall immediately be reduced by such portion, or in the case of a termination in whole, shall terminate together with any obligation any Lender may have hereunder to make any Loan, or (B) declare immediately due and payable all or part of any Obligation (including the Loans and any accrued but unpaid interest thereon), whereupon the same shall become immediately due and payable, without presentment, demand, protest or further notice or other requirements of any kind, all of which are hereby expressly waived by the Borrower (and, to the extent provided in any other Loan Document, other Loan Parties), or (C) require the return of all amounts on deposit in the DDTL Escrow Account, pro rata to each Delayed Draw Term Loan Lender according to the amount funded by such Delayed Draw Term Loan Lender into the DDTL Escrow Account on the DDTL Termination Date, and (ii) the Administrative Agent and the Collateral Agent, as applicable, may and, at the request of the Required Lenders, shall, exercise any other right or remedy provided under any Loan Document or by any applicable Requirement of Law (including requiring and obtaining audits with respect to the Borrower's compliance with any Digital Cinema Deployment Agreement); provided , however , that, effective immediately upon the occurrence of the Events of Default specified in Section 9.1(e) , (x) the Commitments of each Lender to make Loans shall automatically be terminated, (y) all Obligations (including in each case all Loans and all accrued but unpaid interest thereon) shall automatically become and be due and payable, without presentment, demand, protest or further notice or other requirement of any kind, all of which are hereby expressly waived by the Borrower (and, to the extent provided in any other Loan Document, any other Loan Party), and (z) all amounts on deposit in the DDTL Escrow Account shall be returned to each Delayed Draw Term Loan Lender, pro rata to each Delayed Draw Term Loan Lender according to the amount funded by such Delayed Draw Term Loan Lender into the DDTL Escrow Account on the DDTL Termination Date.
 
(b)     Actions with respect to Management Services Agreement .  During the continuance of any Event of Default, the Collateral Agent may, and, at the request of the Required Lenders, shall exercise any and all rights of the Borrower under the Management Services Agreement including the right to replace the "Manager" defined therein or terminate the Management Services Agreement or take any other action under the Management Services Agreement that would otherwise be able to be taken by the Borrower or Holdings thereunder.
 
Section 9.3     CHG Right to Cure .  Notwithstanding anything to the contrary contained in Section 9.1 ,
 
(a)     after the occurrence and during the continuance of any Event of Default described in Section 9.1(a) and to the extent provided in Section 7.8 of the Multiparty Agreement, CHG shall have the right to cure such default on behalf of the Borrower, and if such right is exercised, the applicable Event of Default that would have otherwise occurred but for the exercise of CHG's cure right shall be deemed not to have occurred for the purposes of the Loan Documents;
 
(b)     in the event that the Borrower fails to comply with the requirements of Section 5.3 at the end of any Fiscal Quarter, at any time until the 15th day after the date
 

 
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on which a Compliance Certificate is required to be delivered with respect to the such Fiscal Quarter hereunder, CHG shall have the right to the extent provided in Section 7.8 of the Multiparty Agreement to prepay Term Loans on behalf of the Borrower, and if such right is exercised, such prepayment shall be deemed to have occurred prior to the end of such Fiscal Quarter for purposes of determining compliance with such Section 5.3 .  If, after giving effect to the foregoing recalculation, the Borrower shall then be in compliance with the requirements of such  Section 5.3 , the Borrower shall be deemed to have satisfied the requirements of such  Section 5.3 as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of such  Section 5.3 that would have otherwise occurred but for such prepayment of the Term Loans shall be deemed not to have occurred for the purposes of the Loan Documents; and
 
(c)     in the event that the Borrower fails to comply with the requirements of Section 5.4 at the end of any Fiscal Quarter, at any time until the 15th day after the date on which a Compliance Certificate is required to be delivered with respect to the such Fiscal Quarter hereunder, CHG shall have the right to the extent provided in Section 7.8 of the Multiparty Agreement to prepay Term Loans on behalf of the Borrower, and if such right is exercised, such prepayment shall be deemed to have occurred prior to the end of such Fiscal Quarter and to have constituted a scheduled principal payment during such Fiscal Quarter for purposes of determining compliance with such Section 5.4 .  If, after giving effect to the foregoing recalculation, the Borrower shall then be in compliance with the requirements of Section 5.4 , the Borrower shall be deemed to have satisfied the requirements of Section 5.4 as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of Section 5.4 that would have otherwise occurred but for such prepayment of the Term Loans shall be deemed not to have occurred for the purposes of the Loan Documents.
 
The parties hereto hereby acknowledge that  Section 9.3(b) and Section 9.3(c) above may not be relied on for purposes of calculating the Consolidated Leverage Ratio or the Consolidated Fixed Charge Coverage Ratio other than as applicable to Sections 5.3 and 5.4 , respectively, of this Agreement.
 
ARTICLE X
AGENTS
 
Section 10.1     Appointment and Authorization of the Agents .  (a)   Appointment of Administrative Agent .  Each Lender hereby irrevocably appoints SG (together with any successor Administrative Agent pursuant to Section 10.10 ) as the Administrative Agent hereunder and authorizes the Administrative Agent to (i) execute and deliver the Loan Documents and accept delivery thereof on its behalf from any Loan Party, (ii) take such action on its behalf and to exercise all rights, powers and remedies and perform the duties as are expressly delegated to the Administrative Agent under such Loan Documents and (iii) exercise such powers as are reasonably incidental thereto.  The Borrower and each Lender hereby acknowledges and agrees that the Administrative Agent may make available to CHG any reports, notices and other information provided by the Borrower, Cinedigm, Holdings or any other Loan Party pursuant to the terms of the Loan Documents.
 

 
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(b)     Appointment and Duties of Collateral Agent .  Each Lender hereby irrevocably appoints SG (together with any successor Collateral Agent pursuant to Section 10.9 ) as the Collateral Agent hereunder and authorizes the Collateral Agent to (i) execute and deliver the Loan Documents to which it is a party and accept delivery thereof on its behalf from any Loan Party, (ii) take such action on its behalf and to exercise all rights, powers and remedies and perform the duties as are expressly delegated to the Collateral Agent under such Loan Documents, (iii) act as collateral agent for each Secured Party for purposes of the perfection of all Liens created by such agreements and all other purposes stated therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Loan Documents, (vi) except as may be otherwise specified in any Loan Document, exercise all remedies given to the Collateral Agent and the other Secured Parties with respect to the Collateral, whether under the Loan Documents, applicable Requirements of Law or otherwise (vii) execute any amendment, consent or waiver under the Loan Documents to which the Collateral Agent is a party on behalf of any Lender that has consented in writing to such amendment, consent or waiver, and (viii) exercise such powers as are reasonably incidental thereto; provided , however , that the Collateral Agent hereby appoints, authorizes and directs each Lender to act as collateral sub-agent for the Collateral Agent and the Lenders for purposes of the perfection of all Liens with respect to the Collateral, including any deposit account maintained by a Loan Party with, and cash and Cash Equivalents held by, such Lender, and may further authorize and direct the Lenders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to the Collateral Agent, and each Lender hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed.
 
(c)     Limited Duties .  Under the Loan Documents, the Agents (i) are acting solely on behalf of the Lenders (except to the limited extent provided in Section 2.11(b) with respect to the Register), with duties that are entirely administrative in nature, notwithstanding the use of the defined term "Administrative Agent", "Collateral Agent" or the terms "agent", "administrative agent", and "collateral agent" and similar terms in any Loan Document to refer to the Administrative Agent or the Collateral Agent, which terms are used for title purposes only, (ii) are not assuming any obligation under any Loan Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender or any other Secured Party and (iii) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Loan Document, and each Lender hereby waives and agrees not to assert any claim against any Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (i) through (iii) above.  None of the Persons identified on the facing page of this Agreement as an Arranger, "syndication agent" or "documentation agent" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, in the case of such Persons that are also Lenders, those obligations applicable to Lenders.   Except as otherwise provided herein, none of the Persons identified on the facing page of this Agreement as a Bookrunner shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, in the case of such Persons that are also Lenders, those obligations applicable to Lenders.
 
Section 10.2     Binding Effect .  Each Lender agrees that (i) any action taken by any Agent or the Required Lenders (or, if expressly required hereby, such lesser or greater proportion of the
 

 
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Lenders) in accordance with the provisions of the Loan Documents, (ii) any action taken by such Agent in reliance upon the instructions of Required Lenders (or, where so required, such lesser or greater proportion) and (iii) the exercise by such Agent or the Required Lenders (or, where so required, such lesser or greater proportion) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Secured Parties.
 
Section 10.3     Use of Discretion .  (a)   No Action without Instructions .  No Agent shall be required to exercise any discretion or take, or to omit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit to take (i) under any Loan Document or (ii) pursuant to instructions from the Required Lenders (or, where expressly required by the terms of this Agreement, a greater or lesser proportion of the Lenders).
 
(b)     Right Not to Follow Certain Instructions .  Notwithstanding clause (a) above, no Agent shall be required to take, or to omit to take, any action (i) unless, upon demand, such Agent receives an indemnification satisfactory to it from the Lenders (or, to the extent applicable and acceptable to such Agent, any other Secured Party) against all Liabilities that, by reason of such action or omission, may be imposed on, incurred by or asserted against such Agent or any Related Person thereof or (ii) that is, in the opinion of such Agent or its counsel, contrary to any Loan Document or applicable Requirement of Law.
 
Section 10.4     Delegation of Rights and Duties .  Each Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document by or through any trustee, co-agent, employee, attorney-in-fact and any other Person (including any Secured Party).  Any such Person shall benefit from this Article X to the extent provided by such Agent.
 
Section 10.5     Reliance and Liability .  (a)  Each Agent may, without incurring any liability hereunder, (i) treat the payee of any Note as its holder until such Note has been assigned in accordance with Section 11.2(e) , (ii) rely on the Register to the extent set forth in Section 2.11 , (iii) consult with any of its Related Persons and, whether or not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts engaged by, any Loan Party) and (iv) rely and act upon any document and information (including those transmitted by Electronic Transmission) and any telephone message or conversation, in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties.
 
(b)     None of the Agents or any of their Related Persons shall be liable for any action taken or omitted to be taken by any of them under or in connection with any Loan Document, and each Lender and the Borrower hereby waive and shall not assert (and the Borrower shall cause each other Loan Party to waive and agree not to assert) any right, claim or cause of action based thereon, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of such Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection with the duties expressly set forth herein.  Without limiting the foregoing, no Agent:
 

 
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(i)     shall be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Required Lenders (or, where expressly required by the terms of this Agreement, a greater or lesser proportion of the Lenders) or for the actions or omissions of any of its Related Persons selected with reasonable care (other than employees, officers and directors of such Agent, when acting on behalf of such Agent);
 
(ii)     shall be responsible to any Secured Party for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Loan Document;
 
(iii)     makes any warranty or representation, or shall be responsible, to any Secured Party for any statement, document, information, representation or warranty made or furnished by or on behalf of any Related Person or any Loan Party in connection with any Loan Document or any transaction contemplated therein or any other document or information with respect to any Loan Party, whether or not transmitted or (except for documents expressly required under any Loan Document to be transmitted to the Lenders) omitted to be transmitted by such Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by such Agent in connection with the Loan Documents; and
 
(iv)     shall have any duty to ascertain or to inquire as to the performance or observance of any provision of any Loan Document, whether any condition set forth in any Loan Document is satisfied or waived, as to the financial condition of any Loan Party or as to the existence or continuation or possible occurrence or continuation of any Default or Event of Default or shall be deemed to have notice or knowledge of such occurrence or continuation unless it has received a notice from the Borrower or any Lender describing such Default or Event of Default clearly labeled "notice of default" (in which case such Agent shall promptly give notice of such receipt to all Lenders);
 
and, for each of the items set forth in clauses (i) through (iv) above, each Lender and the Borrower hereby waives and agrees not to assert (and the Borrower shall cause each other Loan Party to waive and agree not to assert) any right, claim or cause of action it might have against such Agent based thereon.
 
Section 10.6     Agents Individually .  Each Agent and its Affiliates may make loans and other extensions of credit to, acquire Stock and Stock Equivalents of, engage in any kind of business with, any Loan Party or Affiliate thereof as though it were not acting as such Agent and may receive separate fees and other payments therefor.  To the extent an Agent or any of its Affiliates makes any Loan or otherwise becomes a Lender hereunder, it shall have and may exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities as any other Lender and the terms "Lender" and "Required Lender" and any similar terms shall, except where otherwise expressly provided in any Loan Document, include, without limitation, such Agent or such Affiliate, as the case may be, in its individual capacity as Lender or as one of the Required Lenders, respectively.
 

 
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Section 10.7     Lender Credit Decision .  Each Lender acknowledges that it shall, independently and without reliance upon any Agent or any Lender or any of their Related Persons or upon any document (including the Disclosure Documents) solely or in part because such document was transmitted by such Agent or any of its Related Persons, conduct its own independent investigation of the financial condition and affairs of each Loan Party and make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under, any Loan Document or with respect to any transaction contemplated in any Loan Document, in each case based on such documents and information as it shall deem appropriate.  Except for documents expressly required by any Loan Document to be transmitted by a specific Agent to the Lenders, no Agent shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Loan Party or any Affiliate of any Loan Party that may come in to the possession of such Agent or any of its Related Persons.
 
Section 10.8     Expenses; Indemnities .  (a)  Each Lender agrees to reimburse each Agent and each of their respective Related Persons (to the extent not reimbursed by any Loan Party) promptly upon demand for such Lender's Pro Rata Share of any costs and expenses (including fees, charges and disbursements of financial, legal and other advisors and Other Taxes paid in the name of, or on behalf of, any Loan Party) that may be incurred by such Agent or any of its Related Persons in connection with the preparation, syndication, execution, delivery, administration, modification, consent, waiver or enforcement (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding or otherwise) of, or legal advice in respect of its rights or responsibilities under, any Loan Document or CDF2 Loan Document.
 
(b)     Each Lender further agrees to indemnify each Agent and each of their respective Related Persons (to the extent not reimbursed by any Loan Party), from and against such Lender's aggregate Pro Rata Share of the Liabilities (including taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made to on or for the account of any Lender) that may be imposed on, incurred by or asserted against such Agent or any of its Related Persons in any matter relating to or arising out of, in connection with or as a result of any Loan Document, CDF2 Loan Document or any other act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any action taken or omitted to be taken by such Agent or any of its Related Persons under or with respect to any of the foregoing; provided , however , that no Lender shall be liable to such Agent or any of its Related Persons to the extent such liability has resulted primarily from the gross negligence or willful misconduct of such Agent or, as the case may be, such Related Person, as determined by a court of competent jurisdiction in a final non-appealable judgment or order.
 
Section 10.9     Resignation of Collateral Agent .  (a)  The Collateral Agent may resign at any time by delivering notice of such resignation to the Lenders and the Borrower, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date that is 30 days after such notice is given.  If the Collateral Agent delivers any such notice, (i) if SG is a Lender or an Agent at the time of such notice of resignation, SG may choose, in its sole discretion, to be the Collateral Agent or (ii) if SG is not a Lender or Agent at such time or chooses not to be the Collateral Agent, then the Required Lenders shall have the right to appoint a successor Collateral Agent.  If, within 30 days after the retiring Collateral Agent having given
 

 
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notice of resignation, no successor Collateral Agent has been appointed by the Required Lenders that has accepted such appointment, then the retiring Collateral Agent may, on behalf of the Lenders, appoint a successor Collateral Agent from among the Lenders.  Each appointment under this clause (a) shall be subject to the prior written consent of the Borrower, which may not be unreasonably withheld but shall not be required during the continuance of a Default.
 
(b)     Effective immediately upon its resignation and the assignment of Liens in favor of the successor Collateral Agent or otherwise for the benefit of the Secured Parties, (i) the retiring Collateral Agent shall be discharged from its duties and obligations under the Loan Documents, (ii) the Lenders shall assume and perform all of the rights and duties of the Collateral Agent until a successor Collateral Agent shall have accepted a valid appointment hereunder, (iii) the retiring Collateral Agent and its Related Persons shall no longer have the benefit of any provision of any Loan Document other than with respect to any actions taken or omitted to be taken while such retiring Collateral Agent was, or because such Collateral Agent had been, validly acting as Collateral Agent under the Loan Documents and (iv) subject to its rights under Section 10.3 , the retiring Collateral Agent shall take such action as may be reasonably necessary to assign to the successor Collateral Agent its rights and Liens as Collateral Agent under the Loan Documents.  Effective immediately upon its acceptance of a valid appointment as Collateral Agent and the assignment of Liens from the retiring Collateral Agent, a successor Collateral Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Collateral Agent under the Loan Documents.
 
Section 10.10     Resignation of Administrative Agent .  (a)  The Administrative Agent may resign at any time by delivering notice of such resignation to the Lenders and the Borrower, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date that is 30 days after such notice is given.  If the Administrative Agent delivers any such notice, then the Required Lenders shall have the right to appoint a successor Administrative Agent.  If, within 30 days after the retiring Administrative Agent having given notice of resignation, no successor Administrative Agent has been, if applicable, appointed by the Required Lenders that has accepted such appointment, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent from among the Lenders.  Each appointment under this clause (a) shall be subject to the prior written consent of the Borrower, which may not be unreasonably withheld but shall not be required during the continuance of a Default.
 
(b)     Effective immediately upon its resignation, (i) the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Documents, (ii) if a successor Administrative Agent has not been appointed, the Lenders shall assume and perform all of the duties of the Administrative Agent until a successor Administrative Agent shall have accepted a valid appointment hereunder, (iii) the retiring Administrative Agent and its Related Persons shall no longer have the benefit of any provision of any Loan Document other than with respect to any actions taken or omitted to be taken while such retiring Administrative Agent was, or because such Administrative Agent had been, validly acting as Administrative Agent under the Loan Documents and (iv) subject to its rights under Section 10.3 , and if applicable under clause (a) above, the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights as Administrative Agent under the Loan Documents.  Effective immediately upon its acceptance of a valid appointment as Administrative Agent, a successor Administrative Agent shall succeed to, and become vested
 

 
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with, all the rights, powers, privileges and duties of the retiring Administrative Agent under the Loan Documents.
 
Section 10.11     Release of Collateral or Guarantors .  Each Lender hereby consents to the release and hereby directs the Collateral Agent to release (or, in the case of clause (b)(ii) below, release or subordinate) the following:
 
(a)     any Subsidiary of the Borrower from its guaranty of any Secured Obligation of any Loan Party if all of the Securities of such Subsidiary owned by any Group Member are Sold in a Sale permitted under the Loan Documents (including pursuant to a waiver or consent), to the extent that, after giving effect to such Sale, such Subsidiary would not be required to guaranty any Secured Obligations pursuant to Section 7.10 ;
 
(b)     any Lien held by the Collateral Agent for the benefit of the Secured Parties against (i) any Collateral that is Sold by a Loan Party in a Sale permitted by the Loan Documents (including pursuant to a valid waiver or consent), to the extent all Liens required to be granted in such Collateral pursuant to Section 7.10 after giving effect to such Sale have been granted, (ii) any property subject to a Lien permitted hereunder in reliance upon Section 8.2(d) or (e) and (iii) all of the Collateral and all Loan Parties, upon (A) termination of the Commitments and payment and satisfaction in full in cash of all Loans and all other Obligations that the Administrative Agent has been notified in writing are then due and payable, (B) deposit of cash collateral with respect to all contingent Secured Obligations (including Secured Hedging Obligations), in amounts and on terms and conditions and with parties satisfactory to the Administrative Agent and each Indemnitee that is owed such Obligations and (C) to the extent requested by the Administrative Agent, receipt by the Secured Parties of liability releases from the Loan Parties each in form and substance acceptable to the Administrative Agent; and
 
(c)     any Liens granted by Holdings on Digital Systems to secure the Revolving Loans upon (i) if no Revolving Loans are outstanding as of the end of the Availability Period, the last day of the Availability Period or (ii) if Revolving Loans are outstanding as of the end of the Availability Period, the date occurring on or after the Revolving Loan Conversion Date on which there has been a corresponding true-up of Rent (as defined in the CHG Lease Agreement) payable under the applicable schedules to the CHG Lease Agreement.
 
For the avoidance of doubt, that application of funds from the Collection Account in accordance with Section 4.4 or 4.5 of the Multiparty Agreement and, upon consent of the Administrative Agent, use of the Debt Service Reserve Account in accordance with the Multiparty Agreement to make payments of principal and interest do not constitute a release of Collateral and no Lender consent shall be required therefor.
 
Each Lender hereby directs the Administrative Agent and the Collateral Agent, and each such Agent hereby agrees, upon receipt of reasonable advance notice from the Borrower, to execute and deliver or file such documents and to perform other actions reasonably necessary to release the guaranties and Liens when and as directed in this Section 10.11 .
 
Section 10.12     Additional Secured Parties .  The benefit of the provisions of the Loan Documents directly relating to the Collateral or any Lien granted thereunder shall extend to and
 

 
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be available to any Secured Party that is not a Lender as long as, by accepting such benefits, such Secured Party agrees, as among the Collateral Agent and all other Secured Parties, that such Secured Party is bound by (and, if requested by the Collateral Agent, shall confirm such agreement in a writing in form and substance acceptable to the Collateral Agent) this Article X , Section 11.8 , Section 11.9 and Section 11.20 and the decisions and actions of the Collateral Agent and the Required Lenders (or, where expressly required by the terms of this Agreement, a greater or lesser proportion of the Lenders) to the same extent a Lender is bound; provided , however , that, notwithstanding the foregoing, (a) such Secured Party shall be bound by Section 10.8 only to the extent of Liabilities, costs and expenses with respect to or otherwise relating to the Collateral held for the benefit of such Secured Party, in which case the obligations of such Secured Party thereunder shall not be limited by any concept of Pro Rata Share or similar concept and (b) except as set forth herein specifically for such Secured Party, (i) each of the Collateral Agent and the Lenders shall be entitled to act at its sole discretion, without regard to the interest of such Secured Party, regardless of whether any Secured Obligation to such Secured Party thereafter remains outstanding, is deprived of the benefit of the Collateral, becomes unsecured or is otherwise affected or put in jeopardy thereby, and without any duty or liability to such Secured Party or any such Secured Obligation and (ii) such Secured Party shall not have any right to be notified of, consent to, direct, require or be heard with respect to, any action taken or omitted in respect of the Collateral or under any Loan Document.
 
Section 10.13     Removal of Agents .  Anything herein to the contrary notwithstanding, if at any time the Required Lenders determine that a Person serving as an Agent is (without taking into account any provision in the definition of "Defaulting Lender" requiring notice from the Administrative Agent or any other party) a Defaulting Lender, the Required Lenders (determined after giving effect to Section 11.1(c) ) may by notice to the Borrower and such Person remove such Person as such Agent (subject to any cure effected in accordance with Section 2.2(d) ) and appoint an applicable replacement Agent hereunder.  Such removal will, to the fullest extent permitted by applicable law, be effective on the earlier of (i) the date a replacement Agent is appointed and (ii) the date 30 days after the giving of such notice by the Required Lenders (regardless of whether a replacement Agent has been appointed).  Each appointment under this Section 10.13 shall be subject to the prior written consent of the Borrower, which may not be unreasonably withheld but shall not be required during the continuance of a Default.
 
ARTICLE XI
MISCELLANEOUS
 
Section 11.1     Amendments, Waivers, Etc .  (a)  No amendment or waiver of any provision of any Loan Document (other than the Fee Letter and the Control Agreements) and no consent to any departure by any Loan Party therefrom shall be effective unless the same shall be in writing and signed (i) in the case of an amendment, consent or waiver to cure any ambiguity, omission, defect or inconsistency, by the Administrative Agent, the Borrower and any other Loan Party which is a party to the Loan Document in question, (ii) in the case of granting a new Lien for the benefit of the Secured Parties or extending an existing Lien over additional property, by the Collateral Agent, the Borrower and any other Loan Party which is a party to the Loan Document in question, and (iii) in the case of any other amendment, consent or waiver, by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders), the Borrower and any other Loan Party which is a party to the Loan Document in question;
 

 
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provided , however , that no amendment, consent or waiver described in clauses (i), (ii) , or (iii) above shall, unless in writing and signed by each Lender directly affected thereby (or by the Administrative Agent with the consent of such Lender), in addition to any other Person the signature of which is otherwise required pursuant to any Loan Document, do any of the following:
 
(i)     waive any condition specified in Section 3.1 or Section 3.2 , except any condition referring to any other provision of any Loan Document;
 
(ii)     increase the Commitment of such Lender or subject such Lender to any additional obligation;
 
(iii)     reduce (including through release, forgiveness, assignment or otherwise) (A) the principal amount of, the interest rate on, or any obligation of the Borrower to repay (whether or not on a fixed date), any outstanding Loan owing to such Lender or (B) any fee or accrued interest payable to such Lender; provided , however , that this clause (iii) does not apply to any change to any provision increasing any interest rate or fee during the continuance of an Event of Default or to any payment of any such increase;
 
(iv)     waive or postpone any scheduled maturity date or other scheduled date fixed for the payment, in whole or in part, of principal of or interest on any Loan or fee owing to such Lender or for the reduction of such Lender's Commitment; provided , however , that this clause (iv) does not apply to any change to mandatory prepayments set forth in Sections 2.5(a) , 2.5(b) or 2.5(c) or to the application of any payment set forth in Section 2.9(b) .
 
(v)     except as provided in Section 10.11 , release all or substantially all of the Collateral, Holdings or Parent Holdings from its respective Pledge Agreement or any Guarantor from its guaranty of any Secured Obligation of the Borrower;
 
(vi)     reduce or increase the proportion of Lenders required for the Lenders (or any subset thereof) to take any action hereunder or change the definition of the terms "Required Lenders," "Pro Rata Share" or "Pro Rata Outstandings";
 
(vii)     amend Section 2.9(c) , Section 2.9(d) , Section 10.11 , Section 11.9 or this Section 11.1 ;
 
and provided , further , that (x) no amendment, waiver or consent shall affect the rights or duties under any Loan Document of, or any payment to, any Agent (or otherwise modify any provision of Article X or the application thereof) or any SPV that has been granted an option pursuant to Section 11.2(f) unless in writing and signed by such Agent or, as the case may be, such SPV in addition to any signature otherwise required and (y) the consent of the Borrower shall not be required to change any order of priority set forth in Section 2.9(c) .
 
(b)     Each waiver or consent under any Loan Document shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice to or demand on any Loan Party shall entitle any Loan Party to any notice or demand in the same, similar or other circumstances.  No failure on the part of any Secured Party to exercise, and no delay in
 

 
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exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.
 
(c)     Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, to the fullest extent permitted by applicable law, such Lender will not be entitled to vote in respect of amendments, consents and waivers hereunder and the outstanding Loans and/or Commitments of such Lender hereunder will not be taken into account in determining whether the Required Lenders or all of the Lenders, as required, have approved any such amendment, consent or waiver (and the definition of "Required Lenders" will automatically be deemed modified accordingly for the duration of such period); provided , that any such amendment, consent or waiver that would increase or extend the term of such Loans or Commitments of such Defaulting Lender, extend the date fixed for the payment of principal or interest owing to such Defaulting Lender hereunder, reduce the principal amount of any obligation owing to such Defaulting Lender, reduce the amount of or the rate or amount of interest on any amount owing to such Defaulting Lender or of any fee payable to such Defaulting Lender hereunder, or alter the terms of this proviso, will require the consent of such Defaulting Lender.
 
(d)     No amendment, waiver or consent with respect to this Agreement or any other Loan Document shall require the consent of a Secured Hedging Counterparty.
 
(e)     The Fee Letter and the Control Agreements may be amended, waived or otherwise modified in accordance with the terms thereof.
 
Section 11.2     Assignments and Participations; Binding Effect .  (a)   Binding Effect .  This Agreement shall become effective when it shall have been executed by the Borrower and each Agent and when the Administrative Agent shall have been notified by each Lender that such Lender has executed it.  Thereafter, it shall be binding upon and inure to the benefit of, but only to the benefit of, the Borrower (except for Article X ), each Agent and each Lender and, to the extent provided in Section 10.12 , each other Indemnitee and Secured Party and, in each case, their respective successors and permitted assigns.  Except as expressly provided in any Loan Document (including in 10.9 and 10.10 ), none of the Loan Parties, the Lenders or the Agents shall have the right to assign any rights or obligations hereunder or any interest herein.
 
(b)     Right to Assign .  Each Lender may sell, transfer, negotiate or assign all or a portion of its rights and obligations hereunder (including all or a portion of its Commitments and its rights and obligations with respect to Loans and any amounts on deposit in the DDTL Escrow Account) to (i) any existing Lender, (ii) any Affiliate or Approved Fund of any existing Lender or (iii) any Eligible Assignee consented to in writing by the Administrative Agent and the Borrower (which consent shall not be unreasonably withheld or delayed, and the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof) unless an Event of Default has occurred and is continuing, in which case, the Borrower's consent is not required; provided , however , that (x) such Sales must be ratable among the obligations owing to and owed by such Lender and (y) the aggregate outstanding principal amount (determined as of the effective date of the applicable Assignment) of the Loans and
 

 
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Commitments and amounts on deposit in the DDTL Escrow Account subject to any such Sale shall not be less than (1) in the case of the Initial Advance Term Loan Facility, $1,000,000 and (2) in the case of the Delayed Draw Term Loan Facility, the Revolving Facility and the amounts on deposit in the DDTL Escrow Account, $2,500,000, unless such Sale is made to an existing Lender or an Affiliate or Approved Fund of any existing Lender, is of the assignor's (together with its Affiliates' and Approved Funds') entire interest in the Loans and Commitments or is made with the prior written consent of the Borrower and the Administrative Agent.
 
(c)     Procedure .  The parties to each Sale made in reliance on clause (b) above (other than those described in clause (e) or (f) below) shall execute and deliver to the Administrative Agent (which shall keep a copy thereof) an Assignment, together with any existing Note subject to such Sale (or any affidavit of loss therefor acceptable to the Administrative Agent), any tax forms required to be delivered pursuant to Section 2.14(f) and payment by the assignee of an assignment fee in the amount of $3,500; provided that , (i) no assignment fee shall be due and payable with respect to assignments between Lenders and their respective Affiliates or Approved Funds, (ii) no assignment fee shall be due and payable with respect to assignments made by or to an Agent and (iii) in the case of multiple assignments occurring on the same Business Day to any permitted assignee referenced in clause (b) above and its respective Affiliates or Approved Funds, only one assignment fee shall be due and payable.  Upon receipt of all the foregoing, and conditioned upon such receipt, from and after the effective date specified in such Assignment, the Administrative Agent shall record or cause to be recorded in the Register the information contained in such Assignment.
 
(d)     Effectiveness .  Effective upon the entry of such record in the Register or an electronic settlement system designated by the Administrative Agent in accordance with clause (g) below, (i) such assignee shall become a party hereto and, to the extent that rights and obligations under the Loan Documents have been assigned to such assignee pursuant to such Assignment, shall have the rights and obligations of a Lender, (ii) any applicable Note shall be transferred to such assignee through such entry and (iii) the assignor thereunder shall, to the extent that rights and obligations under this Agreement have been assigned by it pursuant to such Assignment, relinquish its rights (except for those surviving the termination of the Commitments and the payment in full of the Obligations) and be released from its obligations under the Loan Documents, other than those relating to events or circumstances occurring prior to such assignment (and, in the case of an Assignment covering all or the remaining portion of an assigning Lender's rights and obligations under the Loan Documents, such Lender shall cease to be a party hereto except that each Lender agrees to remain bound by Article X , Section 11.8 and Section 11.9 to the extent provided in Section 10.12 ).
 
(e)     Grant of Security Interests .  In addition to the other rights provided in this Section 11.2 , each Lender may grant a security interest in, or otherwise assign as collateral, any of its rights under this Agreement, whether now owned or hereafter acquired (including rights to payments of principal or interest on the Loans and any amounts on deposit in the DDTL Escrow Account), to (A) any federal reserve bank (pursuant to Regulation A of the Federal Reserve Board) or other central banking authority with jurisdiction over such Lender, without notice to or the consent of the Administrative Agent or (B) any holder of, or trustee for the benefit of the holders of, such Lender's Securities by notice (but without the consent of) to the Administrative Agent; provided , however , that no such holder or trustee, whether because of such grant or
 

 
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assignment or any foreclosure thereon (unless such foreclosure is made through an assignment in accordance with clause (b) above), shall be entitled to any rights of such Lender hereunder and no such Lender shall be relieved of any of its obligations hereunder.  Notice to or the consent of the Borrower shall not be required with respect to any grant or assignment made pursuant to this clause (e).
 
(f)     Participants and SPVs .  In addition to the other rights provided in this Section 11.2 , each Lender may, (x) with notice to the Administrative Agent, grant to an SPV the option to make all or any part of any Loan that such Lender would otherwise be required to make hereunder (and the exercise of such option by such SPV and the making of Loans pursuant thereto shall satisfy the obligation of such Lender to make such Loans hereunder) and such SPV may assign to such Lender the right to receive payment with respect to any Obligation and (y) without notice to or consent from the Administrative Agent or the Borrower, sell participations to one or more Eligible Assignees in or to all or a portion of its rights and obligations under the Loan Documents (including all its rights and obligations with respect to the Loans); provided , however , that, whether as a result of any term of any Loan Document or of such grant or participation, (i) no such SPV or participant shall have a commitment, or be deemed to have made an offer to commit, to make Loans hereunder, and, except as provided in the applicable option agreement, none shall be liable for any obligation of such Lender hereunder, (ii) such Lender's rights and obligations, and the rights and obligations of the Loan Parties and the Secured Parties towards such Lender, under any Loan Document shall remain unchanged and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the Obligations in the Register, except that (A) each such participant and SPV shall be entitled to the benefit of Sections 2.12 and 2.13 , but only to the extent such participant or SPV delivers the tax forms such Lender is required to collect pursuant to Section 2.14(f) and such Lender complies with the requirements of Section 2.11(a) then only to the extent of any amount to which such Lender would be entitled in the absence of any such grant or participation and (B) each such SPV may receive other payments that would otherwise be made to such Lender with respect to Loans funded by such SPV to the extent provided in the applicable option agreement and set forth in a notice provided to the Administrative Agent by such SPV and such Lender, provided , however , that in no case (including pursuant to clause (A) or (B) above) shall an SPV or participant have the right to enforce any of the terms of any Loan Document, and (iii) the consent of such SPV or participant shall not be required (either directly, as a restraint on such Lender's ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Loan Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Loan Documents (including the right to enforce or direct enforcement of the Obligations), except for those described in clauses (iii) and (iv) of Section 11.1(a) with respect to amounts, or dates fixed for payment of amounts, to which such participant or SPV would otherwise be entitled and, in the case of participants, except for those described in Section 11.1(a)(v) (or amendments, consents and waivers with respect to Section 10.11 to release all or substantially all of the Collateral).  No party hereto shall institute (and the Borrower shall cause each other Loan Party not to institute) against any SPV grantee of an option pursuant to this clause (f) any bankruptcy, reorganization, insolvency, liquidation or similar proceeding, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper of such SPV; provided , however , that each Lender having designated an SPV as such agrees to indemnify each Indemnitee against any Liability that may be incurred by, or asserted against, such Indemnitee as a result of failing to institute such
 

 
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proceeding (including a failure to get reimbursed by such SPV for any such Liability).  The agreement in the preceding sentence shall survive the termination of the Commitments and the payment in full of the Obligations.
 
(g)     Electronic Execution of Assignments .  The words "execution," "signed," "signature," and words of like import in any Assignment shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
 
Section 11.3     Costs and Expenses .  Any action taken by any Loan Party under or with respect to any Loan Document, even if required under any Loan Document or at the request of any Secured Party, shall be at the expense of such Loan Party, and no Secured Party shall be required under any Loan Document to reimburse any Loan Party or Group Member therefor except as expressly provided therein.  In addition, the Borrower agrees to pay or reimburse upon demand (a) the Agents for all reasonable out-of-pocket costs and expenses incurred by any of them or any of their Related Persons in connection with the investigation, development, preparation, negotiation, syndication, execution, interpretation or administration of, any modification of any term of or termination of, any Loan Document, any CDF2 Loan Document, any commitment or proposal letter therefor, any other document prepared in connection therewith or the consummation and administration of any transaction contemplated therein (including periodic audits in connection therewith and environmental audits and assessments), in each case including the reasonable fees, charges and disbursements of legal counsel to the Administrative Agent or such Related Persons, fees, costs and expenses incurred in connection with Intralinks ® or any other E-System and allocated to the Facilities by the Administrative Agent in its sole discretion and, in the case of any such fees, costs, charges, and disbursements for which arrangements satisfactory to the parties entitled to payment thereof shall have been made for payment or reimbursement after the Effective Date, the Borrower agrees to pay or reimburse such amounts as provided in such arrangements, (b) the Administrative Agent and Collateral Agent for all reasonable costs and expenses incurred by any of them or any of their Related Persons in connection with internal audit reviews, field examinations and Collateral examinations (which shall be reimbursed, in addition to the out-of-pocket costs and expenses of such examiners, at the per diem rate per individual charged by the Administrative Agent or the Collateral Agent for its examiners) and (c) each of the Agents, their Related Persons, and each Lender for all costs and expenses incurred in connection with (i) any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a "work-out," (ii) the enforcement or preservation of any right or remedy under any Loan Document, any CDF2 Loan Document, any Obligation, with respect to the Collateral or any other related right or remedy or (iii) the commencement, defense, conduct of, intervention in, or the taking of any other action with respect to, any proceeding (including any bankruptcy or insolvency proceeding) related to any Loan Party, Loan Document, any CDF2 Loan Document or Obligation (or the response to and preparation for any subpoena or request for document production relating thereto), including fees and disbursements of counsel (including allocated costs of internal counsel).
 

 
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Section 11.4     Indemnities .  (a)  The Borrower agrees to indemnify, hold harmless and defend each Agent, each Lender, each Person (other than the Borrower) party to a Secured Hedging Document and each of their respective Related Persons (each such Person being an " Indemnitee ") from and against all Liabilities (including brokerage commissions, fees and other compensation) that may be imposed on, incurred by or asserted against any such Indemnitee in any matter relating to or arising out of, in connection with or as a result of (i) any Loan Document, any CDF2 Loan Document, any Disclosure Document, any Obligation (or the repayment thereof), the use or intended use of the proceeds of any Loan or any securities filing of, or with respect to, any Loan Party, (ii) any commitment letter, proposal letter or term sheet with any Person or any Contractual Obligation, arrangement or understanding with any broker, finder or consultant, in each case entered into by or on behalf of any Loan Party or any Affiliate of any of them in connection with any of the foregoing and any Contractual Obligation entered into in connection with any E-Systems or other Electronic Transmissions and this Agreement or the transactions contemplated hereby, (iii) any actual or prospective investigation, litigation or other proceeding relating to any of the matters described in clause (i) or (ii) of this Section 11.4(a) , whether or not brought by any such Indemnitee or any of its Related Persons, any holders of Securities or creditors (and including reasonable attorneys' fees in any case), whether or not any such Indemnitee, Related Person, holder or creditor is a party thereto, and whether or not based on any securities or commercial law or regulation or any other Requirement of Law or theory thereof, including common law, equity, contract, tort or otherwise, or (iv) any other act, event or transaction related, contemplated in or attendant to any of the foregoing (collectively, the " Indemnified Matters "); provided , however , that the Borrower shall not have any liability under this Section 11.4 to any Indemnitee with respect to any Indemnified Matter, and no Indemnitee shall have any liability with respect to any Indemnified Matter (to the extent such Indemnitee would otherwise be liable) other than, to the extent such liability has resulted solely from the gross negligence or willful misconduct of such Indemnitee, as determined by a court of competent jurisdiction in a final non-appealable judgment or order.  Furthermore, the Borrower waives and agrees not to assert against any Indemnitee, and shall cause each other Loan Party to waive and not assert against any Indemnitee, any right of contribution with respect to any Liabilities that may be imposed on, incurred by or asserted against any Related Person.
 
(b)     Without limiting the foregoing, " Indemnified Matters " includes all Environmental Liabilities, including those arising from, or otherwise involving, any property of any Related Person or any actual, alleged or prospective damage to property or natural resources or harm or injury alleged to have resulted from any Release of Hazardous Materials on, upon or into such property or natural resource or any property on or contiguous to any real property of any Related Person, whether or not, with respect to any such Environmental Liabilities, any Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the successor-in-interest to any Related Person or the owner, lessee or operator of any property of any Related Person through any foreclosure action, in each case except to the extent such Environmental Liabilities (i) are incurred solely following foreclosure by any Secured Party or following any Secured Party having become the successor-in-interest to any Loan Party and (ii) are attributable solely to acts of such Indemnitee.
 
Section 11.5     Survival .  Any indemnification or other protection provided to any Indemnitee pursuant to any Loan Document (including pursuant to Section 2.13 , Section 2.14 , Article X , Section 11.3 , Section 11.4 or this Section 11.5 ) and all representations and warranties
 

 
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made in any Loan Document shall (A) survive the termination of the Commitments and the payment in full of the Obligations and (B) inure to the benefit of any Person that at any time held a right thereunder (as an Indemnitee or otherwise) and, thereafter, its successors and permitted assigns.
 
Section 11.6     Limitation of Liability for Certain Damages .  In no event shall any Indemnitee be liable on any theory of liability for any special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings).  The Borrower hereby waives, releases and agrees (and shall cause each other Loan Party to waive, release and agree) not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.
 
Section 11.7     Lender-Creditor Relationship .  The relationship between the Lenders and the Agents, on the one hand, and the Loan Parties, on the other hand, is solely that of lender and creditor.  No Secured Party has any fiduciary relationship or duty to any Loan Party arising out of or in connection with, and there is no agency, tenancy or joint venture relationship between the Secured Parties and the Loan Parties by virtue of, any Loan Document or any transaction contemplated therein.
 
Section 11.8     Right of Setoff .  Each of the Administrative Agent, the Collateral Agent, each Lender and each Affiliate (including each branch office thereof) of any of them is hereby authorized, without notice or demand (each of which is hereby waived by the Borrower), at any time and from time to time during the continuance of any Event of Default and to the fullest extent permitted by applicable Requirements of Law, to set off and apply any and all deposits (whether general or special, time or demand, provisional or final) at any time held and other Indebtedness, claims or other obligations at any time owing by the Administrative Agent, the Collateral Agent, such Lender or any of their respective Affiliates to or for the credit or the account of the Borrower against any Obligation of any Loan Party now or hereafter existing, whether or not any demand was made under any Loan Document with respect to such Obligation and even though such Obligation may be unmatured provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.17 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent  and the Delayed Draw Term Loan Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  Each of the Administrative Agent, the Collateral Agent and each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender or its Affiliates; provided , however , that the failure to give such notice shall not affect the validity of such setoff and application.  The rights under this Section 11.8 are in addition to any other rights and remedies (including other rights of setoff) that the Administrative Agent, the Collateral Agent and the Lenders and their Affiliates and other Secured Parties may have.
 
Section 11.9     Sharing of Payments, Etc .  If any Lender, directly or through an Affiliate or branch office thereof, obtains any payment of any Obligation of any Loan Party (whether voluntary, involuntary or through the exercise of any right of setoff or the receipt of any
 

 
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Collateral or " proceeds " (as defined under the applicable UCC) of Collateral) other than pursuant to Sections 2.13 , 2.14 , 2.15 and 11.2 and such payment exceeds the amount such Lender would have been entitled to receive if all payments had gone to, and been distributed by, the Administrative Agent in accordance with the provisions of the Loan Documents, such Lender shall purchase for cash from other Secured Parties such participations in their Obligations as necessary for such Lender to share such excess payment with such Secured Parties to ensure such payment is applied as though it had been received by the Administrative Agent and applied in accordance with this Agreement (or, if such application would then be at the discretion of the Borrower, applied to repay the Obligations in accordance herewith); provided , however , that (a) if such payment is rescinded or otherwise recovered from such Lender in whole or in part, such purchase shall be rescinded and the purchase price therefor shall be returned to such Lender without interest and (b) such Lender shall, to the fullest extent permitted by applicable Requirements of Law, be able to exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.
 
Section 11.10     Marshaling; Payments Set Aside .  No Secured Party shall be under any obligation to marshal any property in favor of any Loan Party or any other party or against or in payment of any Obligation.  To the extent that any Secured Party receives a payment from the Borrower, from the proceeds of the Collateral, from the exercise of its rights of setoff, any enforcement action or otherwise, and such payment is subsequently, in whole or in part, invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not occurred.
 
Section 11.11     Notices .  (a)   Addresses .  All notices, demands, requests, directions and other communications required or expressly authorized to be made by this Agreement shall, whether or not specified to be in writing but unless otherwise expressly specified to be given by any other means, be given in writing and (i) addressed to, with respect to any party, the Persons and addresses specified under such party's name on Schedule II or on the signature page of any applicable Assignment, (ii) except as provided in Section 11.11(b) , posted to Intralinks ® (to the extent such system is available and set up by or at the direction of the Administrative Agent prior to posting) in an appropriate location by uploading such notice, demand, request, direction or other communication to www.intralinks.com, faxing it to 866-545-6600 with an appropriate bar-coded fax coversheet or using such other means of posting to Intralinks ® as may be available and reasonably acceptable to the Administrative Agent prior to such posting, (iii) except as provided in Section 11.11(b) , posted to any other E-System set up by or at the direction of the Administrative Agent in an appropriate location or (iv) addressed to such other address as shall be notified in writing (A) in the case of the Borrower and the Administrative Agent, to the other parties hereto and (B) in the case of all other parties, to the Borrower and the Administrative Agent.  Transmission by electronic mail (including E-Fax, even if transmitted to the fax numbers set forth in clause (i) above) shall not be sufficient or effective to transmit any such notice under this clause (a) unless such transmission is an available means to post to any E-System.
 
(b)     Effectiveness .  All communications described in clause (a) above and all other notices, demands, requests and other communications made in connection with this Agreement
 

 
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shall be effective and be deemed to have been received (i) if delivered by hand, upon personal delivery, (ii) if delivered by overnight courier service, one Business Day after delivery to such courier service, (iii) if delivered by mail, when deposited in the mails, (iv) if delivered by facsimile, including E-Fax (other than to post to an E-System pursuant to clause (a)(ii) or (a)(iii) above), upon sender's receipt of confirmation of proper transmission, and (iv) if delivered by posting to any E-System, on the later of the date of such posting in an appropriate location and the date access to such posting is given to the recipient thereof in accordance with the standard procedures applicable to such E-System; provided , however , that no communications to the Administrative Agent pursuant to Article II or Article X shall be effective until received by the Administrative Agent and no notice, demand, request, direction or other communication to any Loan Party pursuant to Section 9.1 shall be effective unless given in accordance with the methods described in clauses (i) through (iv) (other than by E-Fax) of this Section 11.11(b) .
 
Section 11.12     Electronic Transmissions .  (a)   Authorization .  Subject to the provisions of Section 11.11 , each of the Administrative Agent, the Borrower, the Lenders and each of their Related Persons is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in connection with any Loan Document and the transactions contemplated therein.  The Borrower and each Secured Party hereby acknowledges and agrees, and the Borrower shall cause each other Loan Party to acknowledge and agree, that the use of Electronic Transmissions is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic Transmissions.
 
(b)     Signatures .  Subject to the provisions of Section 11.11 , (i) (A) no posting to any E-System shall be denied legal effect merely because it is made electronically, (B) each E-Signature on any such posting shall be deemed sufficient to satisfy any requirement for a "signature" and (C) each such posting shall be deemed sufficient to satisfy any requirement for a "writing," in each case including pursuant to any Loan Document, any applicable provision of any UCC, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement of Law governing such subject matter, (ii) each such posting that is not readily capable of bearing either a signature or a reproduction of a signature may be signed, and shall be deemed signed, by attaching to, or logically associating with such posting, an E-Signature, upon which each Secured Party and Loan Party may rely and assume the authenticity thereof, (iii) each such posting containing a signature, a reproduction of a signature or an E-Signature shall, for all intents and purposes, have the same effect and weight as a signed paper original and (iv) each party hereto or beneficiary hereto agrees not to contest the validity or enforceability of any posting on any E-System or E-Signature on any such posting under the provisions of any applicable Requirement of Law requiring certain documents to be in writing or signed; provided , however , that nothing herein shall limit such party's or beneficiary's right to contest whether any posting to any E-System or E-Signature has been altered after transmission.
 
(c)     Separate Agreements .  All uses of an E-System shall be governed by and subject to, in addition to Section 11.11 and this Section 11.12 , separate terms and conditions posted or referenced in such E-System and related Contractual Obligations executed by the Secured Parties and the Loan Parties in connection with the use of such E-System.
 

 
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(d)     LIMITATION OF LIABILITY .  ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED "AS IS" AND "AS AVAILABLE".  NONE OF AGENTS, ANY LOAN PARTY OR ANY OF THEIR RESPECTIVE RELATED PERSONS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION, AND EACH DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS THEREIN.  NO WARRANTY OF ANY KIND IS MADE BY THE AGENTS, ANY LOAN PARTY OR ANY OF THEIR RESPECTIVE RELATED PERSONS IN CONNECTION WITH ANY E-SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS.   The Borrower and each Secured Party agrees (and the Borrower shall cause each other Loan Party to agree) that neither the Agents nor any Loan Party has any responsibility for maintaining or providing any equipment, software, services or any testing required in connection with any Electronic Transmission or otherwise required for any E-System.
 
Section 11.13     Governing Law .  This Agreement, each other Loan Document that does not expressly set forth its applicable law, and the rights and obligations of the parties hereto and thereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 
Section 11.14     Jurisdiction .  (a)   Submission to Jurisdiction .  Any legal action or proceeding with respect to any Loan Document may be brought in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States for the Southern District of New York and, by execution and delivery of this Agreement, each party hereto hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  The parties hereto (and, to the extent set forth in any other Loan Document, each other Loan Party) hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens , that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.
 
(b)     Service of Process .  Each party hereto (and, to the extent set forth in any other Loan Document, each other Loan Party) hereby irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States with respect to or otherwise arising out of or in connection with any Loan Document by any means permitted by applicable Requirements of Law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of each party hereto specified in Section 11.11 (and shall be effective when such mailing shall be effective, as provided therein).  Each party hereto (and, to the extent set forth in any other Loan Document, each other Loan Party) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
 
(c)     Non-Exclusive Jurisdiction .  Nothing contained in this Section 11.14 shall affect the right of the Agents, any Lender or any Loan Party to serve process in any other manner permitted by applicable Requirements of Law or the right of any party hereto to commence legal
 

 
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proceedings or otherwise proceed against any party hereto, any Loan Party or any of the Collateral in any other jurisdiction.
 
Section 11.15     WAIVER OF JURY TRIAL .  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS, AS APPLICABLE, BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.15 .
 
Section 11.16     Severability .  Any provision of any Loan Document being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of any Loan Document or any part of such provision in any other jurisdiction.
 
Section 11.17     Execution in Counterparts .  This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Agreement by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.
 
Section 11.18     Entire Agreement .  The Loan Documents embody the entire agreement of the parties and supersede all prior agreements and understandings relating to the subject matter thereof and any prior letter of interest, commitment letter, fee letter, confidentiality and similar agreements involving any Loan Party and any of the Agents or any Lender or any of their respective Affiliates relating to a financing of substantially similar form, purpose or effect.  In the event of any conflict between the terms of this Agreement and any other Loan Document, the terms of this Agreement shall govern (unless such terms of such other Loan Documents are necessary to comply with applicable Requirements of Law, in which case such terms shall govern to the extent necessary to comply therewith).
 
Section 11.19     Use of Name .  The Borrower agrees, and shall cause each other Loan Party to agree, that it shall not, and none of its Affiliates shall, issue any press release or other public disclosure (other than any document filed with any Governmental Authority relating to a public offering of the Securities of any Loan Party) using the name, logo or otherwise referring to (a) any Agent, any Arranger, any Bookrunner, any "syndication agent" or any "documentation agent" or of any of their respective Affiliates, (b) the Loan Documents or (c) any transaction contemplated therein to which the Secured Parties are party without at least 2 Business Days' prior notice to such Person and without the prior consent of such Person except to the extent
 

 
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required to do so under applicable Requirements of Law and then, only after consulting with such Person prior thereto.
 
Section 11.20     Non-Public Information; Confidentiality .  (a)  Each Lender acknowledges and agrees that it may receive material non-public information hereunder concerning the Loan Parties and their Affiliates and Securities and agrees to use such information in compliance with all relevant policies, procedures and Contractual Obligations and applicable Requirements of Laws (including United States federal and state security laws and regulations).
 
(b)     Each Lender and each Agent agrees to use all reasonable efforts to maintain, in accordance with its customary practices, the confidentiality of information obtained by it pursuant to any Loan Document and designated in writing by any Loan Party as confidential, except that such information may be disclosed (i) with the Borrower's prior written consent, (ii) to Related Persons of such Lender or Agent, as the case may be, that are advised of the confidential nature of such information and are instructed to keep such information confidential, (iii) to the extent such information presently is or hereafter becomes available to such Lender or Agent, as the case may be, on a non-confidential basis from a source other than any Loan Party, (iv) to the extent disclosure is required by applicable Requirements of Law or other legal process or requested or demanded by any Governmental Authority, (v) to the extent necessary or customary for inclusion in league table measurements or in any tombstone or other advertising materials ( provided that disclosure in any tombstone or other advertising materials shall be limited to matters previously disclosed in any press release made by or on behalf of a Loan Party or Cinedigm or otherwise consented to in writing by the Borrower), (vi) to the National Association of Insurance Commissioners or any similar organization, any examiner or any nationally recognized rating agency or otherwise to the extent consisting of general portfolio information that does not identify the Borrower or any other Loan Party, (vii) to current or prospective assignees, any Eligible Assignee invited to be a Lender pursuant to Section 2.18 , SPVs grantees of any option described in Section 11.2(f) or participants, direct or contractual counterparties to any Secured Hedging Document or any Hedging Agreement permitted hereunder and to their respective Related Persons, in each case to the extent such assignees, participants, counterparties or Related Persons agree to be bound by provisions substantially similar to the provisions of this Section 11.20 , (viii) to CHG and (ix) in connection with the exercise of any remedy under any Loan Document.  In the event of any conflict between the terms of this Section 11.20 and those of any other Contractual Obligation entered into with any Loan Party (whether or not a Loan Document), the terms of this Section 11.20 shall govern.
 
Section 11.21     USA Patriot Act; OFAC .  Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the " Act "), it is required to obtain, verify and record information that identifies the Borrower, each other Loan Party and each shareholder of the Borrower holding 10% or more of the outstanding common shares, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act. In addition, Borrower agrees to (a) ensure that no Person who owns a controlling interest in or otherwise controls Borrower or any Subsidiary of Borrower is or shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of
 

 
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Foreign Assets Control of the United States Treasury Department (" OFAC "), the Department of the Treasury or included in any Executive Order of the President of the United States, (b) not to use or permit the use of proceeds of the Obligations to violate any of the foreign asset control regulations of the OFAC or any enabling statute or Executive Order of the President of the United States relating thereto, and (c) comply, or cause its Subsidiaries to comply, with the applicable laws.
 
[SIGNATURE PAGES FOLLOW]
 

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

 
 
CINEDIGM DIGITAL FUNDING 2, LLC, as
Borrower
   By:  
 
 
/s/ Gary S. Loffredo
   Name:
Gary S. Loffredo
   Title:
General Counsel and Secretary
     

Signature Page to Credit Agreement
 
 

 

 
 
SOCIÉTÉ GÉNÉRALE, NEW YORK
BRANCH, as Administrative Agent, Collateral
Agent and Lender
   By:
 
 
 
/s/ Richard O. Knowlton
   Name:
Richard O. Knowlton
   Title:
Managing Director
     


 
Signature Page to Credit Agreement
 
 

 
 
 
 
NATIXIS NEW YORK BRANCH, as Lender
   By:
 
 
 
 
/s/ Gerardo Canet
   Name:
Gerardo Canet
   Title:
Director
     

 
   By:
 
 
 
/s/ Frank H. Madden, Jr.
   Name:
Frank H. Madden, Jr. 
   Title:
Managing Director 
     



 
Signature Page to Credit Agreement
 
 

 

 
 
ING  CAPITAL LLC, as Lender
   By:
 
 
 
 
/s/ Stephen Nettler  
   Name:
Stephen Nettler 
   Title:
Managing Director 
     


Signature Page to Credit Agreement
 
 

 

 
 
TD BANK, N.A., as Lender
   By:
 
 
 
 
/s/ Michael J. Ferrara 
   Name:
Michael J. Ferrara 
   Title:
Vice President
     

 


Signature Page to Credit Agreement
 
 

 

SCHEDULE I

COMMITMENTS


Revolving Loan Lender
Revolving Loan Commitment
Société Générale, New York Branch
$2,500,000
Total:
$2,500,000


Term Loan Lender
Initial Advance Term Loan Commitment
Société Générale, New York Branch
$10,500,000
Natixis New York Branch
$9,500,000
ING Capital LLC
$5,000,000
Total:
$25,000,000

Term Loan Lender
Delayed Draw Term Loan Commitment
Société Générale, New York Branch
$13,000,000
Natixis New York Branch
$10,500,000
ING Capital LLC
$13,500,000
TD Bank, N.A.
$13,000,000
Total:
$50,000,000
 
 
 

 

Schedule I
 
 

 


SCHEDULE II

ADDRESSES FOR NOTICES



Lender                                                                                             Address for Notice

Société Générale, New York Branch                                                  1221 Avenue of the Americas
New York, NY
Attention: Justine Dupont-Nivet
Facsimile: 212-278-6136
Telephone: 212.278.5915
Email: justine.dupont-nivet@sgcib.com

Natixis New York Branch                                                                    9 West 57 th Street, 35 th Floor
New York, NY 10019
Attention: Gerardo Canet
Facsimile:  212-891-6119
Telephone:  212-872-5136



Borrower                                                                                     Address for Notice

Cinedigm Digital Funding 2, LLC                                                      55 Madison Avenue, Suite 300
Morristown, New Jersey 07960
Attention: General Counsel
Facsimile: 973-290-0081
Telephone: 973-290-0027
 
 
 

Schedule II
 
 

 

SCHEDULE 3.1
 
 
Conditions Precedent to Effectiveness

(a)     Certain Documents .  The Administrative Agent shall have received on or prior to the Effective Date each of the following, each dated the Effective Date (or such other date as may be indicated below) unless otherwise agreed by the Administrative Agent, in form and substance satisfactory to the Administrative Agent, and each Lender:
 
(i)     this Agreement duly executed by the Borrower and, for the account of each Lender requesting the same by notice to the Administrative Agent and the Borrower received by each at least three (3) Business Days prior to the Effective Date (or such later date as may be agreed by the Borrower), Notes conforming to the requirements set forth in Section 2.11(e) ;
 
(ii)     the Guaranty and Security Agreement, duly executed by the Borrower and each Guarantor, and the Pledge Agreements, duly executed by Holdings and Parent Holdings, as applicable, together with (A) copies of UCC, tax, judgment lien, Intellectual Property and other appropriate search reports and of all effective prior filings listed therein, together with evidence of the termination of such prior filings and other documents with respect to the priority of the security interest of the Collateral Agent in the Collateral, in each case, as may be reasonably requested by the Administrative Agent or the Collateral Agent, (B) proper financing statements (including Intellectual Property financing statements), duly prepared for filing under the Uniform Commercial Code or other applicable law of all jurisdictions that the Collateral Agent may reasonably deem necessary or desirable in order to perfect the liens and security interests created under the Loan Documents covering the Collateral described in the Loan Documents, (C) all certificates representing all Securities being pledged pursuant to such Guaranty and Security Agreement and the Pledge Agreements and related undated powers or endorsements duly executed in blank, and (D) all Control Agreements in favor of the Collateral Agent that, in the reasonable judgment of the Administrative Agent, are required for the Loan Parties to comply with the Loan Documents as of the Effective Date (including without limitation with respect to the Holdings Operating Account), each duly executed by, in addition to the applicable Loan Party, the applicable Deposit Bank;
 
(iii)     duly executed opinions of counsel to the Loan Parties, each addressed to the Administrative Agent, the Collateral Agent and the Lenders and addressing such matters as the Administrative Agent or Lenders may reasonably request (including, without limitation, non-consolidation, true sale/contribution, true lease and corporate separateness opinions);
 
(iv)     a copy of each Constituent Document of each Loan Party that is on file with any Governmental Authority in any jurisdiction, and certified as of a recent date by such Governmental Authority, together with, if applicable, certificates attesting to the good standing of such Loan Party in its jurisdiction of organization and each other jurisdiction where such Loan Party is qualified to do business as a foreign entity or where such qualification is necessary (and, if appropriate in any such jurisdiction, related tax certificates);
 

Schedule 3.1
 
 

 

(v)     a certificate of the secretary or other officer of each Loan Party in charge of maintaining books and records of such Loan Party certifying as to (A) the names and signatures of each officer of such Loan Party authorized to execute and deliver any Loan Document, (B) the Constituent Documents of such Loan Party attached to such certificate are complete and correct copies of such Constituent Documents as in effect on the date of such certification and (C) the resolutions of such Loan Party's board of directors or other appropriate governing body approving and authorizing the execution, delivery and performance of each Loan Document to which such Loan Party is a party;
 
(vi)     a certificate of the President, Chief Executive Officer or Chief Financial Officer of the Borrower certifying that as of the Effective Date (A) the representations and warranties of the Loan Parties set forth in any Loan Document shall be true and correct on and as of such date, (B) no Default has occurred and is continuing, (C) all conditions precedent to such proposed Borrowing (including availability restrictions) have been satisfied or will be satisfied substantially concurrently with the funding of the proposed Borrowing and (D) no default or event of default (or any event which with the giving of notice or lapse of time or both will be a default or event of default) shall occur as a result of, and after giving effect to, the Effective Date or the transactions contemplated by the Loan Documents under any Loan Party's Indebtedness or material Contractual Obligations;
 
(vii)     insurance certificates and endorsements in form and substance satisfactory to the Collateral Agent demonstrating that the insurance policies required by Section 7.5 (other than any insurance policies in respect of equipment subject to an Exhibitor Agreement which policies are maintained by the applicable Approved Exhibitor in accordance with the terms of such Exhibitor Agreement) are in full force and effect and have all terms required by Section 7.5 ;
 
(viii)     the Consents, duly executed by the respective Distributors and Approved Exhibitors, as applicable;
 
(ix)    the Multiparty Agreement duly executed by the parties thereto; and
 
(x)     consents, waivers, acknowledgements and other agreements from any Loan Party or third parties which the Administrative Agent or the Collateral Agent may reasonably deem necessary in order to permit, protect or perfect the Collateral Agent's security interests in and Liens upon the Collateral and to effectuate the provisions of this Agreement and the other Loan Documents, including, without limitation, mortgagee or landlord waivers, estoppel certificates, bailee letters, consignment notices and other similar agreements.
 
(b)     Capital Structure .  The Lenders shall be satisfied with the management, corporate and capital structure of Holdings and its Subsidiaries, and all legal and tax (including pass-through treatment) aspects relating thereto. Without limitation of the foregoing, the Lenders shall be satisfied that, as of the Effective Date, Parent Holdings directly owns and controls 100% of the Voting Stock of Holdings.
 
(c)     Mezzanine and Lease Financing Structure .  The Administrative Agent shall have received evidence satisfactory to it that (i) Cinedigm has made a cash capital contribution of at least $2,000,000 to Parent Holdings in the form of common Stock and that all of such cash
 

Schedule 3.1
 
 

 

capital has been contributed as common equity by Parent Holdings to Holdings and then by Holdings to the Borrower, in each case, in accordance with Section 4.2(iii) of the Multiparty Agreement, (ii) the Approved Vendors have committed to advance to Holdings the Required Vendor Mezzanine Loans, (iii) the CHG Lease Facility Documents provide an aggregate commitment by CHG to fund not less than $23,050,000 to Holdings (without giving effect to advances funded with the proceeds of the CDF2 Non-Recourse Loans), and (iv) all conditions precedent to the effectiveness of the CHG Lease Facility Documents shall have been satisfied or be satisfied concurrently with the effectiveness of this Agreement and the CHG Lease Facility Documents shall be in full force and effect concurrently with the effectiveness of this Agreement.  In connection with the foregoing, the Borrower shall have delivered the following to the Administrative Agent: (x) the fully executed CHG Lease Facility Documents, (y) the fully executed CDF2 Loan Documents and (z) the fully executed documentation evidencing the Required Vendor Mezzanine Loans.
 
(d)     Installation Management Fees .  The Administrative Agent shall have received evidence satisfactory to it that Cinedigm will be paid not less than $1,000 per screen of the Installation Management Fee by Holdings in the form of subordinated debt pursuant to documentation in form and substantive satisfactory to the Administrative Agent.
 
(e)     Material Contracts .  All material contracts of the Group Members (including the Management Services Agreement, the CDF2 Loan Documents, and the Sale and Contribution Agreement) shall be in full force and effect concurrently with the effectiveness of this Agreement.  All material contracts of Parent Holdings and Holdings (including, without limitation, (i) all Exhibitor Agreements, including shortfall support, (ii) all Service Agreements, (iii) all Digital Cinema Deployment Agreements, (iv) the Management Services Agreement, (v) all Supply Agreements, (vi) the CHG Lease Facility Documents, (vii) the IP Licenses shall be in full force and effect and all applicable rights of Parent Holdings and Holdings, as applicable, thereunder have been assigned to the Borrower on terms and conditions and pursuant to documentation acceptable to the Lenders.
 
(f)     Minimum Screens .  Holdings shall have entered into Exhibitor Agreements in respect of no fewer than 800 screens at such locations as are satisfactory to the Bookrunners.
 
(g)     Evidence of Ability to Monitor .  The Administrative Agent shall have received evidence satisfactory to it of Cinedigm's ability to monitor use of each Installed Digital System and reconcile such use to billing records in a manner that clearly identifies exhibition of content on each Installed Digital System for which a VPF is or may be billed, including sample account allocation reports demonstrating Cinedigm's ability to allocate collections under each Digital Cinema Deployment Agreement, (i) on a screen by screen basis or a complex by complex basis, as required pursuant to the terms of each Digital Cinema Deployment Agreement, and (ii) by VPF Rate, in each case, to the Administrative Agent's satisfaction
 
(h)     Absence of Litigation .  There shall not exist any action, suit, investigation, litigation or proceeding pending or threatened in any court or before any Governmental Authority that has or could reasonably be expected to have a material adverse effect on Cinedigm, Parent Holdings, Holdings, Borrower or its Subsidiaries, the Facilities or any of the transactions contemplated hereby.
 

Schedule 3.1
 
 

 

(i)     Receipt of Pro Forma Financial Statements, Business Plan and Budget .  The Lenders shall have received and be satisfied with (i) the Initial Financial Statements described in clause (a) of the definition thereof, (ii) the Borrower's   business plan which shall include the Initial Projections and (iii) a Budget for the period following the Effective Date through December 31, 2012.
 
(j)     Outstanding Debts and Liens .  The instruments governing Indebtedness, material contracts and Constituent Documents of the Loan Parties shall be acceptable to the Administrative Agent.
 
(k)     Evidence of Solvency .  The Administrative Agent shall have received a certificate of the Chief Financial Officer of each of Holdings and the Borrower certifying that as of the Effective Date each Loan Party is Solvent after giving effect to the funding of the Loans contemplated by this Agreement, the application of the proceeds thereof in accordance with Section 7.9 and the payment of all estimated legal, accounting and other fees and expenses related hereto.
 
(l)     Cash Management .  The Administrative Agent shall be satisfied that the Borrower shall have established a cash management system consistent with Section 7.11 .
 
(m)     No Material Adverse Effect .  Since March 31, 2011, there shall not have occurred or become known to the Administrative Agent any event, development or circumstance that has caused or could reasonably be expected to cause a Material Adverse Effect.
 
(n)     Digital Systems Report .  The Borrower shall have delivered to the Administrative Agent and the Bookrunners a Digital Systems Report, accurate as of the Effective Date.
 
(o)     Pledge of Borrower's rights under CDF2 Loan Documents .  On or prior to the Effective Date, (i) all of Borrower's rights in and to the CDF2 Non-Recourse Loans and the CDF2 Loan Documents, including all collateral therefor (including the CHG Lease Facility Documents), shall have been assigned as Collateral and all payments under the CHG Lease Facility Documents shall have been irrevocably assigned to the Borrower for payment of the CDF2 Non-Recourse Loans (and to the Collateral Agent for the benefit of the Secured Parties), in each case, pursuant to documentation in form and substance satisfactory to the Administrative Agent and each Lender and (ii) the Administrative Agent shall be satisfied that (A) all filings (including UCC financing statements) necessary to provide the Borrower with a perfected security interest in the collateral securing the CDF2 Non-Recourse Loans (including CHG's rights and interests in the CHG Lease Facility Documents) have been made and (B) it and the Lenders are either addressees of, or specifically authorized to rely on, all opinions of counsel delivered in connection with the CDF2 Loan Documents and the CHG Lease Facility Documents, which opinions shall be in form and substance acceptable to the Administrative Agent.
 
(p)     Copies and Consummation of Sale and Contribution Agreement .  The Administrative Agent shall have received fully executed copies of the Sale and Contribution Agreement and all documents executed in connection therewith (including all documents providing for the assignment by Parent Holdings to Holdings and the sale or contribution by
 

Schedule 3.1
 
 

 

Holdings to the Borrower of all rights and agreements relating to the Digital Systems to which Parent Holdings and/or Holdings is a party and all other agreements that are purported to be conveyed to the Borrower pursuant to the Sale and Contribution Agreement) and such documents shall not have been altered, amended or otherwise modified or supplemented without the prior written consent of the Administrative Agent.  The Administrative Agent shall have received written evidence satisfactory to it and its counsel that substantially concurrently with the Effective Date the transactions contemplated by the Sale and Contribution Agreement shall have been consummated in accordance with terms thereof.
 
(q)     Assignment of Digital Cinema Deployment Agreements   The Administrative Agent shall have received evidence reasonably satisfactory to it that all Digital Cinema Deployment Agreements shall have been assigned to Holdings in so far as each relates to Installed Digital Systems, in each case, pursuant to documents in form and substance acceptable to the Administrative Agent.
 
(r)     IP Escrow; Licenses .  The Administrative Agent and the Lenders shall be satisfied that the escrow arrangements contemplated in Section 6 of the Management Services Agreement with respect to Intellectual Property necessary to properly support the Digital Systems and otherwise perform the Services (as defined therein) shall have been consummated.  The Collateral Agent shall have received license agreements, in form and substance acceptable to the Administrative Agent, with respect to the software subject to such escrow.  The Administrative Agent shall have received a duly executed copy of the IP Escrow Agreement, the IP Licenses and officer's certificates and board resolutions from each of Hollywood Software and Access Digital Media, Inc., each in form and substance satisfactory to the Administrative Agent.
 
(s)     Fees and Expenses .  There shall have been paid in full in cash to the Administrative Agent, for the account of the applicable Person, all fees and all reimbursements of costs or expenses, in each case due and payable under any Loan Document on or before the Effective Date and invoiced prior to the Effective Date, except to the extent arrangements satisfactory to the parties entitled to payment thereof shall have been made for payment or reimbursement of any costs or expenses permitted to be made after the Effective Date.
 
(t)     New Information and Additional Matters .  There shall not have occurred or become known to the Administrative Agent since March 31, 2011 any information or other matter affecting any Loan Party or any of its Affiliates or the transactions contemplated by the Loan Documents that, in the Administrative Agent's judgment, is inconsistent in a material and adverse manner with any such information or other matter disclosed to the Administrative Agent prior to such date.  The Administrative Agent shall have received such additional documents and information as any Lender, through the Administrative Agent, may reasonably request.
 

Schedule 3.1
 
 

 

SCHEDULE 3.2
 
 
Conditions Precedent to Loans
and Release of Funds in the DDTL Escrow Account

(a)     Notice of Borrowing .  The Administrative Agent shall have received a written, timely and duly executed and completed Notice of Borrowing.
 
(b)     Representations; No Default Certificate .  The Administrative Agent shall have received a certificate of the President, Chief Executive Officer or Chief Financial Officer of the Borrower certifying that as of the Funding Date and before and after giving effect to the proposed Borrowing: (A) the representations and warranties of the Loan Parties set forth in any Loan Document shall be true and correct on and as of such date, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties were true and correct as of such specified earlier date, (B) no Default has occurred and is continuing and (C) all conditions precedent to such proposed Borrowing (including availability restrictions) have been satisfied or will be satisfied substantially concurrent with the funding of the proposed Borrowing.
 
(c)     Receipt of Pro Forma Financial Statements, Business Plan and Budget .  The Lenders shall have received and be satisfied with the Initial Financial Statements described in clause (b) and, if applicable, (c) of the definition thereof.
 
(d)     Required Exhibitor Contributions .  The Administrative Agent shall have received evidence satisfactory to it that Holdings shall have received all Required Exhibitor Contributions due and payable by the Exhibitors under the Exhibitor Agreements with respect to Installed Digital Systems previously financed and to be financed with the proceeds of such Borrowing.  With respect to Previously Deployed Systems that will create a credit against any Required Exhibitor Contributions, the Administrative Agent shall have received all lien searches, lien releases, bills of sale, payoff letters and other documentation required by it to confirm that the transfer of such Previously Deployed Systems has been made by the applicable Exhibitor to Holdings free and clear of all Liens and not subject to any Indebtedness.
 
(e)     Required Vendor Mezzanine Loans .  The Administrative Agent shall have received evidence satisfactory to it that Holdings shall have received all Required Vendor Mezzanine Loans owing from the Approved Vendors with respect to Installed Digital Systems (other than Previously Deployed Systems) previously financed and to be financed with the proceeds of such Borrowing.
 
(f)     CHG Lease Facility .
 
(i)     All sale and leaseback agreements and schedules (and updates to schedules) delivered under the CHG Lease Agreement with respect to the Installed Digital Systems to be financed with the proceeds of such Borrowing shall be on terms and conditions satisfactory to the Administrative Agent in its sole discretion.
 

Schedule 3.2
 
 

 

(ii)     The Administrative Agent shall be satisfied that (i) all CHG Lease Advances shall have been, or shall simultaneously with the Borrowing to be made on such Funding Date be, made to Holdings under the CHG Lease Facility such that after giving effect to such proposed Borrowing, the conditions precedent set forth in clause (l) below have been satisfied and (ii) the CHG Sale Leaseback and the CHG Lease Facility Documents shall be in full force and effect and the Administrative Agent shall have a perfected first priority Lien in and to the Borrower's rights therein, including assignments of proceeds acknowledged by each lessee or paying party for any lessee.
 
(g)     Installation Management Fee .  The Administrative Agent shall be satisfied that at least $1,000 per screen of the Installation Management Fee for each Installed Digital System has been paid to Cinedigm by Holdings in the form of subordinated debt pursuant to documentation in form and substantive satisfactory to the Administrative Agent.
 
(h)     Liquidity .  The Approved Vendors shall have agreed to extended payment terms, and/or Cinedigm shall have agreed to a deferral of payment of the Installation Management Fee, as is necessary to create sufficient liquidity at the Borrower (as determined by the Administrative Agent) and such agreements shall be in effect.
 
(i)     Debt Service Reserve .  The Administrative Agent shall be satisfied that (i) the Debt Service Reserve shall be fully funded or (ii) the Borrower shall simultaneously fund (with a portion of the proceeds from the Borrowing or from such other amounts available to the Borrower) the Debt Service Reserve Account so that the Debt Service Reserve is fully funded, in each case, after giving effect to the proposed Borrowing.
 
(j)     Material Contracts .  The Administrative Agent shall be satisfied, in its sole discretion and after giving effect to any amendments and modifications deemed necessary by the Administrative Agent in its sole discretion, (i) with the terms and conditions of the Borrower's and Holdings' material contracts entered into after the Effective Date including all Exhibitor Agreements, Service Agreements and Digital Cinema Deployment Agreements entered into after the Effective Date, and (ii) that all applicable rights of Holdings under its material contracts have been assigned to the Borrower on terms and conditions and pursuant to documentation acceptable to Administrative Agent.
 
(k)     Updated Digital Systems Report .  The Borrower shall have delivered to the Administrative Agent a Digital Systems Report, updated as of such Funding Date.
 
(l)     Maximum Term Loan Amount Per Screen .  The Administrative Agent shall have received evidence satisfactory to it demonstrating that, after giving effect to the proposed Borrowing:
 
(i)     the quotient of (a) the aggregate principal amount of all Term Loans outstanding as of such Funding Date, divided by (b) the total number of screens being serviced by Installed Digital Systems as of such Funding Date does not exceed the lesser of (x) the product of (i) 65% and (ii) the aggregate Fully Installed Purchase Price of Installed Digital Systems paid or payable by Holdings as of such Funding Date and (y) $42,500;
 

Schedule 3.2
 
 

 

(ii)     with respect to the aggregate principal amount of all Term Loans included in such Borrowing that the Borrower has indicated in the related Systems Financing Notice will be applied to the Fully Installed Purchase Price of Installed Digital Systems that are not Specified Systems or Previously Deployed Systems, the quotient of (a) the aggregate principal amount of such Term Loans, divided by (b) the total number of screens being serviced by such Installed Digital Systems does not exceed $42,500;
 
(iii)     with respect to the aggregate principal amount of all Term Loans included in such Borrowing that the Borrower has indicated in the related Systems Financing Notice will be applied to the Fully Installed Purchase Price of Installed Digital Systems (i) that are not Specified Systems and (ii) that are Previously Deployed Systems, the quotient of (a) the aggregate principal amount of such Term Loans, divided by (b) the total number of screens being serviced by such Previously Deployed Systems does not exceed the least of (x) the product of (i) 65% and (ii) the aggregate Fully Installed Purchase Price of such Previously Deployed Systems, (y) the aggregate Fully Installed Purchase Price of such Previously Deployed Systems less the aggregate Required Exhibitor Contributions required to be made by all Approved Exhibitors in connection with such Previously Deployed Systems (not taking into account any credits associated with such Previously Deployed Systems), and (z) $42,500;
 
(iv)     with respect to the aggregate principal amount of all Term Loans included in such Borrowing that the Borrower has indicated in the related Systems Financing Notice will be applied to the Fully Installed Purchase Price of Installed Digital Systems (i) that will be delivered to a particular Approved Exhibitor identified in such Systems Financing Notice, (ii) that are Specified Systems and (iii) that are not Previously Deployed Systems, the quotient of (a) the aggregate principal amount of such Term Loans, divided by (b) the total number of screens being serviced by such Specified Systems does not exceed that amount set forth in the Exhibitor Agreement applicable to such Specified Systems; and
 
(v)     with respect to the aggregate principal amount of all Term Loans included in such Borrowing that the Borrower has indicated in the related Systems Financing Notice will be applied to the Fully Installed Purchase Price of Installed Digital Systems (i) that will be delivered to a particular Approved Exhibitor identified in such Systems Financing Notice, (ii) that are Specified Systems and (iii) that are Previously Deployed Systems, the quotient of (a) the aggregate principal amount of such Term Loans, divided by (b) the total number of screens being serviced by such Installed Digital Systems does not exceed the least of (x) the product of (i) 65% and (ii) the aggregate Fully Installed Purchase Price of such Installed Digital Systems, (y) the aggregate Fully Installed Purchase Price of such Installed Digital Systems less the aggregate Required Exhibitor Contributions required to be made by such Exhibitor in connection with such Installed Digital Systems (not taking into account any credits associated with such Exhibitor's Previously Deployed Systems), and (z) that amount set forth in the Exhibitor Agreement applicable to such Installed Digital Systems.
 
(m)     Maximum CHG Lease Advances Per Screen .  The Administrative Agent shall have received evidence satisfactory to it demonstrating that, after giving effect to the CHG Lease Advance corresponding to the proposed Borrowing, (i) in the case of Designated Installed Digital
 

Schedule 3.2
 
 

 

Systems, the quotient of (a) the aggregate amount of CHG Lease Advances outstanding as of such Funding Date, to the extent applied to the Fully Installed Purchase Price of Installed Digital Systems installed at Designated Cineplexes, divided by (b) the total number of screens being serviced by Designated Installed Digital Systems as of such Funding Date, does not exceed (x) prior to October 1, 2011, $58,500 and (y) on and after October 1, 2011, $57,882, and (ii) in the case of any other Installed Digital Systems, the quotient of (a) the aggregate amount of CHG Lease Advances outstanding as of such Funding Date, other than CHG Lease Advances described in clause (i)(a) above, divided by (b) the total number of screens being serviced by such Installed Digital Systems as of such Funding Date, does not exceed (x) prior to October 1, 2011, $53,500 and (y) on and after October 1, 2011, $52,882.
 
(n)     Minimum Installed Digital Systems .  The Administrative Agent shall have received evidence satisfactory to it demonstrating that the Loan Parties shall have installed not less than 600 Installed Digital Systems as of such Funding Date, at least 500 of which have been supplied by Approved Vendors.
 
(o)     Fees and Expenses .  All fees due and payable with respect to such Borrowing and all reimbursements of costs or expenses, in each case, due and payable under any Loan Document as of such Funding Date and invoiced prior to such Funding Date shall have been paid in full in cash to the Administrative Agent for the account of the applicable Person (or shall be paid to the Administrative Agent substantially concurrent with the funding of such Borrowing (including out of the proceeds of any Revolving Loans made or to be made on such Funding Date)) except to the extent, in the case of such costs or expenses owing as of the Initial Funding Date, arrangements satisfactory to the parties entitled to payment thereof shall have been made for payment or reimbursement of any such costs or expenses permitted to be made after the Effective Date.
 
(p)     CDF2 Non-Recourse Loan Collateral .  On or prior to the Funding Date, the Collateral Agent shall be satisfied that all of Borrower's rights in and to the CDF2 Non-Recourse Loans, the CDF2 Loan Agreement and the other CDF2 Loan Documents, including all collateral therefor (including all Digital Systems, the master lease, all lease schedules, the purchase and sale agreement and other CHG Lease Facility Documents), shall have been assigned as Collateral and all payments under the CHG Lease Facility Documents shall have been irrevocably assigned to the Borrower for payment of the CDF2 Non-Recourse Loans (and to the Collateral Agent for the benefit of the Secured Parties), in each case, pursuant to documentation in form and substance satisfactory to the Collateral Agent, and (ii) the Collateral Agent shall be satisfied that all filings (including UCC financing statements) necessary to provide the Borrower with a perfected security interest in the collateral securing the CDF2 Non-Recourse Loans (including all of CHG's rights and interests in the CHG Lease Facility Documents) have been made.
 
(q)     Certificates of Acceptance .  The Borrower shall deliver to the Administrative Agent a Certificate of Acceptance from each exhibitor party to an Exhibitor Agreement certifying as to the receipt, installation and operation of the Installed Digital Systems to be financed with the proceeds of such Borrowing or confirmation from the applicable supplier, in a form reasonably acceptable to the Administrative Agent, that such Installed Digital Systems have been installed and are in good working condition.
 

Schedule 3.2
 
 

 

(r)     Use of Proceeds .  The Administrative Agent shall be satisfied that the proceeds of such Borrowing shall be used in accordance with Section 7.9 and, in the case of a release of funds from the DDTL Escrow Account, shall have received documentation acceptable to it evidencing commencement of deployment of the applicable Installed Digital System prior to the DDTL Termination Date.
 
(s)     New Build Cineplexes .  The Administrative Agent shall have received evidence satisfactory to it that not more than 5% of Digital Systems deployed under the Phase 2 Rollout are deployed at New Build Cineplexes.
 
(t)     Second Run Complexes .  The Administrative Agent shall have received evidence satisfactory to it that not more than 5% of Digital Systems deployed under the Phase 2 Rollout are deployed at Second-Run Complexes.
 
(u)    Release of Certain Purchase Money Liens .  With respect to the Loans made on the Initial Funding Date, the Administrative Agent shall have received on or prior to such Initial Funding Date all lien releases, bills of sale, payoff and/or termination letters and other documentation required by it to confirm that the purchase money Liens and other security arrangements in favor of Ballantyne Strong, Inc. with respect to the Digital Systems purchased from Ballantyne Strong, Inc. prior to the Initial Funding Date will be released prior to or concurrently with the funding of such Loans.
 
(v)     Miscellaneous .  The Administrative Agent shall have received such other approvals, opinions, or documents reasonably deemed necessary or desirable by the Administrative Agent as a result of circumstances occurring after the date of this Agreement.
 

Schedule 3.2
 
 

 

SCHEDULE 3.3
 
 
Conditions Precedent to DDTL Termination Date Funding

(a)     Notice of Borrowing .  The Administrative Agent shall have received a written, timely and duly executed and completed Notice of DDTL Termination Date Funding.
 
(b)     Representations; No Default Certificate .  The Administrative Agent shall have received a certificate of the President, Chief Executive Officer or Chief Financial Officer of the Borrower certifying that as of the DDTL Termination Date and before and after giving effect to the proposed DDTL Termination Date Funding: (A) the representations and warranties of the Loan Parties set forth in any Loan Document shall be true and correct on and as of such date, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties were true and correct as of such specified earlier date, (B) no Default has occurred and is continuing and (C) all conditions precedent to such proposed DDTL Termination Date Funding (including availability restrictions) have been satisfied or will be satisfied substantially concurrently with the proposed DDTL Termination Date Funding.
 
(c)     Material Contracts .  The Administrative Agent shall be satisfied, in its sole discretion and after giving effect to any amendments and modifications deemed necessary by the Administrative Agent in its sole discretion, (i) with the terms and conditions of the Borrower's and Holdings' material contracts entered into after the Effective Date including all Exhibitor Agreements, Service Agreements and Digital Cinema Deployment Agreements entered into after the Effective Date, and (ii) that all applicable rights of Holdings under its material contracts have been assigned to the Borrower on terms and conditions and pursuant to documentation acceptable to Administrative Agent.
 
(d)     Updated Digital Systems Report .  The Borrower shall have delivered to the Administrative Agent a Digital Systems Report, updated as of the DDTL Termination Date.
 
(e)     Fees and Expenses .  All fees due and payable with respect to such DDTL Termination Date Funding and all reimbursements of invoiced costs or expenses, in each case, due and payable under any Loan Document as of the DDTL Termination Date and invoiced prior to such DDTL Termination Date shall have been paid in full in cash to the Administrative Agent for the account of the applicable Person (or shall be paid to the Administrative Agent substantially concurrently with the DDTL Termination Date (including out of the proceeds of any Revolving Loans made or to be made on the DDTL Termination Date)).
 
(f)     CDF2 Non-Recourse Loan Collateral .  On or prior to the DDTL Termination Date, the Collateral Agent shall be satisfied that all of Borrower's rights in and to the CDF2 Non-Recourse Loans, the CDF2 Loan Agreement and the other CDF2 Loan Documents, including all collateral therefor (including all Digital Systems, the master lease, all lease schedules, the purchase and sale agreement and other CHG Lease Facility Documents), shall have been assigned as Collateral and all payments under the CHG Lease Facility Documents shall have been irrevocably assigned to the Borrower for payment of the CDF2 Non-Recourse Loans (and to the Collateral Agent for the benefit of the Secured Parties), in each case, pursuant to
 

Schedule 3.3
 
 

 

documentation in form and substance satisfactory to the Collateral Agent, and (ii) the Collateral Agent shall be satisfied that all filings (including UCC financing statements) necessary to provide the Borrower with a perfected security interest in the collateral securing the CDF2 Non-Recourse Loans (including all of CHG's rights and interests in the CHG Lease Facility Documents) have been made.
 
(g)     Miscellaneous .  The Administrative Agent shall have received such other approvals, opinions, or documents reasonably deemed necessary or desirable by the Administrative Agent as a result of circumstances occurring after the date of this Agreement.
 

Schedule 3.3
 
 

 

SCHEDULE 4.2

GOVERNMENTAL PERMITS


None



Schedule 4.2
 
 
 
 

 

SCHEDULE 4.3

OWNERSHIP OF EACH LOAN PARTY AND SUBSIDIARIES OF GROUP MEMBERS


1.     Access Digital Cinema Phase 2, Corp., (“Parent Holdings”) is a Delaware corporation authorized to issue one thousand shares of common stock. Parent Holding is wholly-owned by Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.).
 
2.     CDF2 Holdings, LLC, (“Holdings”) is a Delaware limited liability company. Parent Holdings is the sole member of Holdings.
 
3.     Cinedigm Digital Funding 2, LLC, (“Borrower”) is a Delaware limited liability company. Holdings is the sole member of Borrower.  Borrower has no subsidiaries.
 

 

Schedule 4.3
 
 
 
 

 

SCHEDULE 4.8

TAX AFFILIATE


None
 
 

 

Schedule 4.8
 
 
 
 

 

SCHEDULE 4.13

ERISA

None





Schedule 4.13
 
 
 
 

 

SCHEDULE 4.14

ENVIRONMENTAL MATTERS

None




Schedule 4.14
 
 
 
 

 

SCHEDULE 4.16

REAL PROPERTY

None
 
 

 
Schedule 4.16
 
 
 
 

 

SCHEDULE 4.19

AGREEMENTS AND OTHER DOCUMENTS


Exhibitor Agreements

1.     Master License Agreement dated as of August 10, 2011, between CDF2 Holdings, LLC and Storyteller Theatres Corporation.
 
2.     Master License Agreement dated as of July 5, 2011, between CDF2 Holdings, LLC and Marcus Theatres Corporation.
 
3.     Master License Agreement dated as of August 17, 2011, between CDF2 Holdings, LLC and Dickinson Theatres, Inc., as amended and restated by Amended and Restated Master License Agreement between CDF2 Holdings, LLC and Dickinson Theatres, Inc. dated as of September 28, 2011.
 
4.     Master License Agreement dated as of July 11, 2011, between CDF2 Holdings, LLC and Meadville Cinema LP.
 
5.     Master License Agreement dated as of October 7, 2011, between CDF2 Holdings, LLC and Muller Family Theatres, LLC.
 
Supply Agreement

The Digital System Supply Agreement, dated as of August 16, 2011, between CDF2 Holdings, LLC and Ballantyne Strong, Inc., as amended by Amendment to Digital System Supply Agreement, dated as of October 14, 2011.
 
Service Agreement

Basic Service Agreement dated as of September 26, 2011, between Marcus Theatres Corporation and Strong Technical Services, Inc.

Digital Cinema Deployment Agreements

1.     Digital Cinema Deployment Agreement, dated as of March 7, 2008, by and among Twentieth Century Fox Film Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Deployment Agreement dated February 25, 2009, as further amended by Amendment No. 2 to Digital Cinema Deployment Agreement dated June 17, 2010.
 
2.     Digital Cinema Deployment Agreement, dated as of March 10, 2008, by and between Paramount Pictures Corporation and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Deployment Agreement dated July 8, 2010.
 
 
 

Schedule 4.19
 
 
 
 

 

3.     Digital Cinema Deployment Agreement, dated as of February 16, 2009, by and among Columbia Pictures Industries, Inc., Sony Pictures Releasing Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp., as amended and restated by First Amended and Restated Digital Cinema Deployment Agreement dated as of July 28, 2011, by and among Columbia Pictures Industries, Inc., Sony Pictures Releasing Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp.
 
4.     Digital Cinema Deployment Agreement, dated as of October 23, 2009, by and between Warner Bros. Entertainment Inc. and Access Digital Cinema Phase 2, Corp.
 
5.     Digital Cinema Screen Management Agreement, dated as of March 10, 2008, by and between Universal Film Exchanges LLLP and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Screen Management Agreement dated February 12, 2009, and as further amended by Amendment No. 2 to Digital Cinema Screen Management Agreement dated August 30, 2010, and as further amended by Amendment No. 3 to Digital Cinema Screen Management Agreement dated April 15, 2011.
 
6.     Digital Cinema Domestic Deployment Agreement, dated as of March 10, 2008, among Walt Disney Studios Motion Pictures, Access Digital Cinema Phase 2, Corp. and Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.), as amended by Amendment  No. 1 to Digital Cinema Domestic Deployment Agreement dated as of January 30, 2009, as further amended by Amendment  No. 2 to Digital Cinema Domestic Deployment Agreement dated as of May 21, 2010, as further amended by Amendment No. 3 to Digital Cinema Domestic Deployment Agreement dated as of September 14, 2010.
 
7.     Digital Cinema Deployment Agreement, dated as of October 13, 2008, by and between Lion’s Gate Films Inc. and Access Digital Cinema Phase 2, Corp.
 
8.     Digital Cinema Deployment Agreement, dated as of October 23, 2009, by and between Overture Films, LLC and Access Digital Cinema Phase 2, Corp.
 
Management Services Agreement

Management Services Agreement, dated  October 18, 2011, by and among Cinedigm Digital Cinema Corp., Cinedigm Digital Funding 2, LLC and CDF2 Holdings, LLC.
 
CDF2 Loan Documents

1.     Non-Recourse Loan Agreement dated as of October 18, 2011, between Cinedigm Digital Funding 2, LLC, as Lender and CHG-MERIDIAN U.S. Finance, LTD.
 
2.     The Security Agreement, dated as of October 18, between Cinedigm Digital Funding 2, LLC and CHG-MERIDIAN U.S. Finance, Ltd.
 
3.     The Multiparty Agreement dated as of October 18, 2011, by and among Cinedigm Digital Funding 2, LLC, Access Digital Cinema Phase 2, Corp., CDF2 Holdings, LLC, Cinedigm Digital
 
 

Schedule 4.19
 
 
 
 

 

Cinema Corp., CHG-MERIDIAN U.S. Finance, Ltd., Societe Generale, New York Branch and Ballantyne Strong, Inc.
 
CHG Lease Facility Documents

1.     Master Equipment Lease No. 8463, dated as of October 18, 2011 between CDF2 Holdings, LLC and CHG-MERIDIAN U.S. Finance, Ltd., and the Equipment Lease Schedule, dated as of October 18, 2011 related thereto.
 
2.     Master Equipment Lease No. 8465, dated as of October 18, 2011 between CDF2 Holdings, LLC and CHG-MERIDIAN U.S. Finance, Ltd., and the Equipment Lease Schedule, dated as of October 18, 2011, related thereto.
 
3.     Sale and Leaseback Agreement dated as of October 18, 2011, by and between CDF2 Holdings, LLC and CHG-MERIDIAN U.S. Finance, Ltd.
 
4.     The Supplemental Terms Rider, dated as of October 18, 2011, between CDF2 Holdings, LLC and CHG-MERIDIAN U.S. Finance, Ltd.
 
5.     The Security Agreement, dated as of October 18, 2011, between CDF2 Holdings, LLC and CHG-MERIDIAN U.S. Finance, Ltd.
 
6.     The CHG-MERIDIAN U.S. Finance, Ltd. Commitment Letter to Cinedigm Digital Cinema Corp. and Access Digital Cinema Phase 2, Corp. dated as of June 17, 2011, as amended by letter agreement dated as of September 9, 2011, as further amended by letter dated September 29, 2011, and as further amended by letter dated October 3, 2011.
 
7.     The Multiparty Agreement dated as of  October 18, 2011, by and among Cinedigm Digital Funding 2, LLC, Access Digital Cinema Phase 2, Corp., CDF2 Holdings, LLC, Cinedigm Digital Cinema Corp., CHG-MERIDIAN U.S. Finance, Ltd., Societe Generale, New York Branch and Ballantyne Strong, Inc.
 
Material Licenses and Permits

1.     Software License Agreement dated as of October 18, 2011, among Access Digital Media, Inc., Cinedigm Digital Funding 2, LLC, and CDF2 Holdings, LLC.
 
2.     Software License Agreement dated as of  October 18, 2011, by and between Hollywood  Software, Inc., Cinedigm Digital Funding 2, LLC, and CDF2 Holdings, LLC.
 
Sale and Contribution Agreement

Sale and Contribution Agreement, dated as of October 18, 2011, between Access Digital Cinema Phase 2, Corp., Cinedigm Digital Funding 2, LLC and CDF2 Holdings, LLC.
 
Miscellaneous
 

 

Schedule 4.19
 
 
 
 

 

Custom Master Beneficiary Escrow Service Agreement dated effective as of  October 18, 2011, among Societe Generale, New York Branch, as Collateral Agent for the Lenders and Societe Generale, New York Branch, as collateral agent for CHG-MERIDIAN U.S. Finance, Ltd and the other lease parties, as beneficiaries, Access Digital Media, Inc., and Hollywood Software, Inc., as depositors, and Iron Mountain Intellectual Property Management, Inc.
 
Instruments/documents evidencing Indebtedness of Loan Parties and Liens granted with respect thereto (other than those listed above)
 
1.     SG Advisory Fee Note dated as of October 18, 2011, executed by Cinedigm Digital Funding 2, LLC in favor of Societe Generale, New York Branch.
 
2.     Cinedigm Installation Note dated as of October 18, 2011, executed by CDF2 Holdings, LLC in favor of Cinedigm Digital Cinema Corp.
 
3.     Vendor Note dated as of October 18, 2011, executed by CDF2 Holdings, LLC in favor of Cinedigm Ballantyne Strong, Inc.
 
4.     Delayed Draw Term Loan Note dated as of  October 18, 2011, executed by Cinedigm Digital Funding 2, LLC in favor of TD Bank, N.A.
 
Instruments/documents evidencing issuance of any equity securities, warrants, rights or options to purchase equity securities (other than those listed above)
 
None.
 
 

Schedule 4.19
 
 
 
 

 

SCHEDULE 4.20

DCI SPEC COMPLIANCE

N/A




Schedule 4.20
 
 
 
 

 

SCHEDULE 4.21

DISTRIBUTORS- MATERIAL DIGITAL CINEMA DEPLOYMENT AGREEMENTS

 

1.     Twentieth Century Fox Film Corporation
 
2.     Paramount Pictures Corporation
 
3.     Sony Pictures Releasing Corporation and Columbia Pictures Industries, Inc.
 
4.     Warner Bros. Entertainment Inc.
 
5.     Universal Film Exchanges LLC, successor-in-interest to Universal Film Exchanges LLLP
 
6.     Walt Disney Studios Motion Pictures
 
7.     Lion’s Gate Films Inc.
 

 

Schedule 4.21
 
 

 

SCHEDULE 7.5

INSURANCE
 
(a)     Coverage .  Each Group Member shall (and shall cause Holdings to), during the term of this Agreement, carry and maintain at least the minimum insurance coverage set forth in this Schedule 7.5 .  All insurance carried pursuant to this Schedule 7.5 shall be placed with such insurers having a minimum A.M. Best rating of A:X (or as may otherwise be agreed by the Collateral Agent) and be in such form, with terms, conditions, limits and deductibles as shall be acceptable to the Collateral Agent:
 
(i)     All Risk Property Insurance .  Each Group Member shall (and shall cause Holdings to) maintain all risk property insurance covering against physical loss or damage to its assets (which for purposes of this clause (a)(i) shall not include any equipment subject to an Exhibitor Agreement, provided , that the applicable exhibitor has insured such equipment in accordance with the terms of the Exhibitor Agreement), including but not limited to fire and extended coverage, collapse, flood, earth movement and comprehensive boiler and machinery coverage (including electrical malfunction and mechanical breakdown).  Coverage shall be written on a replacement cost basis, with an agreed amount endorsement waiving any coinsurance penalty and include coverage for expediting expenses; and
 
(ii)     Business Interruption Insurance .  Each Group Member shall (and shall cause Holdings to) maintain business interruption insurance subject to an annual policy in an amount equal to the projected net profits and continuing expenses (including the debt payments hereunder) for the following 12-month period. Such insurance shall also cover service interruption and extra expenses and shall contain an agreed amount endorsement waiving any coinsurance penalty; and
 
(iii)     Comprehensive General Liability Insurance .  Each Group Member shall (and shall cause Holdings to) maintain comprehensive general liability insurance written on an occurrence basis with a limit of not less than $1,000,000.  Such coverage shall include, but not be limited to, premises/operations, broad form contractual liability, independent contractors, products/completed operations, property damage and personal injury liability; and
 
(iv)     Excess/Umbrella Liability .  Each Group Member shall (and shall cause Holdings to) maintain excess or umbrella liability insurance written on an occurrence basis in an amount not less than $15,000,000 providing coverage limits excess of the insurance limits required under clause (a)(iii) .  Such insurance shall follow the form of the primary insurances and drop down in case of exhaustion of underlying limits and/or aggregates.
 
(b)     Endorsements .  Each Group Member shall (and shall cause Holdings to) use its commercially reasonable efforts to cause all insurance policies carried and maintained in accordance with this Schedule 7.5 to be endorsed as follows:
 


Schedule 7.5
 
 

 

(i)     The Collateral Agent (on behalf of itself and the other Secured Parties) and CHG (on behalf of itself and the other Junior Creditors (as defined in the Multiparty Agreement)) shall be additional insured and loss payee with respect to the property policies described in clauses (a)(i) and (a)(ii) .  The Collateral Agent (on behalf of itself and the other Secured Parties) and CHG (on behalf of itself and the other Junior Creditors (as defined in the Multiparty Agreement)) shall be additional insured with respect to liability policies described in clauses (a)(iii) and (a)(iv) .  It shall be understood that any obligation imposed upon Holdings or any Group Member, including but not limited to the obligation to pay premiums, shall be the sole obligation of Holdings or such Group Member and not that of the Collateral Agent, any Lender or CHG; and
 
(ii)     With respect to property policies described in clauses (a)(i) and (a)(ii) , the interests of the Collateral Agent and CHG shall not be invalidated by any action or inaction of Holdings or any Group Member or any other person, and shall insure the Collateral Agent and CHG regardless of any breach or violation by Holdings or any Group Member or any other person, of any warranties, declarations or conditions of such policies; and
 
(iii)     Inasmuch as the liability policies are written to cover more than one insured, all terms conditions, insuring agreements and endorsements, with the exception of the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured; and
 
(iv)     The insurers thereunder shall waive all rights of subrogation against the Collateral Agent and CHG, any right of setoff or counterclaim, and any other right to deduction, whether by attachment or otherwise; and
 
(v)    If such insurance is canceled by Holdings or any Group Member for any reason whatsoever, including nonpayment of premium, or any changes are initiated by Holdings or any Group Member or the carrier which affect the interests of the Collateral Agent or CHG, such cancellation or change shall not be effective as to the Collateral Agent or CHG until 30 days (10 days in the case of non-payment of premium) after receipt by the Collateral Agent and CHG of written notice sent by registered mail from such insurer.
 


Schedule 7.5
 
 

 

SCHEDULE 8.1

EXISTING INDEBTEDNESS

None







Schedule 8.1
 
 
 
 

 

SCHEDULE 8.2

EXISTING LIENS

None










Schedule 8.2
 
 
 
 

 

SCHEDULE 8.3

EXISTING INVESTMENTS

None




Schedule 8.3
 
 
 
 

 

SCHEDULE 9.1(i)

MATERIAL DISTRIBUTORS


8.     Sony Pictures Releasing Corporation
 
9.     Columbia Pictures Industries, Inc.
 
10.     Warner Bros. Entertainment Inc.
 
11.     Walt Disney Studios Motion Pictures
 
12.     Paramount Pictures Corporation
 
13.     Universal Film Exchanges LLC, successor-in-interest to Universal Film Exchanges LLLP
 
14.     Twentieth Century Fox Film Corporation
 
15.     Lion’s Gate Films Inc.
 

Schedule 9.1(i)
 
 
 
 

 

SCHEDULE 9.1(l)
 

INTERCOMPANY AGREEMENTS

16.     Management Services Agreement, dated as of October 18, 2011, by and among Cinedigm Digital Funding 2, LLC, CDF2 Holdings, LLC and Cinedigm Digital Cinema Corp.
 
17.     Sale and Contribution Agreement, dated as of October 18, 2011, by and among Access Digital Cinema Phase 2, Corp., Cinedigm Digital Funding 2, LLC and CDF2 Holdings, LLC.
 
18.     Software License Agreement dated as of October 18, 2011, by and among Access Digital Media, Inc., Cinedigm Digital Funding 2, LLC, and CDF2 Holdings, LLC.
 
19.     Software License Agreement dated as of  October 18,  2011, by and among Hollywood  Software, Inc., Cinedigm Digital Funding 2, LLC and CDF2 Holdings, LLC.
 
20.     Assignment and Assumption Agreement, dated as of October 18, 2011, among Cinedigm Digital Cinema Corp., Access Digital Cinema Phase 2, Corp. and CDF2 Holdings, LLC.
 
21.     Assignment and Assumption Agreement, dated as of October 18, 2011, between CDF2 Holdings, LLC, and Cinedigm Digital Funding 2, LLC.
 
 

 
Schedule 9.1(1)
 
 

 

FINAL VERSION
 
EXHIBIT A
TO
CREDIT AGREEMENT
 
FORM OF ASSIGNMENT
 
This Assignment and Assumption (the “ Assignment and Assumption ”) is dated as of the Effective Date set forth below and is entered into by and between [the][each] Assignor identified in item 1 below ([the][each, an] “ Assignor ”) and [the][each] Assignee identified in item 2 below ([the][each, an] “ Assignee ”).  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] hereunder are several and not joint.]  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “ Credit Agreement ”), receipt of a copy of which is hereby acknowledged by [the][each] Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
 
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including without limitation any guarantees included in such facilities), and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “ Assigned Interest ”).  Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.
 
1.
Assignor[s]:
   
       
       
 
Assignor [is] [is not] a Defaulting Lender
       
 

Exhibit A to Credit Agreement
-1-
 
 

 
 
 
2.
Assignee[s]:
   
       
       
 
[for each Assignee, indicate [Affiliate][Approved Fund] of [ identify Lender ]]
       
3.
Borrower:
Cinedigm Digital Funding 2, LLC, a Delaware limited liability Company
       
4.
Administrative Agent:
Société Générale, New York Branch, as the administrative agent under the Credit Agreement
       
5.
Credit Agreement:
The $[ ] Credit Agreement dated as of [ ], 2011 among the Borrower, the Lenders party thereto, Société Générale, New York Branch, as administrative agent and collateral agent, and the other agents parties thereto
       
6.
Assigned Interest[s]:
   
 
 
Assignor[s] 1
 
Assignee[s] 2
 
Facility Assigned 3
 
Aggregate Amount of Commitment/Loans for all Lenders 4
 
Amount of Commitment/Loans Assigned 8
 
Percentage Assigned of Commitment/
Loans 5
 
CUSIP Number
 
     
   $
 
   $
 
%     
 
 
     
   $
 
   $
 
%     
 
 
     
   $
 
   $
 
%     
 
 

[7..
Trade Date:
  ] 6

Effective Date:   _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
 
 
[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]
 


 
1 List each Assignor, as appropriate.
 
2 List each Assignee, as appropriate.
 
3 Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., “Revolving Loan Commitment,” “Initial Advance Term Loan Commitment,” “Delayed Draw Term Loan Commitment”)
 
4 Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.
 
5 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.
 
6 To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.
 

 
Exhibit A to Credit Agreement
-2-
 
 

 


The terms set forth in this Assignment and Assumption are hereby agreed to:
 

 
ASSIGNOR[S] 7
[NAME OF ASSIGNOR]
 
 
By:
 
   
Title:
   
   
 
[NAME OF ASSIGNOR]
 
 
By:
 
   
Title:
   
 
ASSIGNEE[S] 8
[NAME OF ASSIGNEE]
 
 
By:
 
   
Title:
   
 
Address for Notice:
 
[NAME OF ASSIGNEE]
 
 
By:
 
   
Title:
   
 
Address for Notices:



 
7 Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).
 
8 Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).

Exhibit A to Credit Agreement
-3-
 
 

 

 
[Consented to and] 1 Accepted:

[NAME OF ADMINISTRATIVE AGENT], as
  Administrative Agent

By:
 
 
 
Title:
 

[Consented to:] 2

[NAME OF RELEVANT PARTY]

By:
 
 
 
Title:
 

 
 
 


 
1 To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.
 
2 To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.

 
Exhibit A to Credit Agreement
-4-
 
 

 

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

1.            Representations and Warranties .

1.1            Assignor[s] .  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2.            Assignee[s] .  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 11.2(b) of the Credit Agreement (subject to such consents, if any, as may be required under Section 11.2(b) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.1 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, (ii) it will perform in accordance with their terms all of the

Exhibit A to Credit Agreement
-5-
 
 

 

obligations which by the terms of the Loan Documents are required to be performed by it as a Lender, and (iii) acknowledges and agrees that, as a Lender, it may receive material non-public information and confidential information concerning the Loan Parties and their Affiliates and Securities and agrees to use such information only in accordance with Section 11.20 of the Credit Agreement.

2.            Payments .  From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.  Notwithstanding the foregoing, the Administrative Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to [the][the relevant] Assignee.

3.            Miscellaneous .  This Assignment and Assumption is a Loan Document and, as such is subject to certain provisions of the Credit Agreement, including Sections 1.5 , and 11.15 thereof.

4.            General Provisions .  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

Exhibit A to Credit Agreement
-6-
 
 

 

EXHIBIT B-1
TO
CREDIT AGREEMENT
 
FORM OF REVOLVING NOTE
 
 
Lender: [_____]
New York, New York
Principal Amount: $[_____]
 
[_____, ___]
 
 
FOR VALUE RECEIVED, the undersigned, Cinedigm Digital Funding 2, LLC, a Delaware limited liability company (the “ Borrower ”), hereby promises to pay to the order of the lender set forth above (the “ Lender ”) the Principal Amount set forth above, or, if less, the aggregate unpaid principal amount of the Revolving Loans of the Lender to the Borrower, payable at such times and in such amounts as are specified in the Credit Agreement (as hereinafter defined).
 
The Borrower promises to pay interest on the unpaid principal amount of the Revolving Loans from the date made until such principal amount is paid in full or converted to a Delayed Draw Term Loan on the Revolving Loan Conversion Date, payable at such times and at such interest rates as are specified in the Credit Agreement. Demand, diligence, presentment, protest and notice of non-payment and protest are hereby waived by the Borrower.
 
Both principal and interest are payable in Dollars to the Administrative Agent in immediately available funds in accordance with the Credit Agreement.
 
This Note is one of the Revolving Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, dated as of [•], 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among the Borrower, the Lenders party thereto, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders. Capitalized terms used herein without definition are used as defined in the Credit Agreement.
 
The Credit Agreement, among other things, (a) provides for the making of Revolving Loans by the Lender to the Borrower in an aggregate amount not to exceed at any time outstanding the Principal Amount set forth above, the indebtedness of the Borrower resulting from such Revolving Loans being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid principal amount of this Note upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein.
 
This Note is a Loan Document, is entitled to the benefits of the Loan Documents, and is subject to certain provisions of the Credit Agreement, including Sections 1.5 , 11.14(a) and 11.15 thereof.
 
This Note is a registered obligation, transferable only upon notation in the Register, and no assignment hereof shall be effective until recorded therein.
 

Exhibit B-1 to Credit Agreement
-1-
 
 

 

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

Exhibit B-1 to Credit Agreement
-2
 
 

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer as of the day and year and at the place set forth above.
 
 
 
CINEDIGM DIGITAL FUNDING 2, LLC
 
 
 
 
By:
 
  Name:  
  Title:
 
   
 

 

Exhibit B-1 to Credit Agreement
-3-
 
 

 

EXHIBIT B-2
TO
CREDIT AGREEMENT
 
FORM OF INITIAL ADVANCE TERM LOAN NOTE
 
 
 
Lender: [_____]
New York, New York
Principal Amount: $[_____]
 
[_____, ___]
 
 
FOR VALUE RECEIVED, the undersigned, Cinedigm Digital Funding 2, LLC, a Delaware limited liability company (the “ Borrower ”), hereby promises to pay to the order of the lender set forth above (the “ Lender ”) the Principal Amount set forth above, or, if less, the aggregate unpaid principal amount of the Initial Advance Term Loans of the Lender to the Borrower, payable at such times and in such amounts as are specified in the Credit Agreement (as hereinafter defined).
 
The Borrower promises to pay interest on the unpaid principal amount of the Revolving Loans from the date made until such principal amount is paid in full, payable at such times and at such interest rates as are specified in the Credit Agreement. Demand, diligence, presentment, protest and notice of non-payment and protest are hereby waived by the Borrower.
 
Both principal and interest are payable in Dollars to the Administrative Agent in immediately available funds in accordance with the Credit Agreement.
 
This Note is one of the Initial Advance Term Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, dated as of [•], 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among the Borrower, the Lenders party thereto, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders. Capitalized terms used herein without definition are used as defined in the Credit Agreement.
 
The Credit Agreement, among other things, (a) provides for the making of Initial Advance Term Loans by the Lender to the Borrower in an aggregate amount not to exceed at any time outstanding the Principal Amount set forth above, the indebtedness of the Borrower resulting from such Initial Advance Term Loans being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid principal amount of this Note upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein.
 
This Note is a Loan Document, is entitled to the benefits of the Loan Documents, and is subject to certain provisions of the Credit Agreement, including Sections 1.5 , 11.14(a) and 11.15 thereof.
 
This Note is a registered obligation, transferable only upon notation in the Register, and no assignment hereof shall be effective until recorded therein.
 
This Note shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 

Exhibit B-2 to Credit Agreement
-1
 
 

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer as of the day and year and at the place set forth above.
 
 
 
CINEDIGM DIGITAL FUNDING 2, LLC
 
 
 
 
By:
 
  Name:  
  Title:
 
   
 
 

Exhibit B-2 to Credit Agreement
-2
 
 

 

EXHIBIT B-3
TO
CREDIT AGREEMENT
 
FORM OF DELAYED DRAW TERM LOAN NOTE
 
 
Lender: [_____]
New York, New York
Principal Amount: $[_____]
 
[_____, ___]
 
 
FOR VALUE RECEIVED, the undersigned, Cinedigm Digital Funding 2, LLC, a Delaware limited liability company (the “ Borrower ”), hereby promises to pay to the order of the lender set forth above (the “ Lender ”) the Principal Amount set forth above, or, if less, the aggregate unpaid principal amount of the Delayed Draw Term Loans of the Lender to the Borrower, payable at such times and in such amounts as are specified in the Credit Agreement (as hereinafter defined).
 
The Borrower promises to pay interest on the unpaid principal amount of the Revolving Loans from the date made until such principal amount is paid in full, payable at such times and at such interest rates as are specified in the Credit Agreement. Demand, diligence, presentment, protest and notice of non-payment and protest are hereby waived by the Borrower.
 
Both principal and interest are payable in Dollars to the Administrative Agent in immediately available funds in accordance with the Credit Agreement.
 
This Note is one of the Delayed Draw Term Loan Notes referred to in, and is entitled to the benefits of, the Credit Agreement, dated as of [•], 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among the Borrower, the Lenders party thereto, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders. Capitalized terms used herein without definition are used as defined in the Credit Agreement.
 
The Credit Agreement, among other things, (a) provides for the making of Delayed Draw Term Loans by the Lender to the Borrower in an aggregate amount not to exceed at any time outstanding the Principal Amount set forth above, the indebtedness of the Borrower resulting from such Delayed Draw Term Loans being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid principal amount of this Note upon the happening of certain stated events and also for prepayments on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein.
 
This Note is a Loan Document, is entitled to the benefits of the Loan Documents, and is subject to certain provisions of the Credit Agreement, including Sections 1.5 , 11.14(a) and 11.15 thereof.
 
This Note is a registered obligation, transferable only upon notation in the Register, and no assignment hereof shall be effective until recorded therein.
 
This Note shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 

Exhibit B-3 to Credit Agreement
-1-
 
 

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer as of the day and year and at the place set forth above.
 
 
 
CINEDIGM DIGITAL FUNDING 2, LLC
 
 
 
 
By:
 
  Name:  
  Title:
 
   
                                                              


Exhibit B-3 to Credit Agreement
-2-
 
 

 

EXHIBIT C
TO
CREDIT AGREEMENT
 
FORM OF NOTICE OF BORROWING
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
as administrative agent under the Credit Agreement referred to below
 
[_____ ___, ____]
 
Attention: [•]
 
 
 
Re:
CINEDIGM DIGITAL FUNDING 2, LLC (the “Borrower”)
 
Reference is made to the Credit Agreement, dated as of [•], 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among the Borrower, the Lenders party thereto, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders. Capitalized terms used herein without definition are used as defined in the Credit Agreement.
 
The Borrower hereby gives you irrevocable notice, pursuant to Section 2.2 of the Credit Agreement of its request of a Borrowing (the “ Proposed Borrowing ”) under the Credit Agreement and, in that connection, sets forth the following information:
 
A.     The date of the Proposed Borrowing is [_____, ___].
 
B.     The aggregate principal amount of the [[Initial Advance Term][Delayed Draw Term][Revolving] Loans][release of funds from the DDTL Escrow Account] constituting the Proposed Borrowing is $[_____], of which $[_____] consists of Base Rate Loans and $[_____] consists of Eurodollar Rate Loans having an initial Interest Period of [_____] months.
 
 
 
CINEDIGM DIGITAL FUNDING 2, LLC
 
 
 
 
By:
 
  Name:  
  Title:
 
   
 
 

 
Exhibit C to Credit Agreement
-1-
 
 

 

EXHIBIT D
TO
CREDIT AGREEMENT
 
FORM OF NOTICE OF CONVERSION OR CONTINUATION
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
 
as administrative agent under the Credit Agreement referred to below
 
 [_____ ___, ____]
Attention: [_____]
 
 
 
Re:
CINEDIGM DIGITAL FUNDING 2, LLC (the “Borrower”)
 
Reference is made to the Credit Agreement, dated as of [•], 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among the Borrower, the Lenders party thereto, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders. Capitalized terms used herein without definition are used as defined in the Credit Agreement.
 
The Borrower hereby gives you irrevocable notice, pursuant to Section 2.7 of the Credit Agreement of its request for the following:
 
(i)   a continuation, on [_____, ___] 1 , as Eurodollar Rate Loans having an Interest Period of [_____] 2 months of [Initial Advance Term][Delayed Draw Term][Revolving] Loans in an aggregate outstanding principal amount of $[_____] having an Interest Period ending on the proposed date for such continuation;
 
(ii)   a conversion, on [_____, ___] 1 , to Eurodollar Rate Loans having an Interest Period of [_____] 2 months of [Initial Advance Term][Delayed Draw Term][Revolving] Loans in an aggregate outstanding principal amount of $[_____]; and
 
(iii)   a conversion, on [_____, ___] 1 , to Base Rate Loans, of [Initial Advance Term][Delayed Draw Term][Revolving] Loans in an aggregate outstanding principal amount of $[_____].
 
In connection herewith, the undersigned hereby certifies that (i) no Event of Default has occurred and is continuing on the date hereof, both before and after giving effect to any Loan to be made on or before any date for any proposed conversion or continuation set forth above and (ii) there is no suspension in effect under Section 2.12 of the Credit Agreement.
 
[Signature Page Follows.]


 
1 Must be a Business Day.
 
2 Must be 1, 2 or 3 months.
 
Exhibit D to Credit Agreement
-1-
 
 

 

 
 
CINEDIGM DIGITAL FUNDING 2, LLC
 
 
 
 
By:
 
  Name:  
  Title:
 
   
 


 
Exhibit D to Credit Agreement
-2-
 
 

 

EXHIBIT E
TO
CREDIT AGREEMENT
 
FORM OF COMPLIANCE CERTIFICATE
 
[_____, ___] 1
 
This COMPLIANCE CERTIFICATE (this “ Compliance Certificate ”) is delivered pursuant to Section 6.1(d) of the Credit Agreement, dated as of [•], 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Cinedigm Digital Funding 2, LLC (the “ Borrower ”), the Lenders party thereto, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders. Capitalized terms used herein without definition are used as defined in the Credit Agreement.
 
The undersigned, a duly authorized Responsible Officer of the Borrower having the name and title set forth below under his signature, hereby certifies, on behalf of the Borrower for the benefit of the Secured Parties and pursuant to Section 6.1 of the Credit Agreement that such Responsible Officer of the Borrower is familiar with the Credit Agreement and that, in accordance with each of the following sections of the Credit Agreement, each of the following is true on the date hereof, both before and after giving effect to any Term Loan to be made on or before the date hereof:
 
(a)     In accordance with Section 6.1[(b)/(c)] of the Credit Agreement, attached hereto as Annex A are the Financial Statements for the [Fiscal Quarter/Fiscal Year] ended [_____, ___] required to be delivered pursuant to Section 6.1[(b)/(c)] of the Credit Agreement (the “ Attached Financial Statements ”). The Attached Financial Statements fairly present in all material respects the Consolidated and consolidating financial position, results of operations and cash flow of Holdings and the Group Members as at the dates indicated therein and for the periods indicated therein in accordance with GAAP [(subject to the absence of footnote disclosure and normal year-end audit adjustments)] 2 [without qualification as to the scope of the audit or as to going concern and without any other similar qualification, together with the certificate from the Group Members’ Accountants with respect to such Consolidated Financial Statements required to be delivered pursuant to Section 6.1(c) of the Credit Agreement.] 3
 
(b)     In accordance with Section 6.1(d) of the Credit Agreement, attached hereto as Annex B are the calculations used to determine compliance with each covenant contained in Article V of the Credit Agreement.  Such calculations demonstrate compliance with each covenant contained in Article V of the Credit Agreement.
 


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

 
Exhibit E to Credit Agreement
-1-
 
 

 

(c)     In accordance with Section 6.1(d) of the Credit Agreement, attached hereto as Annex C in reasonable detail are (i) the calculations used to determine the amount of Capital Expenditures made by Holdings or any Group Member [as of the end of the applicable fiscal period] and (ii) all amounts paid by the Administrative Servicer, for Capital Expenditures.
 
(d)     In accordance with Section 6.1(d) of the Credit Agreement, attached hereto as Annex D is a list of all Installed Digital Systems and the location of the same as of the date hereof.
 
(e)     In accordance with Section 6.1(d) of the Credit Agreement, no Default has occurred and is continuing as of the date hereof, except as provided for on Annex E attached hereto, with respect to each of which the Borrower proposes to take the actions set forth on Annex E .
 
(f)     In accordance with Section 6.1(e) of the Credit Agreement, (i) the Corporate Chart attached hereto as Annex F[-1] ] or the last Corporate Chart delivered pursuant to such Section) is correct and complete as of the date hereof, (ii) the Loan Parties have delivered all documents (including updated schedules as to locations of Collateral and acquisition of Intellectual Property or real property) required to be delivered pursuant to any Loan Document by any Loan Party on or prior to the date hereof have been delivered thereunder (or such delivery requirement was otherwise duly waived or extended) and (iii) complete and correct copies of all documents modifying any term of any Constituent Document of any Loan Party or joint venture thereof on or prior to the date hereof have been delivered to the Administrative Agent [or are attached hereto as Annex F[-2] ].
 
(g)     In accordance with Section 6.1(g) of the Credit Agreement, attached hereto as Annex G is a discussion and analysis of the financial condition and results of operations of Holdings and the Group Members for the portion of the Fiscal Year elapsed on or prior to the date hereof discussing the reasons for any significant variations from the Projections for such period and the figures for the corresponding period in the previous Fiscal Year.
 
(h)     In accordance with Section 6.1(h) of the Credit Agreement, attached hereto as Annex H is a complete and correct summary of the outstanding balances of all intercompany Indebtedness among Holdings, the Group Members and their Affiliates as of the last day of the Fiscal Quarter covered by the Attached Financial Statements.
 
(i)     [In accordance with Section 6.1(i) of the Credit Agreement, attached hereto as Annex I is a complete and correct copy of each management letter, audit report or similar letter or report received by Holdings or any Group Member from any independent registered certified public accountant (including the Group Members’ Accountants) in connection with the Attached Financial Statements or any audit thereof
 
(j)     In accordance with Section 6.1(j) of the Credit Agreement, attached hereto as Annex J is a complete and correct (i) a certification from each insurer or by an
 

Exhibit E to Credit Agreement
-2-
 
 

 

authorized representative of each insurer identifying the underwriters, the type of insurance, the limits, deductibles, and the term of each policy and specifying the specific provisions delineated in clause (b) of Schedule 7.5 to the Credit Agreement and (ii) a statement from an independent insurance broker, reasonably acceptable to the Administrative Agent, stating that (A) all premiums then due have been paid and (B) in the opinion of such broker, the insurance maintained by the Borrower is in accordance with clause (b) of Schedule 7.5 to the Credit Agreement.] 4
 
IN WITNESS WHEREOF, the undersigned has executed this certificate on the date first written above.
 
 
 
CINEDIGM DIGITAL FUNDING 2, LLC
 
 
 
 
By:
 
  Name:  
  Title:
 
   



 
4  Insert bracketed language only for annual reports.
                           

Exhibit E to Credit Agreement
-3-
 
 

 

ANNEX A
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
 
DATED [_____, ___]
 
FINANCIAL STATEMENTS
 
 
 

Exhibit E to Credit Agreement
-4-
 
 

 

ANNEX B
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
FINANCIAL CALCULATIONS
 
 
 

 
Exhibit E to Credit Agreement
-5-
 
 

 

ANNEX C
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
CAPITAL EXPENDITURES
 
 
 

 
Exhibit E to Credit Agreement
-6-
 
 

 

ANNEX D
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
INSTALLED DIGITAL SYSTEMS
 
 
 

Exhibit E to Credit Agreement
-7-
 
 

 

[ANNEX E
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
continuing defaults] 5


 
5  Delete if not used in the text of the certificate.  If used, list the nature of each Default that has occurred and is continuing and the action that the Borrower proposes to take with respect thereto.
 
 

 
Exhibit E to Credit Agreement
-8-
 
 

 

ANNEX F[-1]
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
CORPORATE CHART
 
 
 

Exhibit E to Credit Agreement
-9-
 
 

 

ANNEX F[-2]
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
MODIFICATIONS TO CONSTITUENT DOCUMENTS
 
 
 

Exhibit E to Credit Agreement
-10-
 
 

 

ANNEX G
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
MANAGEMENT DISCUSSION AND ANALYSIS
 
 
 

Exhibit E to Credit Agreement
-11-
 
 

 

ANNEX H
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
OUTSTANDING BALANCES OF INTERCOMPANY INDEBTEDNESS
 
 
 

Exhibit E to Credit Agreement
-12-
 
 

 

ANNEX I
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
MANAGEMENTS LETTER, AUDIT REPORT, ETC.
 
 
 

 
Exhibit E to Credit Agreement
-13-
 
 

 

ANNEX J
TO
COMPLIANCE CERTIFICATE OF CINEDIGM DIGITAL FUNDING 2, LLC
DATED [_____, ___]
 
SUMMARY OF MATERIAL INSURANCE COVERAGE
 
 
 

Exhibit E to Credit Agreement
-14-
 
 

 

EXHIBIT F
TO
CREDIT AGREEMENT
 
FORM OF GUARANTY AND SECURITY AGREEMENT
 
(See attached.)
 
 
 

Exhibit F to Credit Agreement
-1-
 
 

 

EXHIBIT G
TO
CREDIT AGREEMENT
 
FORM OF EXHIBITOR AGREEMENT
 
(See attached.)
 
 
 
 

Exhibit G to Credit Agreement
-1-
 
 

 

EXHIBIT H
TO
CREDIT AGREEMENT
 
FORM OF SERVICE AGREEMENT
 
(See attached.)
 

Exhibit H to Credit Agreement
-1-
 
 

 


 
EXHIBIT I
TO
CREDIT AGREEMENT
 
FORM OF NOTICE OF DDTL TERMINATION DATE FUNDING
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
as administrative agent under the Credit Agreement referred to below
 
[_____ ___, ____]
 
Attention: [•]
 
 
 
Re:
CINEDIGM DIGITAL FUNDING 2, LLC (the “Borrower”)
 
Reference is made to the Credit Agreement, dated as of [•], 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among the Borrower, the Lenders party thereto, and Société Générale, New York Branch, as administrative agent and collateral agent for the Lenders. Capitalized terms used herein without definition are used as defined in the Credit Agreement.
 
The Borrower hereby gives you irrevocable notice, pursuant to Section 2.2(b) of the Credit Agreement of its request of a DDTL Termination Date Funding (the “ Proposed DDTL Termination Funding ”) under the Credit Agreement and, in that connection, sets forth the following information:
 
A.     The date of the Proposed DDTL Termination Funding is the DDTL Termination Date.
 
B.     The aggregate principal amount of the Delayed Draw Term Loans constituting the Proposed DDTL Termination Funding is $[_____].
 
 
 
 
CINEDIGM DIGITAL FUNDING 2, LLC
 
 
 
 
By:
 
  Name:  
  Title:
 
   


 

Exhibit I to Credit Agreement
-1-
 
 

 

EXHIBIT J
TO
CREDIT AGREEMENT
 
FORM OF SYSTEMS FINANCING NOTICE
 
(See attached.)
 

Exhibit J to Credit Agreement
-1-
 
 

 

EXHIBIT 10.2
 
Execution Version









MULTIPARTY AGREEMENT

 
Dated as of October 18, 2011

among

CINEDIGM DIGITAL FUNDING 2, LLC,
as Borrower,
 
 
ACCESS DIGITAL CINEMA PHASE 2, CORP.,

CDF2 HOLDINGS, LLC,

CINEDIGM DIGITAL CINEMA CORP.,

CHG-MERIDIAN U.S. FINANCE, LTD.,

SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH,
as Senior Agent

and
 
                        BALLANTYNE STRONG, INC.,
                    as Approved Vendor

 
 
 
 

 
 

 
 
TABLE OF CONTENTS
 
   
Page
 
 
SECTION 1.
 
Definitions
 
 
1.1
 
Defined Terms
 
 
1.2
 
Terms Generally
 
 
SECTION 2.
 
Priority of Liens
 
 
2.1
 
Separate Classification, Subordination
 
 
2.2
 
Prohibition on Contesting Liens
 
 
2.3
 
No New Liens
 
 
2.4
 
Similar Liens and Agreements
 
 
SECTION 3.
 
Consent and Agreement
 
 
3.1
 
Consent to Assignment and Contribution
 
 
3.2
 
Rights Upon Event of Default Under Phase 2 Collateral Contracts
 
 
3.3
 
Payment Direction
 
 
3.4
 
Consent to Contract Change
 
 
SECTION 4.
 
Cash Management and Waterfall
 
 
4.1
 
Establishment of Cash Management Accounts
 
 
4.2
 
Deposits into Collection Account or Distributor Lockbox Account; Transfer to Collection Account
 
 
 
4.3
 
Debt Service Reserve and Debt Service Reserve Account
 
 
4.4
 
Applications on Monthly Application Date
 
 
4.5
 
Applications on Quarterly Application Date
 
 
4.6
 
Retention by Holdings
 
 
4.7
 
Distributions from the Debt Service Account
 
 
4.8
 
Payment Instructions
 
 
4.9
 
Deposits To/Distributions From Equipment Purchase Account
 
 
4.10
 
Deposits To/Distributions From Holdings Operating Account;  Insufficiency
 
 
4.11
 
No Agent Liability
 
 
4.12
 
SG Advisory Fee Note
 
 
4.13
 
CHG Indemnification Obligations
 
 
4.14
 
Use of Senior Facilities Proceeds
 
 
SECTION 5.
 
Enforcement
 
 

 
-i-
 

 
 

 

TABLE OF CONTENTS
(continued)
 
   
Page
 
 
5.1
 
Exercise of Remedies
 
 
5.2
 
Actions Upon Breach
 
 
5.3
 
Step In Rights With Respect to the CDF2 Loan Documents
 
 
5.4
 
Step In Rights With Respect to the CHG Lease Facility Documents
 
 
5.5
 
Step In Rights With Respect to the Management Services Agreement
 
 
5.6
 
Step In Rights With Respect to Exhibitor Agreements
 
 
5.7
 
Step In Rights With Respect to Supply Agreements
 
 
5.8
 
Step In Rights With Respect to Digital Cinema Deployment Agreements
 
 
SECTION 6.
 
Payments
 
 
6.1
 
Application of Proceeds
 
 
6.2
 
Payments Over
 
 
SECTION 7.
 
Other Agreements
 
 
7.1
 
Releases
 
 
7.2
 
Insurance
 
 
7.3
 
Amendments to CHG Lease Facility Documents; Senior Documents
 
 
7.4
 
Rights As Unsecured Creditors
 
 
7.5
 
Bailee for Perfection
 
 
7.6
 
When Discharge of Senior Facilities Obligations and CHG Lease Obligations Deemed to Not Have Occurred
 
 
7.7
 
Option to Purchase Senior Obligations
 
 
7.8
 
CHG Right to Cure
 
 
7.9
 
Deliveries under CHG Lease Facility Documents
 
 
7.10
 
CHG Right to Assign
 
 
7.11
 
Vendor Note Assignment
 
 
7.12
 
Applicable Tax Amount
 
 
SECTION 8.
 
Subordination Provisions
 
 
8.1
 
Subordination of Liabilities
 
 
8.2
 
Grantors Not to Make Payments with Respect to Specified Subordinated Debt in Certain Circumstances; Remedies
 
 
8.3
 
Subordination to Prior Payment of All Specified Senior Debt, Dissolution, Liquidation or Reorganization of Grantor
 
 

 
-ii-
 

 
 

 

TABLE OF CONTENTS
(continued)
 
   
Page
 
 
8.4
 
Obligations of the Grantors Unconditional
 
 
8.5
 
Subordination Rights Not Impaired by Acts or Omissions of the Grantors or Holders of Specified Senior Debt
 
 
8.6
 
Reinstatement
 
 
8.7
 
Waivers of Specified Subordinated Creditors
 
 
8.8
 
Assignment of the Specified Subordinated Debt
 
 
8.9
 
Amendments to the Specified Subordinated Debt
 
 
8.10
 
SG Advisory Fee Note
 
 
SECTION 9.
 
Insolvency or Liquidation Proceeding
 
 
9.1
 
Finance and Sale Issues
 
 
9.2
 
Relief from the Automatic Stay
 
 
9.3
 
Adequate Protection
 
 
9.4
 
No Waiver; Voting Rights
 
 
9.5
 
Preference Issues
 
 
9.6
 
Post-Petition Interest
 
 
9.7
 
Waiver
 
 
9.8
 
Limitations
 
 
SECTION 10.
 
Reliance; Waivers; Etc
 
 
10.1
 
Reliance
 
 
10.2
 
No Warranties or Liability
 
 
10.3
 
No Waiver of Lien Priorities
 
 
10.4
 
Waiver of Liability
 
 
10.5
 
Obligations Unconditional
 
 
SECTION 11.
 
Miscellaneous
 
 
11.1
 
Conflicts
 
 
11.2
 
Effectiveness; Continuing Nature of this Agreement; Severability
 
 
11.3
 
Amendments; Waivers
 
 
11.4
 
Information Concerning Financial Condition of the Grantors and their Subsidiaries
 
 
11.5
 
Subrogation
 
 
11.6
 
Application of Payments
 
 

 
-iii-
 

 
 

 
 
 
TABLE OF CONTENTS
(continued)
 
   
Page
 
 
11.7
 
SUBMISSION TO JURISDICTION; WAIVERS
 
 
11.8
 
Notices
 
 
11.9
 
Further Assurances
 
 
11.10
 
APPLICABLE LAW
 
 
11.11
 
Binding on Successors and Assigns
 
 
11.12
 
Specific Performance
 
 
11.13
 
Headings
 
 
11.14
 
Counterparts
 
 
11.15
 
Authorization
 
 
11.16
 
No Third Party Beneficiaries; Effect of Agreement
 
 
11.17
 
Provisions Solely to Define Relative Rights
 
 
11.18
 
Additional Grantors; Joinders
 
 
11.19
 
The Senior Agents and CHG
 
 
11.20
 
Relationship of Creditors
 
 


 
-iv-
 

 
 

 

 
MULTIPARTY AGREEMENT
 
This MULTIPARTY AGREEMENT, dated as of October 18, 2011, and entered into by and among CINEDIGM DIGITAL FUNDING 2, LLC, a Delaware limited liability company (the " Borrower "), ACCESS DIGITAL CINEMA PHASE 2, CORP., a Delaware corporation (" Parent Holdings "), CDF2 HOLDINGS, LLC, a Delaware limited liability company (" Holdings "), CINEDIGM DIGITAL CINEMA CORP., a Delaware corporation (" Cinedigm "), each Grantor (as defined herein) from time to time party hereto, CHG-MERIDIAN U.S. FINANCE, LTD., a California corporation (together with its successors and permitted assigns under the CHG Lease Agreement (as defined herein) and the CDF2 Loan Agreement (as defined herein), " CHG "), SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH (" SG "), as collateral agent (in such capacity, together with its successors and assigns in such capacity from time to time, the " Senior Collateral Agent ") and administrative agent (in such capacity and together with any successors and assigns in such capacity, the " Senior Administrative Agent ") under the Senior Credit Documents (as defined herein), BALLANTYNE STRONG, INC. (" Ballantyne "), a Delaware corporation and the other Approved Vendors (as defined in the Senior Credit Agreement) from time to time parties hereto (together with Ballantyne, the " Approved Vendors ").  Capitalized terms used herein but not otherwise defined herein have the meanings set forth in Section 1 below.
 
W I T N E S S E T H
 
WHEREAS, the Borrower, the Senior Lenders party thereto from time to time and the Senior Agents are party to that certain Credit Agreement, dated as of October 18, 2011 (as amended, restated, supplemented, modified and/or Refinanced from time to time, the " Senior Credit Agreement ") providing for the making of Senior Revolving Loans and Senior Term Loans to the Borrower, all as provided therein;
 
WHEREAS, the Borrower, as lender, and CHG, as borrower, are party to that certain Non-Recourse Loan Agreement, dated as of October 18, 2011 (as amended, restated, supplemented, modified and/or Refinanced from time to time, the " CDF2 Loan Agreement ") providing for the making of CDF2 Non-Recourse Loans as provided therein with certain proceeds of the Senior Term Loans;
 
WHEREAS, CHG and any other CHG Lease Participants provided a lease facility under two or more master lease agreements and associated lease schedules (collectively, the " CHG Lease Agreement ") to Holdings, as evidenced by the CHG Lease Facility Documents, each dated as of October 18, 2011, and as may be amended, restated, supplemented, modified and/or Refinanced from time to time, in an aggregate advanced amount of up to $28,900,000 which (when combined with the proceeds of the CDF2 Non-Recourse Loans advanced to CHG under the CDF2 Loan Documents) will fund up to $58,500 per Designated Installed Digital System and up to $53,500 per any other Installed Digital System;
 
WHEREAS, Holdings has executed or will execute promissory notes in favor of each Approved Vendor (each such promissory note, a " Vendor Note "), each such Vendor Note evidencing Holdings' obligation to pay to such Approved Vendor a portion of the purchase price for Digital Systems supplied to Holdings by such Approved Vendor pursuant to the Supply
 

 
 

 

Agreement entered into by Holdings and such Approved Vendor, on a subordinated basis after payment in full in cash of all Specified Senior Obligations and subject to the other terms and conditions of this Agreement;
 
WHEREAS, Holdings has executed or will execute a Subordinated Promissory Note, dated as of October 18, 2011 (such note, and any notes issued under Section 9.1(a) of the Management Services Agreement, the " Cinedigm Installation Notes " and, together with each Vendor Note, the " First Subordinated Notes "), in favor of Cinedigm, evidencing Holdings' obligation to pay to Cinedigm a portion of the Installation Management Fees payable by Holdings to Cinedigm pursuant to the Management Services Agreement, on a subordinated basis after payment in full in cash of all Specified Senior Obligations and subject to the other terms and conditions of this Agreement;
 
WHEREAS, Holdings will execute certain Subordinated Promissory Notes under Section 4.4(i) or Section 4.5(i) of this Agreement (the " Cinedigm Servicing Notes " or the " Second Subordinated Notes " and, together with the First Subordinated Notes, the " Subordinated Notes "), in favor of Cinedigm, evidencing Holdings' obligation to pay to Cinedigm a portion of the Incentive Servicing Fees payable by Holdings to Cinedigm pursuant to the Management Services Agreement, on a subordinated basis after payment in full in cash of all Senior Obligations, CDF2 Loan Obligations, CHG Lease Obligations and the First Subordinated Notes and subject to the other terms and conditions of this Agreement;
 
WHEREAS, the obligations of the Borrower and the other Grantors under the Senior Credit Documents and the Hedging Agreements with one or more Secured Hedging Counterparties are secured by the Senior Collateral pursuant to the terms of the Senior Security Documents;
 
WHEREAS, the obligations of CHG under the CDF2 Loan Documents are secured by the CDF2 Loan Collateral pursuant to the terms of the CDF2 Loan Security Documents; and
 
WHEREAS, the obligations of Holdings under the CHG Lease Facility Documents are secured by the CHG Lease Collateral pursuant to the terms of the CHG Lease Security Documents;
 
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
 
SECTION 1 .   Definitions .
 
1.1     Defined Terms . As used in this Agreement, the following terms shall have the following meanings:
 
" Accrued Default Interest " has the meaning set forth in the Senior Credit Agreement.
 

 
2

 

" Administrative Servicer " means Cinedigm, in its capacity as administrative servicer under the Management Services Agreement or any successor administrative servicer appointed in accordance with the terms of the Management Services Agreement and the Senior Credit Agreement.
 
" Advisory Engagement Letter " means the Cinedigm Digital Funding 2 Advisory Engagement letter, dated June 23, 2011, among Parent Holdings, Cinedigm and SG Americas Securities, LLC, as amended.
 
" Affiliate " means, with respect to any Person, each officer, director, general partner or joint-venturer of such Person and any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.  For purpose of this definition, " control " means the possession of either (a) the power to vote, or the beneficial ownership of, 10% or more of the Voting Stock of such Person or (b) the power to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
 
" Agreement " means this Multiparty Agreement, as amended, restated, renewed, extended, supplemented and/or otherwise modified from time to time in accordance with the terms hereof.
 
" Applicable Tax Amount " has the meaning set forth in Section 7.12 hereof.
 
" Application Date " means a Monthly Application Date or a Quarterly Application Date, as the case may be.
 
" Approved Exhibitor " means an Exhibitor acceptable to (a) prior to the Effective Date, the Bookrunners and (b) thereafter, the Senior Administrative Agent, in whose theaters Digital Systems are installed.
 
" Approved Vendor " has the meaning set forth in the Senior Credit Agreement.
 
" Availability Period " has the meaning set forth in the Senior Credit Agreement.
 
" Average Screens in Service " means, for any period of determination, the quotient of (a) the sum of (i) the aggregate number of Screens in Service on (A) the Effective Date if the Effective Date falls within such period or (B) the first day of the first full fiscal month in such period if the Effective Date does not fall within such period, (ii) the aggregate number of Screens in Service on the first day of each of the subsequent full fiscal months in such period (other than the last such month of such period), and (iii) the aggregate number of Screens in Service on the last day of such period, divided by (b) the number of full fiscal months in such period of determination.  For purposes of clause (b) , the fiscal month in which the Effective Date occurs shall be deemed to be a full fiscal month.
 
By way of example, for a four-fiscal month period consisting of the months of January, February, March and April, and assuming that the Effective Date occurs on January 10, if there are
 
·  
5 Screens in Service on January 1,

 
3

 

·  
10 Screens in Service on January 10 ( i.e. , the Effective Date),
·  
20 Screens in Service on February 1,
·  
40 Screens in Service on March 1,
·  
45 Screens in Service on April 1 and
·  
50 Screens in Service on April 30,

then the Average Screens in Service for such four-month period is equal to 30.
 
" Back-Up Services Expenses " has the meaning set forth in the Management Services Agreement.
 
" Ballantyne " has the meaning set forth in the preamble of this Agreement.
 
" Ballantyne Supply Agreement " means that certain Digital System Supply Agreement by and between Holdings and Ballantyne, dated as of August 16, 2011, as the same may be amended, modified, restated, supplemented and/or replaced from time to time.
 
" Bankruptcy Code " means Title 11 of the United States Code entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.
 
" Bankruptcy Law " means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.
 
" Bookrunners " has the meaning set forth in the Senior Credit Agreement.
 
" Borrower " has the meaning set forth in the preamble of this Agreement.
 
" Borrowing " has the meaning set forth in the Senior Credit Agreement.
 
" Business Day " means any day except a Saturday, Sunday or any day on which banks are required or authorized to close in New York City or the State of New Jersey.
 
" Capital Expenditures " means, for any Person for any period, the aggregate of all expenditures, whether or not made through the incurrence of Indebtedness, by such Person and its Subsidiaries during such period for the purchase, acquisition, leasing (pursuant to a Capital Lease), receipt, delivery, construction, installation, replacement, repair, redeployment, substitution or improvement of fixed or capital assets or additions to such assets, in each case required to be capitalized under GAAP on a Consolidated balance sheet of such Person, excluding interest capitalized during construction.
 
" Capital Lease " means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any property (whether real, personal or mixed) by such Person as lessee that has been or is required to be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.
 
" Cash Collateral " has the meaning set forth in Section 363(a) of the Bankruptcy Code.
 

 
4

 

" Cash Collateral Account " means (a) a deposit account or securities account in the name of the Borrower and under the exclusive "control" (as defined in the applicable UCC) of the Senior Collateral Agent and (i) in the case of a deposit account, from which the Borrower may not make withdrawals except as permitted by the Senior Collateral Agent and (ii) in the case of a securities account, with respect to which the Senior Collateral Agent shall be the entitlement holder and the only Person authorized to give (or to authorize another Person to give) entitlement orders with respect thereto and (b) solely with respect to amounts paid by Distributors with respect to Installed Digital Systems, the Distributor Lockbox Account.
 
" Cash Equivalents " has the meaning set forth in the Senior Credit Agreement.
 
" Cash Expense Report " has the meaning set forth in the Senior Credit Agreement.
 
" Cash Management Accounts " has the meaning set forth in Section 4.1(a) hereof.
 
" Casualty Value " has the meaning set forth in the CHG Lease Agreement.
 
" CDF2 Loan Agreement " has the meaning set forth in the recitals hereto.
 
" CDF2 Loan Collateral " means (a) all Digital Systems acquired by CHG from Holdings pursuant to the CHG Sale Leaseback, (b) CHG's rights in and to each CHG Lease Facility Document (as lessor/Holdings' counterparty) and the Use Tax Account, (c) CHG's rights in and to each Digital Cinema Deployment Agreement, each Exhibitor Agreement, each CHG Lease Facility Document, each Supply Agreement and the Management Services Agreement (in each case to the extent assigned to CHG by Holdings pursuant to the CHG Lease Security Documents) and (d) the proceeds of each of the foregoing, in each case, on a non-recourse basis (other than to the extent of remedies expressly provided under the CDF2 Loan Documents to which CHG is a party).
 
" CDF2 Loan Collateral Agent " means "Collateral Agent" as defined in the CDF2 Loan Agreement.
 
" CDF2 Loan Creditors " means (a) the Borrower, as holder of CDF2 Loan Obligations, the CDF2 Loan Collateral Agent and any other agents under the CDF2 Loan Documents and (b) the Senior Collateral Agent acting on behalf of the Borrower with respect to the exercise of remedies under the CDF2 Loan Documents, pursuant to the terms of the Senior Security Documents.
 
" CDF2 Loan Documents " means, collectively, the CDF2 Loan Agreement, the CDF2 Loan Security Documents, this Agreement and all agreements, notices, certificates and other documents executed in connection with the CDF2 Loan Agreement, in each case, on terms and conditions satisfactory to (a) prior to the Effective Date, the Bookrunners in their sole discretion, and (b) thereafter, the Senior Agent acting on behalf of the Senior Lenders and as the same may be amended, restated, supplemented, modified and/or Refinanced from time to time in accordance with the terms of the CDF2 Loan Documents, the Senior Credit Agreement and this Agreement.
 

 
5

 

" CDF2 Loan Obligations " means all "Obligations" as defined in the CDF2 Loan Agreement.  " CDF2 Loan Obligations " shall in any event include: (a) all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding  (and the effect of provisions such as Section 502(b)(2) of the Bankruptcy Code), accrue) on or after commencement of an Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant CDF2 Loan Document whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding, (b) any and all fees and expenses (including attorneys' and/or financial consultants' fees and expenses) incurred by the CDF2 Loan Creditors on or after the commencement of an Insolvency or Liquidation Proceeding, whether or not the claim for fees and expenses is allowed under Section 506(b) of the Bankruptcy Code or any other provision of the Bankruptcy Code or Bankruptcy Law as a claim in such Insolvency or Liquidation Proceeding, and (c) all obligations and liabilities of each Grantor under each CDF2 Loan Document to which it is a party which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due.
 
" CDF2 Loan Security Documents " means all agreements, documents, mortgages or instruments (including all assignments of leases and lease payments in favor of the Borrower) pursuant to which a Lien is granted (or purported to be granted) securing any CDF2 Loan Obligations or under which rights or remedies with respect to such Liens are governed, in each case, on terms and conditions satisfactory to (a) prior to the Effective Date, the Bookrunners in their sole discretion and (b) thereafter, the Senior Agent, acting on behalf of the Senior Lenders, and as the same may be amended, supplemented, restated, modified and/or Refinanced from time to time.
 
" CDF2 Non-Recourse Loans " means the "Term Loans" as defined in the CDF2 Loan Documents.
 
" CHG " has the meaning set forth in the preamble of this Agreement; provided that the term "CHG" shall include, where appropriate, the CHG Lease Collateral Agent.
 
" CHG Lease Agreement " has the meaning set forth in the recitals hereto.
 
" CHG Lease Collateral " means (a) in the case of Parent Holdings, all cash and other amounts maintained in the Distributor Lockbox Account to the extent constituting revenues and earnings derived from the Installed Digital Systems (including VPFs), on a non-recourse basis (other than to the extent of remedies expressly provided under the CHG Lease Facility Documents to which Parent Holdings is a party), (b) in the case of Holdings, (i) the Holdings Operating Account and the Equipment Purchase Account, in each case, together with all cash and other amounts maintained therein and (ii) Holdings' rights in and to each Digital Cinema Deployment Agreement (to the extent assigned to Holdings by Parent Holdings pursuant to the Sale and Contribution Agreement), each Exhibitor Agreement, each CHG Lease Facility Document (including without limitation Holdings' leasehold interest in each Installed Digital System leased thereunder), each Supply Agreement and the Management Services Agreement, (c) in the case of the Borrower, the Collection Account and all cash and other amounts maintained therein, on a non-recourse basis, and (d) the proceeds of each of the foregoing in each case, on a non-recourse basis (other than to the extent of remedies expressly provided under the CHG Lease Facility Documents to which Holdings is a party).
 

 
6

 

" CHG Lease Collateral Agent " means "Collateral Agent" as defined in the CHG Lease Agreement.
 
" CHG Lease Creditors " means, at any relevant time, the holders of CHG Lease Obligations at such time, including, without limitation, CHG and any other agents under the CHG Lease Agreement.
 
" CHG Lease Facility Documents " means, collectively, the CHG Lease Agreement, all sale and leaseback agreements, all schedules, supplemental term riders and confirmations thereunder, all updates to such schedules and confirmations, all irrevocable order of payments and all updates thereto, the CHG Lease Security Documents, all commitment letters by CHG to fund not less than $23,050,000 to Holdings (without giving effect to advances funded with the proceeds of the CDF2 Non-Recourse Loans), each purchase and sale agreement with respect to CHG's acquisition of rights in the Installed Digital Systems which are subject to the CHG Lease Agreement, this Agreement and all other agreements, certificates and other documents executed in connection with the CHG Lease Agreement, in each case, on terms and conditions satisfactory to (a) prior to the Effective Date, the Bookrunners in their sole discretion, and (b) thereafter, the Senior Agent acting on behalf of the Senior Lenders, and as the same may be amended, restated, supplemented, modified and/or Refinanced from time to time in accordance with the terms of the Senior Credit Agreement.
 
" CHG Lease Obligations " means all amounts payable to CHG under the CHG Lease Agreement, including Rent, Casualty Value, any purchase option or renewal option payments set forth in the CHG Lease Facility Documents, interest under the CHG Lease Facility Documents and all indemnity obligations owed to CHG under the CHG Lease Facility Documents, including with respect to property tax and use tax.  " CHG Lease Obligations " shall in any event include: (a) all lease payment obligations (including interest) accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding  (and the effect of provisions such as Section 502(b)(2) of the Bankruptcy Code), accrue) on or after commencement of an Insolvency or Liquidation Proceeding in accordance with the terms and rates specified in the relevant CHG Lease Facility Document whether or not the claim for such lease payment obligations is allowed as a claim in such Insolvency or Liquidation Proceeding, (b) any and all fees and expenses (including attorneys' and/or financial consultants' fees and expenses) incurred by the Junior Creditors on or after the commencement of an Insolvency or Liquidation Proceeding, whether or not the claim for fees and expenses is allowed under Section 506(b) of the Bankruptcy Code or any other provision of the Bankruptcy Code or Bankruptcy Law as a claim in such Insolvency or Liquidation Proceeding, and (c) all obligations and liabilities of each Grantor under each CHG Lease Facility Document to which it is a party which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due.
 
" CHG Lease Participant " means CHG and any permitted assignee of CHG under the CHG Lease Agreement.
 
" CHG Lease Security Documents " means agreements, documents, mortgages or instruments pursuant to which a Lien is granted (or purported to be granted) securing any CHG Lease Obligations or under which rights or remedies with respect to such Liens are governed, in each case, on terms and conditions satisfactory to (a) prior to the Effective Date, the
 

 
7

 

Bookrunners in their sole discretion and (b) thereafter, the Senior Agent, acting on behalf of the Senior Lenders and as the same may be amended, supplemented, restated, modified and/or Refinanced from time to time.
 
" CHG Sale Leaseback " means the sale and leaseback transaction between Holdings, as seller/lessee and CHG, as purchaser/lessor.
 
" Cinedigm " has the meaning set forth in the preamble of this Agreement.
 
" Cinedigm Installation Notes " has the meaning set forth in the recitals hereto, and includes any permitted assignment thereof by any payee thereof.
 
" Cinedigm Servicing Notes " has the meaning set forth in the recitals hereto, and includes any permitted assignment thereof by any payee thereof.
 
" Collateral " means all of the assets and property of any Grantor, whether real, personal or mixed, constituting Senior Collateral, CHG Lease Collateral and/or CDF2 Loan Collateral, as applicable.
 
" Collection Account " means the Cash Collateral Account identified as the "Collection Account" in Section 4.1(a) hereto and any replacement Cash Collateral Account with a depository bank that is, or whose holding company is, rated at least BBB- by S&P and at least Baa3 by Moody's reasonably requested by the Borrower and acceptable to the Senior Administrative Agent and the Senior Collateral Agent.
 
" Compliance Certificate " has the meaning set forth in the Senior Credit Agreement.
 
" Consenting Parties " has the meaning set forth in Section 3.1(a) hereto.
 
" Consolidated " means, with respect to any Person, the financial results of such Person and its Subsidiaries consolidated in accordance with GAAP.
 
" Consolidated Fixed Charge Coverage Ratio " has the meaning set forth in the Senior Credit Agreement.
 
" Consolidated Leverage Ratio " has the meaning set forth in the Senior Credit Agreement.
 
" Contract Change " has the meaning set forth in Section 3.4 hereto.
 
" Control Agreement " means, with respect to any lockbox, deposit account, securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance reasonably satisfactory to the Senior Collateral Agent, among the Senior Collateral Agent, the applicable Deposit Bank or other Person at which such account or contract is maintained or with which such entitlement or contract is carried and the Grantor maintaining such account or contract, effective to grant "control" (as defined under the applicable UCC) or, if required hereunder, exclusive "control" over such account to the Senior
 

 
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Collateral Agent or, in the case of (a) the Distributor Lockbox Account, the collateral agent provided in the Distributor Lockbox Collateral Agency Agreement, (b) the Holdings Operating Account and the Equipment Purchase Account, the Senior Collateral Agent as designee of CHG and the Borrower and (c) the Use Tax Account, the Senior Collateral Agent as designee of the Borrower.
 
" DDTL Escrow Account " has the meaning set forth in Section 4.1(e) hereto.
 
" DDTL Termination Date " means the first anniversary of the Effective Date.
 
" DDTL Termination Date Funding " has the meaning set forth in the Senior Credit Agreement.
 
" Debt Service Account " means the Cash Collateral Account identified as the "Debt Service Account" in Section 4.1(a) hereto and any replacement Cash Collateral Account with a depository bank that is, or whose holding company is, rated at least BBB- by S&P and at least Baa3 by Moody's reasonably requested by the Borrower and acceptable to the Senior Administrative Agent and the Senior Collateral Agent.
 
" Debt Service Reserve " means, as of any date of determination, a cash reserve held by the Borrower in an amount equal to the product of (a) $1,400 and (b) the number of Installed Digital Systems as of the applicable date of determination (giving effect to all dispositions (other than pursuant to the CHG Sale Leaseback) and acquisitions of Digital Systems as of such date).
 
" Debt Service Reserve Account " means the Cash Collateral Account identified as the "Debt Service Reserve Account" in Section 4.1(a) hereof and any replacement Cash Collateral Account with a depository bank that is, or whose holding company is, rated at least BBB- by S&P and at least Baa3 by Moody's reasonably requested by the Borrower and acceptable to the Senior Administrative Agent and the Senior Collateral Agent.
 
" Default " has the meaning set forth in the Specified Senior Facility.
 
" Defaulting Creditor " has the meaning set forth in Section 7.7(d) hereof.
 
" Deposit Bank " means SG or any other financial institution reasonably acceptable to the Senior Administrative Agent.
 
" Designated Cineplex " means a cineplex owned or operated by (a) Marcus Theatres Corporation or (b) any other Exhibitor mutually agreed between (i) the Borrower and (ii) prior to the Effective Date, the Bookrunners in their sole discretion and thereafter, the Senior Administrative Agent in its sole discretion.
 
" Designated Installed Digital System " means any Installed Digital System installed, or to be installed, at a Designated Cineplex.
 
" Digital Cinema Deployment Agreement " means a digital cinema deployment agreement in form and substance reasonably acceptable to the Senior Administrative Agent and
 

 
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related to the Phase 2 Rollout which agreement (a) is between (i) Parent Holdings or Parent Holdings and Cinedigm, with rights assigned to Holdings and then to the Borrower, in each case on terms and conditions and pursuant to documentation acceptable to the Senior Administrative Agent and (ii) a Distributor and (b) defines the terms governing VPFs to be made by such Distributor.
 
" Digital Systems " has the meaning set forth in the Senior Credit Agreement.
 
" Discharge of CHG Lease Obligations " means, except to the extent otherwise provided in Sections 7.6 hereof (and subject to Sections 3.3 , 8.6 and 9.5 hereof), (a) payment in full in cash of all lease payment obligations (including lease payment obligations accruing on or after the commencement of any Insolvency or Liquidation Proceeding at the rates and on the terms provided for in the respective CHG Lease Facility Document, whether or not such lease payment obligations would be allowed in any such Insolvency or Liquidation Proceeding) under the CHG Lease Facility Documents, (b) payment in full in cash of all other CHG Lease Obligations (other than contingent indemnity obligations not yet due and payable) that are due and payable or otherwise accrued and owing at or prior to the time such lease payment obligations are paid and (c) termination of all other commitments of the CHG Lease Creditors under the CHG Lease Facility Documents.
 
" Discharge of First Subordinated Notes " means, subject to Sections 8.6 and 9.5 hereof, (a) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding at the rate provided for in the respective First Subordinated Notes, whether or not such interest would be allowed in any such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding under the First Subordinated Notes and (b) payment in full in cash of all other obligations under the First Subordinated Notes (other than contingent indemnity obligations not yet due and payable) that are due and payable or otherwise accrued and owing at or prior to the time such principal, interest and premium are paid.
 
" Discharge of Second Subordinated Notes " means, subject to Sections 8.6 and 9.5 hereof, (a) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding at the rate provided for in the Second Subordinated Notes, whether or not such interest would be allowed in any such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding under the Second Subordinated Notes and (b) payment in full in cash of all other obligations under the Second Subordinated Notes (other than contingent indemnity obligations not yet due and payable) that are due and payable or otherwise accrued and owing at or prior to the time such principal, interest and premium are paid.
 
" Discharge of Senior Facilities Obligations " means, except to the extent otherwise provided in Section 7.6 hereof (and subject to Sections 8.6 and 9.5 hereof), (a) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding at the rate provided for in the respective Senior Facilities Document, whether or not such interest would be allowed in any such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding under the Senior Facilities Documents, (b) payment in full in cash of all other Senior Facilities Obligations (other
 

 
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than contingent indemnity obligations not yet due and payable) that are due and payable or otherwise accrued and owing at or prior to the time such principal, interest and premium are paid, (c) termination (without any prior demand for payment thereunder having been made or, if made, with such demand having been fully reimbursed in cash) or cash collateralization (in an amount and manner, and on terms, reasonably satisfactory to the Senior Collateral Agent) of all Secured Hedging Documents, (d) termination of all Senior Commitments of the Senior Creditors under the Senior Credit Documents and (e) solely as the term "Discharge of Senior Facilities Obligations" is used in Sections 3 , 4 and 8 (and in any defined term, but only as such defined term is used in Sections 3 , 4 and 8 ), payment in full in cash of the SG Advisory Fee Note.
 
" Discharge of Senior Obligations " means, except to the extent otherwise provided in Section 7.6 hereof (and subject to Sections 8.6 and 9.5 hereof), (a) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding at the rate provided for in the respective Senior Document, whether or not such interest would be allowed in any such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding under the Senior Documents, (b) payment in full in cash of all other Senior Obligations (other than contingent indemnity obligations not yet due and payable) that are due and payable or otherwise accrued and owing at or prior to the time such principal, interest and premium are paid, (c) termination (without any prior demand for payment thereunder having been made or, if made, with such demand having been fully reimbursed in cash) or cash collateralization (in an amount and manner, and on terms, reasonably satisfactory to the Senior Collateral Agent) of all Secured Hedging Documents, (d) termination of all other Senior Commitments of the Senior Creditors under the Senior Credit Documents and (e) solely as the term "Discharge of Senior Obligations" is used in Sections 3 , 4 and 8 (and in any defined term, but only as such defined term is used in Sections 3 , 4 and 8 ), payment in full in cash of the SG Advisory Fee Note.
 
" Distributor " means (a) Sony Pictures Entertainment, Inc., (b) Warner Bros Pictures, Inc., (c) Walt Disney Company, (d) Paramount Pictures Corporation, (e) Universal Pictures, Inc., (f) Twentieth Century Fox Film Corp., (g) Lions Gate Entertainment or (h) another Person in the business of distributing theatrical feature films or other traditional or non-traditional motion picture content for exhibition in a theater reasonably acceptable to Senior Administrative Agent.
 
" Distributor Lockbox Account " means the lockbox account identified as the "Distributor Lockbox Account" in Section 4.1(b) hereto and any replacement lockbox account with a depository bank that is, or whose holding company is, rated at least BBB+ by S&P and at least Baa1 by Moody's reasonably requested by the Borrower and acceptable to the Senior Administrative Agent and the Senior Collateral Agent.
 
" Distributor Lockbox Collateral Agency Agreement " means an agreement, in form and substance acceptable to the Senior Administrative Agent, appointing a financial institution acceptable to the Senior Administrative Agent, as collateral agent for the benefit of the parties entitled to receive payments from Parent Holdings, Cinedigm or any Affiliate thereof of amounts due from distributors under digital cinema deployment agreements related to the rollout by Cinedigm and its Subsidiaries of 10,000 digital systems via rollout vehicles (including the Phase 2 Rollout), and providing for the allocation of distribution of such amounts.
 

 
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" Dollars " and the sign " $ " each mean the lawful money of the United States.
 
" Effective Date " has the meaning set forth in the Senior Credit Agreement.
 
" Enforcement Action " means any action or proceeding (a) to foreclose on, directly collect on, take possession of or control of, or sell (judicially or non-judicially) any Shared Collateral or otherwise enforce a Lien on any Shared Collateral under any applicable agreement, document or instrument pertaining thereto (including, without limitation, by way of setoff, notification of account debtors, notification of depositary banks under deposit account control agreements or exercise of rights under landlord consents), (b) to receive a transfer of Shared Collateral in satisfaction of any obligations secured thereby (other than payments and prepayments in the ordinary course) or (c) otherwise to enforce any Lien or other right or remedy pertaining to the Shared Collateral at law or in equity pursuant to the terms of a Senior Security Document or a CHG Lease Security Document, as applicable.  For the avoidance of doubt, "Enforcement Action" shall not include payment of use tax obligations of CHG from funds in the Use Tax Account.
 
" Equipment Purchase Account " means the deposit account identified as the "Equipment Purchase Account" in Section 4.1(d) hereto and that is subject to a Control Agreement entered into on or before the Effective Date and any replacement deposit account with a depository bank that is, or whose holding company is, rated at least BBB- by S&P and at least Baa3 by Moody's reasonably requested by Holdings and acceptable to the Senior Agents.
 
" Excess Cash Flow " means, as of any Quarterly Application Date and following the application of funds pursuant to Section 4.5(a) through (k) hereof, the amount on deposit in the Collection Account.
 
" Excluded Senior Collateral " means, collectively, (a) the Senior Collateral described in the definition thereof in clauses (b)(i) , (c) to the extent relating to the Senior Collateral described in clause (b)(i) , and (d) except to the extent also constituting CHG Lease Collateral, and (b) the CDF2 Loan Collateral described in the definition thereof in clauses (a), (b) and (d) to the extent relating to the CDF2 Loan Collateral described in clauses (a) and (b) ; provided that if any of (1) the Digital Systems acquired by CHG from Holdings pursuant to the CHG Sale Leaseback or (2) the Use Tax Account is determined to be owned by Holdings and not CHG, then such Digital Systems or Use Tax Account, as the case may be, shall not constitute "Excluded Senior Collateral" for purposes of this definition.
 
" Exhibitor " means (a) an operator of cinema complexes operating Installed Digital Systems as of the Effective Date and (b) each operator subsequently approved by Cinedigm in accordance with its underwriting criteria in effect as of the Effective Date (or as updated in a manner acceptable to the Senior Administrative Agent).
 
" Exhibitor Agreement " has the meaning set forth in the Senior Credit Agreement.
 
" Exhibitor Approval Schedule " has the meaning set forth in the Senior Credit Agreement.
 
" Event of Default " has the meaning set forth in the Specified Senior Facility.
 

 
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" Fiscal Year " means each twelve month period ending on March 31.
 
" Fiscal Quarter " means each three (3) month fiscal period ending on March 31, June 30, September 30 or December 31.
 
" First Subordinated Notes " has the meaning set forth in the recitals hereto, and includes any permitted assignment by any payee thereof.
 
" GAAP " has the meaning set forth in the Senior Credit Agreement.
 
" Governmental Authority " means any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).
 
" Grantors " means Parent Holdings, Holdings, the Borrower and each Subsidiary of the Borrower that has executed and delivered, or may from time to time hereafter execute and deliver, a Senior Security Document, a CDF2 Loan Security Document or a CHG Lease Security Document.
 
" Guaranty and Security Agreement " has the meaning set forth in the Senior Credit Agreement.
 
" Hedging Agreement " has the meaning set forth in the Senior Credit Agreement.
 
" Holdings Operating Account " means the deposit account identified as the "Holdings Operating Account" in Section 4.1(c) hereto and that is subject to a Control Agreement entered into on or before the Effective Date and any replacement deposit account with a depository bank that is, or whose holding company is, rated at least BBB- by S&P and at least Baa3 by Moody's reasonably requested by Holdings and acceptable to the Senior Agents.
 
" Holdings Security Agreement " has the meaning set forth in the Senior Credit Agreement.
 
" Incentive Servicing Fee " has the meaning set forth in the Management Services Agreement.
 
" Indebtedness " has the meaning set forth in Senior Credit Agreement.
 
" Initial Payment Amount " has the meaning set forth in the Ballantyne Supply Agreement.
 
" In-Service Date " means, for each Installed Digital System, the date on which such Installed Digital System earns its first VPF payment (whether or not collected).
 

 
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" Insolvency or Liquidation Proceeding " means (a) any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to any Grantor, (b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with respect to a material portion of its respective assets, (c) any liquidation, dissolution, reorganization or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (d) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Grantor.
 
" Installation Management Fee " has the meaning set forth in the Senior Credit Agreement.
 
" Installed Digital Systems " has the meaning set forth in the Senior Credit Agreement.
 
" Interest Payment Date " has the meaning set forth in the Senior Credit Agreement.
 
" IP Escrow Agreement " means the Custom Master Beneficiary Escrow Service Agreement dated effective as of October 18, 2011 among the Senior Collateral Agent and the CHG Lease Collateral Agent, as beneficiaries, Access Digital Media, Inc., Holdings and Hollywood Software, Inc., as depositors, and Iron Mountain Intellectual Property Management, Inc., as the same may be amended, modified, restated, supplemented and/or replaced from time to time.
 
" Junior Creditors " means, at any relevant time, the holders of CHG Lease Obligations at such time, including, without limitation, CHG, any CHG Lease Participant and any agents under the CHG Lease Agreement.
 
" Lease Administration Fee " means a lease administration fee payable by Holdings, in accordance with Sections 4.4 and 4.5 hereto, to CHG in an amount equal to (a) for the period from the date of the initial Borrowing under the Senior Credit Agreement until the end of the Availability Period, $6,250 per month and (b) thereafter, $12,500 per month.
 
" Lien " means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest or other security arrangement and any other preference, priority or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.
 
" Management Report " has the meaning set forth in the Senior Credit Agreement.
 
" Management Services Agreement " means that certain Management Services Agreement dated as of October 18, 2011 among the Administrative Servicer, the Borrower and Holdings in form and substance satisfactory to the Senior Administrative Agent, under which the Administrative Servicer has agreed to provide certain management services and accounting, technical, operational, general and administrative services for Holdings and the Borrower, and
 

 
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any replacement agreements thereof in form and substance satisfactory to the Senior Administrative Agent entered into in order to cure a Default under Section 9.1(k) of the Senior Credit Agreement.
 
" Material Exhibitor Agreement " means (a) any Exhibitor Agreement providing for the deployment of more than 175 Installed Digital Systems to an Approved Exhibitor or (ii) Exhibitor Agreements that in the aggregate provide for the deployment of more than 175 Installed Digital Systems to one or more Approved Exhibitors.
 
" Material Exhibitor Agreement Default " means any of the following: (a) any Material Exhibitor Agreement shall cease to be valid, binding or enforceable in accordance with its terms (other than pursuant to a merger or acquisition of an Exhibitor party to such Material Exhibitor Agreement with or by another Exhibitor party to an Exhibitor Agreement) or shall be terminated and, within 90 days thereafter, the Borrower shall not have delivered to the Senior Administrative Agent written evidence of either (i) the reinstatement of such Material Exhibitor Agreement as a valid, binding and enforceable agreement or (ii) the redeployment of the Installed Digital Systems covered by such Material Exhibitor Agreement with Approved Exhibitors, (b) Holdings or its assignee shall be in breach of any Material Exhibitor Agreement and the effect of such breach is to permit the termination of such Material Exhibitor Agreement, and within 90 days of such breach, the Borrower has not delivered to the Senior Administrative Agent written evidence of cure of such breach by Holdings or waiver of such breach by the applicable Exhibitor, or (c) any Exhibitor shall be in breach of a Material Exhibitor Agreement, and within 90 days of such breach, the Borrower has not delivered to the Senior Administrative Agent written evidence of either (i) cure of such breach by such Exhibitor or (ii) the redeployment of the Installed Digital Systems covered by such Material Exhibitor Agreement with Approved Exhibitors; provided that each 90-day period described above shall be extended for up to an additional 90 days (or such longer period solely to the extent that resolution of the applicable Material Exhibitor Agreement Default is stayed due to ongoing litigation or similar proceedings) if (x) the applicable Material Exhibitor Agreement Default is reasonably capable of cure and (y) the Administrative Servicer is diligently pursuing such cure.
 
" Maturity Date " has the meaning set forth in the Senior Credit Agreement.
 
" Monthly Application Date " means the 10th   day of each February, March, May, June, August, September, November and December of each calendar year, or if that day is not a Business Day, the next Business Day thereafter.
 
" Moody's " means Moody's Investors Service, Inc.
 
" New Agent " has the meaning set forth in Section 7.6 hereof.
 
" Non-Participating Distributor " means any Distributor that has not signed a Digital Cinema Deployment Agreement.
 
" Parent Holdings " has the meaning set forth in the preamble of this Agreement.
 
" Payment Date " means the 15th day of each calendar month, or if such day is not a Business Day, the immediately succeeding Business Day.
 

 
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" Permitted Back-Up Services Expenses " means, as of the end of the most recent fiscal month, Back-Up Services Expenses in an amount (if positive and without duplication) up to a maximum disbursement for any trailing twelve-month period equal to (a) the maximum amount of Permitted Operating Expenses permitted to be paid or reimbursed after the Availability Period pursuant to Section 4.4(a) or 4.5(a) hereof during the twelve month period most recently ended (subject to a maximum disbursement of (i) for the Fiscal Year ending March 31, 2013, the product of (x) $200,000 and (y) a ratio, the numerator of which is the number of days elapsed since the end of the Availability Period and the denominator of which is 365, (ii) for the Fiscal Year ending March 31, 2014, $206,000 (as increased in each Fiscal Year pursuant to clause (iii) below, the " Opex Base Amount ") and (iii) for each Fiscal Year thereafter, 103% of the Opex Base Amount for the immediately preceding Fiscal Year, in each case as reduced by any amounts applied to the payment of property taxes pursuant to the following clause (b) for the applicable Fiscal Year) plus (b) Permitted Property Tax Expenses during the twelve month period most recently ended, minus (c) Permitted Operating Expenses actually paid or reimbursed pursuant to Section 4.4(a) or 4.5(a) hereof during the twelve month period most recently ended, minus (d) Permitted Property Tax Expenses actually paid or reimbursed pursuant to Section 4.4(a) or 4.5(a) hereof during the twelve month period most recently ended minus (e) Permitted Back-Up Services Expenses actually paid or reimbursed pursuant to Section 4.4(a)(D) or 4.5(a)(D) hereof during the twelve month period most recently ended.  Calculations of Permitted Back-Up Services Expenses made for any twelve month period ending on or prior to October 31, 2012 shall be annualized for the number of months elapsed in a manner satisfactory to the Senior Administrative Agent.
 
" Permitted Operating Expenses " means, with respect to the Borrower and its Subsidiaries and Holdings, (a) all legal and accounting expenses (but not any audit fees, audit expenses and related indemnities incurred under the Exhibitor Agreements other than fees and expenses arising from permitted audits of Exhibitors undertaken with the prior consent of the Specified Senior Agent), (b) all expenses relating to business interruption and general liability insurance policies and (c) expenses under the Senior Credit Agreement and the other Senior Credit Documents payable to the Senior Administrative Agent and under the CHG Lease Facility Documents payable to CHG, in each case, to the extent not otherwise provided for in Section 4.4 or 4.5 hereof (including all payments due and payable to the escrow agent under the IP Escrow Agreement).
 
" Permitted Property Tax Expenses " means, as of the end of the most recent fiscal month, property taxes with respect to Installed Digital Systems, subject to a maximum disbursement of (a) for any Fiscal Year ending on or before March 31, 2014, the product of (i) $170 (as increased in each Fiscal Year pursuant to clause (b) below, the " Property Tax Base Amount ") and (ii) the number of Installed Digital Systems and (b) for each Fiscal Year thereafter, the product of (i) 103% of the Property Tax Base Amount for the immediately preceding Fiscal Year and (ii) the number of Installed Digital Systems.
 
" Permitted Tax Expenses " means cash tax obligations of the Borrower and Holdings, including (a) so long as each of Holdings and the Borrower is classified as a partnership or disregarded entity for U.S. federal income tax purposes, U.S. federal, state and local income and franchise tax obligations attributable to the holders of the equity interests in Borrower and Holdings solely as a result of their ownership of the Borrower's and Holdings'
 

 
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Stock (but in an amount not to exceed the actual liability that would be incurred by the Borrower or Holdings on a standalone basis) and (b) Permitted Property Tax Expenses (provided that any property taxes in excess of the limit set forth in the definition of "Permitted Property Tax Expenses" may be paid from amounts otherwise permitted to be distributed for operating expenses under Section 4.4(a) or 4.5(a) hereof, as applicable), and (c) after the Discharge of Senior Facilities Obligations, use taxes to the extent deposited by the Borrower or Holdings into the Use Tax Account in accordance with Section 4.4(a) or 4.5(a) hereof, as applicable, in the amount (if any) then necessary to cause the amount on deposit therein to equal the next twelve months of estimated Applicable Tax Amount liability payable by CHG on account of Installed Digital Systems to be purchased by CHG pursuant to the CHG Sale Leaseback and leased to Holdings pursuant to the CHG Lease Facility Documents, as determined pursuant to Section 7.12 hereof.
 
" Person " means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority.
 
" Phase 2 Collateral Contracts " has the meaning set forth in Section 3.1(a) hereto.
 
" Phase 2 Rollout " has the meaning set forth in the Senior Credit Agreement.
 
" Pipeline Report " has the meaning set forth in the Senior Credit Agreement.
 
" Pledged Collateral " means any Shared Collateral (including without limitation the Holdings Operating Account and the contracts thereof) in the possession or control of the Senior Collateral Agent (or its agents or bailees), to the extent that possession or control thereof is taken to perfect a Lien thereon under the Uniform Commercial Code or other applicable local law.
 
" Post-Petition Financing " has the meaning set forth in Section 9.1(a) hereof.

" Prepaid Reserve " has the meaning set forth in the CHG Lease Agreement.

" Previously Deployed Systems " has the meaning set forth in the Senior Credit Agreement.

" Quarterly Application Date " means the 10th   day of each January, April, July and October of each calendar year, or if that day is not a Business Day, the next Business Day thereafter.
 
" Recovery " has the meaning set forth in Section 9.5 hereof.

" Refinance " means, in respect of any obligations, to refinance, extend, renew, defease, restructure, replace, refund or repay, or to issue other obligations, in exchange or replacement for, such obligations. " Refinanced " and " Refinancing " shall have correlative meanings.
 

 
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" Remedial Action " has the meaning set forth in Section 7.1(a)(i) hereof.
 
" Rent " has the meaning set forth in the CHG Lease Agreement.
 
" Required Exhibitor Contributions " has the meaning set forth in the Senior Credit Agreement.
 
" Required Senior Creditors " means "Required Lenders" under, and as defined in, the Senior Credit Agreement.
 
" Restricted Payment " has the meaning set forth in the Senior Credit Agreement.
 
" Sale and Contribution Agreement " means the Sale and Contribution Agreement dated as of October 18, 2011 among Parent Holdings, Holdings and the Borrower, including all schedules and exhibits thereto, in each case in form and substance satisfactory to the Senior Administrative Agent, pursuant to which (a) Parent Holdings shall assign to Holdings its rights in each Digital Cinema Deployment Agreement relating to the Phase 2 Rollout (including any VPFs generated by Parent Holdings with respect to Installed Digital Systems and collections, accounts receivable or other amounts owing to Parent Holdings and generated from VPFs or Installed Digital Systems) and (b) Holdings shall sell or contribute such rights, together with its rights in and to each Exhibitor Agreement and each Supply Agreement, to the Borrower.
 
" S&P " means Standard & Poor's Rating Services.
 
" Screen Turnover Ratio " means, as of any period of determination, (a)(i) the total number (not dollar amount) of screen turns for which VPFs have been received in such period with respect to Installed Digital Systems multiplied by (ii) a ratio the numerator of which is twelve (12) and the denominator of which is the number of full fiscal months in such period, divided by (b) the Average Screens in Service for such period.  For purposes of this definition, any fiscal month in which the Effective Date occurs shall be deemed to be a full fiscal month.
 
" Screens in Service " means, for any date of determination, the number of Installed Digital Systems with an In-Service Date on or prior to such date that are not subject to a "quality failure" (as such term is defined in the Digital Cinema Deployment Agreement applicable to such Installed Digital Systems) on such date.
 
" Second Subordinated Notes " has the meaning set forth in the recitals hereto, and includes any permitted assignment thereof by any payee thereof.
 
" Secured Creditors " means the Senior Creditors, the CDF2 Loan Creditors and the Junior Creditors.
 
" Secured Hedging Counterparty " means (a) the Senior Administrative Agent and (b) any other Person reasonably satisfactory to the Senior Administrative Agent that entered into a Hedging Agreement with the Borrower at a time when such Person was a Senior Lender or an Affiliate of a Senior Lender.
 

 
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" Secured Hedging Documents " has the meaning set forth in the Senior Credit Agreement.
 
" Secured Hedging Obligation " means any obligation of the Borrower to make payments to any Secured Hedging Counterparty under any Secured Hedging Documents to which such Secured Hedging Counterparty is a party.
 
" Security " means all Stock, Stock Equivalents, voting trust certificates, bonds, debentures, instruments and other evidence of Indebtedness, whether or not secured, convertible or subordinated, all certificates of interest, share or participation in, all certificates for the acquisition of, and all warrants, options and other rights to acquire, any Security.
 
" Security Documents " means, collectively, the Senior Security Documents, the CDF2 Loan Security Documents and the CHG Lease Security Documents.
 
" Senior Administrative Agent " has the meaning provided in the preamble of this Agreement.
 
" Senior Agents " means, collectively, the Senior Collateral Agent and the Senior Administrative Agent, and " Senior Agent " means either of them.
 
" Senior Collateral " means (a) in the case of Parent Holdings, (i) all Securities of Holdings and the proceeds thereof and (ii) all cash and other amounts maintained in the Distributor Lockbox Account to the extent constituting revenues and earnings derived from the Installed Digital Systems (including VPFs), in each case, on a non-recourse basis (other than to the extent of remedies expressly provided under the Senior Credit Documents to which Parent Holdings is a party), (b) in the case of Holdings, (i) all Securities of the Borrower and the proceeds thereof on a non-recourse basis (other than to the extent of remedies expressly provided under the Senior Credit Documents to which Holdings is a party) and (ii) subject to Section 10.11(c) of the Senior Credit Agreement, the Digital Systems (it being understood that such Digital Systems shall be sold, subject to the Senior Collateral Agent's Lien, to CHG pursuant to the CHG Sale Leaseback), (c) the proceeds of each of the foregoing and (d) in the case of any other Grantor, all property and interests in property and proceeds thereof now owned or hereafter acquired by such Grantor in or upon which a Lien is granted or purported to be granted pursuant to any Senior Credit Document, including without limitation (i) the Borrower's Cash Management Accounts and all cash and other amounts maintained therein, (ii) the Borrower's rights in and to the Use Tax Account, each CDF2 Loan Document and the Management Services Agreement, (iii) the Borrower's rights in and to each Digital Cinema Deployment Agreement, each Exhibitor Agreement, each CHG Lease Facility Document (including without limitation its rights in the Holdings Operating Account and the Equipment Purchase Account), each Supply Agreement and the Management Services Agreement (in each case to the extent assigned to the Borrower by CHG pursuant to the CDF2 Loan Security Documents) and (iv) the Borrower's rights in and to each Digital Cinema Deployment Agreement, each Exhibitor Agreement and each Supply Agreement (in each case to the extent contributed to the Borrower by Holdings pursuant to the Sale and Contribution Agreement).
 

 
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" Senior Collateral Agent " has the meaning provided in the preamble of this Agreement.
 
" Senior Commitments " means the " Commitments " under, and as defined in, the Senior Credit Agreement.
 
" Senior Credit Agreement " has the meaning set forth in the recitals hereto.
 
" Senior Credit Documents " means, collectively, the Senior Credit Agreement, the other Loan Documents (as defined in the Senior Credit Agreement) and any other document or instrument executed at any time in connection with any Senior Obligation (including any intercreditor or joinder agreement among holders of Senior Obligations but excluding Secured Hedging Documents), to the extent such are effective at the relevant time, as each may be amended, modified, restated, supplemented, replaced and/or Refinanced from time to time.
 
" Senior Creditors " means, at any relevant time, the holders of Senior Obligations at such time, including, without limitation, the Senior Lenders, the Secured Hedging Counterparties, the Senior Indemnitees, the Senior Agents, the Bookrunners and the other agents and arrangers under the Senior Credit Agreement.
 
" Senior Documents " means and includes the Senior Credit Documents and the Secured Hedging Documents.
 
" Senior Facilities " means the Senior Credit Agreement and the CDF2 Loan Agreement.
 
" Senior Facilities Collateral " means the Senior Collateral and the CDF2 Loan Collateral.
 
" Senior Facilities Creditors " means the Senior Creditors and the CDF2 Loan Creditors.
 
" Senior Facilities Documents " means, collectively, the Senior Documents and the CDF2 Loan Documents.
 
" Senior Facilities Obligations " means the Senior Obligations and the CDF2 Loan Obligations.
 
" Senior Indemnitee " means an "Indemnitee" under, and as defined in, the Senior Credit Agreement.
 
" Senior Lenders " means the "Lenders" under, and as defined in, the Senior Credit Agreement.
 
" Senior Loan " means a "Loan" under, and as defined in, the Senior Credit Agreement.
 

 
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" Senior Obligations " means all "Obligations" as defined in the Senior Credit Agreement; provided that the term "Senior Obligations" shall include the SG Advisory Fee Note only where the term "Senior Obligations" is used in Sections 3 , 4 , and 8 (and in any defined term, but only as such defined term is used in Sections 3 , 4 and 8 ).  "Senior Obligations" shall in any event include: (a) all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding (and the effect of provisions such as Section 502(b)(2) of the Bankruptcy Code), accrue) on or after the commencement of an Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant Senior Document, whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding, (b) any and all fees and expenses (including attorneys' and/or financial consultants' fees and expenses) incurred by the Senior Agents and the other Senior Creditors on or after the commencement of an Insolvency or Liquidation Proceeding, whether or not the claim for fees and expenses is allowed under Section 506(b) of the Bankruptcy Code or any other provision of the Bankruptcy Code or Bankruptcy Law as a claim in such Insolvency or Liquidation Proceeding, and (c) all obligations and liabilities of each Grantor under each Senior Document to which it is a party which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due.
 
" Senior Revolving Loan " means a "Revolving Loan" under, and as defined in, the Senior Credit Agreement.
 
" Senior Revolving Lenders " means the "Revolving Loan Lenders" under, and as defined in, the Senior Credit Agreement.
 
" Senior Security Documents " means the Guaranty and Security Agreement, the Holdings Security Agreement, this Agreement, the Distributor Lockbox Collateral Agency Agreement, the Pledge Agreements (as defined in the Senior Credit Agreement), the Mortgages (as defined in the Senior Credit Agreement), the Control Agreements, the IP Escrow Agreement and any other agreement, document, mortgage or instrument pursuant to which a Lien is granted (or purported to be granted) securing any Senior Obligations or under which rights or remedies with respect to such Liens are governed, as the same may be amended, supplemented, restated, modified and/or Refinanced from time to time.
 
" Senior Term Loans " means the "Term Loans" under, and as defined in, the Senior Credit Agreement.
 
" Servicer Performance Default " means any of the following: (a) with respect to any Application Date occurring on or after the last day of the Availability Period, any failure by Holdings and/or the Borrower to have deployed at least 1200 screens as of the last day of the Availability Period or (b) with respect to any Application Date, (i) any failure by Holdings to maintain a Screen Turnover Ratio of at least 12.75 for the twelve trailing month period ended as of such Application Date, or, if shorter, the period commencing on the Effective Date and ending on such Application Date, (ii) any Material Exhibitor Agreement Default has occurred and is continuing as of such Application Date or (iii) any Event of Default has occurred and is continuing as of such Application Date.
 

 
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" Servicing Fee " has the meaning set forth in the Management Services Agreement.
 
" SG " has the meaning set forth in the preamble of this Agreement.
 
" SG Advisory Fee Note " means that certain promissory note, dated as of October 18, 2011, executed by the Borrower in favor of SG, and any additional promissory notes executed by the Borrower in favor of SG, the proceeds of which shall be used to pay the SGAS Advisory Fee.
 
" SGAS " means SG Americas Securities, LLC.
 
" SGAS Advisory Fee " means that certain "Capital Structure Advisory Fee" payable to SGAS for advisory services described in Schedule I of the Advisory Engagement Letter.
 
" Shared Collatera l" means (a) in the case of Parent Holdings, (i) all Securities of Holdings and the proceeds thereof and (ii) all cash and other amounts maintained in the Distributor Lockbox Account to the extent constituting revenues and earnings derived from the Installed Digital Systems (including VPFs), (b) in the case of Holdings, the Holdings Operating Account and the Equipment Purchase Account, in each case together with all cash and other amounts maintained therein, (c) in the case of the Borrower, the Collection Account and all cash and other amounts maintained therein, and (d) Holdings' and the Borrower's rights in and to each Digital Cinema Deployment Agreement, each Exhibitor Agreement, each CHG Lease Facility Document, each Supply Agreement and the Management Services Agreement.
 
" Specified Repayment Date " shall mean (a) with respect to the Junior Creditors, the first date upon which the Discharge of Senior Facilities Obligations has occurred, (b) with respect to the holders of the First Subordinated Notes, the first date upon which each of the Discharge of Senior Facilities Obligations and the Discharge of CHG Lease Obligations has occurred, and (c) with respect to the holders of the Second Subordinated Notes, the first date upon which each of the Discharge of Senior Facilities Obligations, the Discharge of CHG Lease Obligations and the Discharge of First Subordinated Notes has occurred.
 
" Specified Senior Agent " shall mean (a) until the Discharge of Senior Obligations has occurred, the Senior Administrative Agent or the Senior Collateral Agent, as applicable, (b) thereafter, until the Discharge of CHG Lease Obligations has occurred, CHG, (c) thereafter, until the Discharge of First Subordinated Notes has occurred, either (i) collectively, the holders of a majority in principal amount outstanding of the First Subordinated Notes, or (ii) such Person as has been appointed by the holders of the First Subordinated Notes (provided that if SG is so appointed to act as Specified Senior Agent for purposes of administering the provisions of Section 4 of this Agreement, SG will take directions with respect thereto from a single Person only), and (d) thereafter, either (i) the holders of a majority in principal amount outstanding of the Second Subordinated Notes or (ii) such Person as has been appointed by the holders of the Second Subordinated Notes (provided that if SG is so appointed to act as Specified Senior Agent for purposes of administering the provisions of Section 4 of this Agreement, SG will take directions with respect thereto from a single Person only).
 

 
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" Specified Senior Creditors " shall mean (a) until the Discharge of Senior Obligations has occurred, the Senior Agents and the Senior Lenders, (b) thereafter, until the Discharge of CHG Lease Obligations has occurred, the Junior Creditors, (c) thereafter, until the Discharge of First Subordinated Notes has occurred, the holders of the First Subordinated Notes, and (d) thereafter, the holders of the Second Subordinated Notes.
 
" Specified Senior Debt " shall mean the following: (a) as among the Senior Facilities Obligations, " Specified Senior Debt " shall mean the Senior Obligations, (b) as among the Senior Facilities Obligations and the CHG Lease Obligations, " Specified Senior Debt " shall mean the Senior Facilities Obligations, (c) as among the Senior Facilities Obligations, the CHG Lease Obligations and the First Subordinated Notes, " Specified Senior Debt " shall mean the Senior Facilities Obligations and the CHG Lease Obligations, and (d) as among the Senior Facilities Obligations, the CHG Lease Obligations, the First Subordinated Notes and the Second Subordinated Notes, " Specified Senior Debt " shall mean the Senior Facilities Obligations, the CHG Lease Obligations and the First Subordinated Notes.
 
" Specified Senior Facility " shall mean (a) until the Discharge of Senior Obligations has occurred, the Senior Credit Agreement, (b) thereafter, until the Discharge of CHG Lease Obligations has occurred, the CHG Lease Agreement, (c) thereafter, until the Discharge of First Subordinated Notes has occurred, the First Subordinated Notes, and (d) thereafter, the Second Subordinated Notes.
 
" Specified Senior Obligations " shall mean (a) until the Discharge of Senior Obligations has occurred, the Senior Obligations, (b) thereafter, until the Discharge of CHG Lease Obligations has occurred, Rent, Casualty Value, any purchase option or renewal option payments and interest under the CHG Lease Agreement, (c) thereafter, until the Discharge of First Subordinated Notes has occurred, the First Subordinated Notes, and (d) thereafter, the Second Subordinated Notes.
 
" Specified Subordinated Creditors " shall mean the following: (a) as among the Senior Creditors, the CDF2 Loan Creditors, the Junior Creditors, the holders of the First Subordinated Notes and the holders of the Second Subordinated Notes, " Specified Subordinated Creditors " shall mean the CDF2 Loan Creditors, the Junior Creditors, the holders of the First Subordinated Notes and the holders of the Second Subordinated Notes, (b) as among the CDF2 Loan Creditors, the Junior Creditors, the holders of the First Subordinated Notes and the holders of the Second Subordinated Notes, " Specified Subordinated Creditors " shall mean the Junior Creditors, the holders of the First Subordinated Notes and the holders of the Second Subordinated Notes, (c) as among the Junior Creditors, the holders of the First Subordinated Notes and the holders of the Second Subordinated Notes, " Specified Subordinated Creditors " shall mean the holders of the First Subordinated Notes and the holders of the Second Subordinated Notes, and (d) as among the holders of the First Subordinated Notes and the holders of the Second Subordinated Notes, " Specified Subordinated Creditors " shall mean the holders of the Second Subordinated Notes.
 
" Specified Subordinated Debt " shall mean the following: (a) as among the Senior Obligations, the CDF2 Loan Obligations, the CHG Lease Obligations, the First Subordinated Notes and the Second Subordinated Notes, " Specified Subordinated Debt " shall mean the CDF2
 

 
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Loan Obligations, the CHG Lease Obligations, the First Subordinated Notes and the Second Subordinated Notes, (b) as among the CDF2 Loan Obligations, the CHG Lease Obligations, the First Subordinated Notes and the Second Subordinated Notes, " Specified Subordinated Debt " shall mean the CHG Lease Obligations, the First Subordinated Notes and the Second Subordinated Notes, (c) as among the CHG Lease Obligations, the First Subordinated Notes and the Second Subordinated Notes, " Specified Subordinated Debt " shall mean the First Subordinated Notes and the Second Subordinated Notes, and (d) as among the First Subordinated Notes and the Second Subordinated Notes, " Specified Subordinated Debt " shall mean the Second Subordinated Notes.
 
" Standstill Notice " means a written notice from CHG to the Senior Collateral Agent identified by its terms as a "Standstill Notice" for purposes of this Agreement and stating that an event of default has occurred and is continuing under the CHG Lease Facility Documents and that, as a consequence thereof, CHG has declared all of the CHG Lease Obligations to be immediately due and payable.
 
" Standstill Period " means the period of 180 days commencing on the date on which the Senior Collateral Agent receives the applicable Standstill Notice.
 
" Stock " means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.
 
" Stock Equivalents " means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable.
 
" Subordinated Notes " has the meaning set forth in the recitals hereto.
 
" Subsidiary " means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or other entity, the management of which is, directly or indirectly, controlled by, or of which an aggregate of more than 50% of the outstanding Voting Stock is, at the time, owned or controlled directly or indirectly by, such Person or one or more Subsidiaries of such Person.
 
" Supply Agreement " has the meaning set forth in the Senior Credit Agreement.
 
" Target Minimum Cash Amount " means an amount equal to (i) from the Effective Date through the DDTL Termination Date, a cumulative amount equal to $500,000 plus, on each monthly anniversary of the Effective Date during such period, $125,000, and (ii) after the DDTL Termination Date, $2,000,000.
 
" Uniform Commercial Code " or " UCC " means the Uniform Commercial Code as from time to time in effect in any relevant jurisdiction.
 
" Use Tax Account " has the meaning set forth in Section 4.1(f) hereto.
 

 
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" Variable Rent " has the meaning set forth in the CHG Lease Agreement.
 
" Vendor Note " has the meaning set forth in the recitals hereto, and includes any permitted assignment thereof by any payee thereof.
 
" Voting Stock " means Stock of any Person having ordinary power to vote in the election of members of the board of directors, managers, trustees or other controlling Persons, of such Person (irrespective of whether, at the time, Stock of any other class or classes of such entity shall have or might have voting power by reason of the occurrence of any contingency).
 
" VPF " means the virtual print fee payment owing to the Borrower (as successor by contribution from Holdings (as assignee of Parent Holdings)) from (a) a Distributor pursuant to a Digital Cinema Deployment Agreement or (b) a Non-Participating Distributor.
 
1.2     Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented, restated or otherwise modified unless the context requires otherwise, (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein", "hereof' and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Exhibits or Sections shall be construed to refer to Exhibits or Sections of this Agreement and any references to a clause shall, unless otherwise identified, refer to the appropriate clause within the same Section in which such reference occurs, (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (f) terms defined in the UCC but not otherwise defined herein shall have the same meanings herein as are assigned thereto in the UCC and (g) a reference to any law means such law as amended, modified, codified, replaced or re-enacted, in whole or in part, and in effect on the date hereof, including rules, regulations, enforcement procedures and any interpretations promulgated thereunder.
 
SECTION 2 .   Priority of Liens .
 
2.1     Separate Classification, Subordination. Etc . (a) The parties hereto acknowledge and agree that it is their intent that (i) the Senior Obligations (and the security therefor), the CDF2 Loan Obligations (and the security therefor) and the CHG Lease Obligations (and the security therefor) each constitute separate and distinct classes (and separate and distinct claims) and (ii) the grant of Liens securing payment and performance of the Senior Obligations, the grant of Liens securing payment and performance of the CDF2 Loan Obligations and the grant of Liens securing payment and performance of the CHG Lease Obligations create three separate and distinct Liens with each such Lien securing only, as applicable, the Senior Obligations, the CDF2 Loan Obligations or the CHG Lease Obligations.
 

 
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(b)     perfection of any Liens securing the CHG Lease Obligations granted on the Shared Collateral or of any Liens securing the Senior Facilities Obligations granted on the Shared Collateral and notwithstanding any provision of the UCC, any other applicable law, this Agreement, the Senior Documents, the CDF2 Loan Documents or the CHG Lease Facility Documents to the contrary, or any other circumstance whatsoever (including any non-perfection of any Lien purporting to secure the Senior Facilities Obligations and/or the CHG Lease Obligations), CHG, on behalf of itself and each Junior Creditor, and each Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents), hereby agrees that: (i) any Lien on the Shared Collateral securing any Senior Facilities Obligations now or hereafter held by or on behalf of the Senior Collateral Agent or any Senior Facilities Creditor or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on the Shared Collateral securing any of the CHG Lease Obligations; (ii) any Lien on the Shared Collateral now or hereafter held by or on behalf of CHG, any Junior Creditor or any agent or trustee therefor regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Shared Collateral securing any Senior Facilities Obligations; and (iii) it will not take or cause to be taken any action the purpose or effect of which is, or could be, to make any Lien on the Shared Collateral securing the CHG Lease Obligations pari passu with, or to give CHG or any Junior Creditor any preference or priority relative to, any Lien on the Shared Collateral securing the Senior Facilities Obligations.  All Liens on the Shared Collateral securing any Senior Facilities Obligations shall be and remain senior in all respects and prior to all Liens on the Shared Collateral securing any CHG Lease Obligations for all purposes, whether or not such Liens securing any Senior Facilities Obligations are subordinated to any Lien securing any other obligation of the Borrower, any other Grantor or any other Person.  CHG for itself and on behalf of the Junior Creditors expressly agrees that any Lien purported to be granted on any Shared Collateral as security for the Senior Facilities Obligations shall be and remain senior in all respects and prior to all Liens on the Shared Collateral securing any CHG Lease Obligations for all purposes regardless of whether the Lien purported to be granted is found to be improperly granted, improperly perfected, a fraudulent conveyance or legally or otherwise deficient in any manner.  For the avoidance of doubt, the parties hereto agree that any Lien on the CDF2 Loan Collateral securing any Senior Obligations shall be senior in all respects and prior to any Lien on the CDF2 Loan Collateral securing any of the CDF2 Loan Obligations and shall remain senior in all respects and prior to all Liens on the CDF2 Loan Collateral securing any CDF2 Loan Obligations for all purposes regardless of whether the Lien purported to be granted is found to be improperly granted, improperly perfected, a fraudulent conveyance or legally or otherwise deficient in any manner.
 
2.2     Prohibition on Contesting Liens . Each of CHG, for itself and on behalf of each Junior Creditor, and the Senior Collateral Agent, for itself and on behalf of each Senior Facilities Creditor, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), (i) the validity or enforceability of any Security Document or any Senior Facilities Obligation or CHG Lease Obligation, (ii) the validity, perfection, priority or enforceability of the Liens, mortgages, assignments and security interests granted pursuant to the Security Documents with respect to the Senior Facilities Obligations or the CHG Lease Obligations or (iii) the relative rights and duties of the holders of the Senior Facilities Obligations and the CHG Lease
 

 
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Obligations granted and/or established in this Agreement or any other Security Document with respect to such Liens, mortgages, assignments, and security interests; provided that nothing in this Agreement shall be construed to prevent or impair the rights of the Senior Collateral Agent or any Senior Facilities Creditor to enforce this Agreement, including the priority of the Liens securing the Senior Facilities Obligations as provided in Section 2.1 hereof.
 
2.3     No New Liens . (a) So long as the Discharge of Senior Obligations has not occurred, the parties hereto agree that no Grantor shall grant or permit any additional Liens, or take any action to perfect any additional Liens, on any asset or property to secure any CHG Lease Obligation unless it has also granted or caused to be granted or contemporaneously grants or causes to be granted a Lien on such asset or property to secure the Senior Facilities Obligations and has taken all actions required to perfect such Liens.  To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the Senior Collateral Agent and/or the other Senior Facilities Creditors, CHG, on behalf of itself and the Junior Creditors, and each other Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents), agrees that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.3 shall be subject to Section 6.2 hereof.
 
(b)     So long as the Discharge of CHG Lease Obligations has not occurred, the parties hereto agree that no Grantor shall grant or permit any additional Liens, or take any action to perfect any additional Liens, on any asset or property to secure any Senior Facilities Obligation unless it has also granted or caused to be granted or contemporaneously grants or causes to be granted a Lien on such asset or property (other than the Excluded Senior Collateral) to secure the CHG Lease Obligations and has taken all actions required to perfect such Liens.
 
2.4     Similar Liens and Agreements . The parties hereto agree that it is their intention that (i) the CHG Lease Collateral shall not be more expansive than the Senior Facilities Collateral and (ii) other than the Excluded Senior Collateral, the Senior Facilities Collateral shall not be more expansive than the CHG Lease Collateral.  In furtherance of the foregoing and of Section 11.9 hereof, the Senior Collateral Agent, for itself and on behalf of the Senior Facilities Creditors, and CHG, on behalf of itself and the other Junior Creditors, agree, subject to the other provisions of this Agreement:
 
(i)     upon the reasonable request by CHG or the Senior Collateral Agent, to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the Shared Collateral and the steps taken to perfect the Liens thereon and the identity of the respective parties obligated under the Senior Facilities Documents and the CHG Lease Facility Documents, respectively; and
 
(ii)     that the CHG Lease Security Documents creating Liens on the Shared Collateral shall be in all material respects the same forms of documents as the respective Senior Facilities Documents creating Liens on the Shared Collateral other than (A) with respect to the description of the Collateral and (B) with respect to the priority nature of the Liens created thereunder in such Collateral.
 

 
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SECTION 3 .   Consent and Agreement .
 
3.1     Consent to Assignment and Contribution .  (a)  Holdings hereby acknowledges and consents to the collateral assignment by CHG to the Borrower pursuant to the CDF2 Loan Security Documents of Holdings' rights in and to the following agreements:  (i) all Digital Cinema Deployment Agreements, (ii) all Exhibitor Agreements, (iii) the Management Services Agreement, (iv) all Supply Agreements ((i), (ii), (iii) and (iv), collectively, the " Phase 2 Collateral Contracts ") and (v) all CHG Lease Facility Documents.  Each of Holdings and CHG, on behalf of itself and the other Junior Creditors, and each other Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents) (collectively, the " Consenting Parties "), hereby acknowledges and consents to the collateral assignment by the Borrower to the Senior Collateral Agent pursuant to the Guaranty and Security Agreement of any rights of such Consenting Party in and to the Phase 2 Collateral Contracts and the CHG Lease Facility Documents.  CHG, on behalf of itself and the other Junior Creditors, and each Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents), hereby acknowledges and consents to (x) the collateral assignment by the Borrower to the Senior Collateral Agent pursuant to the Guaranty and Security Agreement of all rights of CHG and the Junior Creditors in and to the CDF2 Loan Documents and (y) the contribution (subject to the Lien granted by Holdings pursuant to the CHG Lease Security Documents, which Lien is made junior in priority to the Lien granted by the Borrower to the Senior Collateral Agent pursuant to the Guaranty and Security Agreement) by Holdings to the Borrower pursuant to the Sale and Contribution Agreement of Holdings' rights in and to the Phase 2 Collateral Contracts (other than the Management Services Agreement).
 
(b)     Without limiting the foregoing, and subject to Section 3.2 hereof, the consent described in Section 3.1(a) above specifically includes consent to the permitted assignment of the Phase 2 Collateral Contracts, the CHG Lease Facility Documents and the CDF2 Loan Documents to (i) the Senior Collateral Agent, the Senior Lenders or their Affiliates, or any Person owned by any of the foregoing formed for the purpose of holding Collateral, and (ii) any designees, successors, or assigns of any of the foregoing listed in clause (i) .
 
(c)     The Consenting Parties acknowledge and consent that the Phase 2 Collateral Contracts, the CHG Lease Facility Documents and the CDF2 Loan Documents and all rights thereunder shall constitute Senior Collateral, which secure the Senior Obligations.  Each of CHG and the Borrower agrees that it shall not permit any amendment to, modification of, waiver of any term of, termination of or foreclosure upon any CDF2 Loan Document to which it is a party (other than immaterial amendments, modifications or waivers that do not affect the obligations or rights of any party in any material respect) without the prior written consent of the Senior Administrative Agent.
 
3.2     Rights Upon Event of Default Under Phase 2 Collateral Contracts .
 
(a)     Transfer of Phase 2 Collateral Contracts .  In the event of the transfer of any Phase 2 Collateral Contract, any CHG Lease Facility Document or any CDF2 Loan Document related to the exercise of remedies under the Guaranty and Security Agreement, whether by judicial proceeding, non-judicial foreclosure, conveyance in lieu thereof, or any other remedial right, the Senior Collateral Agent shall promptly give notice to the Consenting Parties
 

 
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of the transferee of any Phase 2 Collateral Contract, any CHG Lease Facility Document or any CDF2 Loan Document so affected, and the Consenting Parties agree that upon any transfer to and assumption of such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document by such transferee, the relevant Consenting Parties shall accept such transferee as the successor to the assignor under such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document and make any technical modifications to such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document reasonably necessary to reflect the transfer and permit such transferee to obtain the benefits of such assigned agreement; provided that such transferee shall, subject to applicable law, take such assignment subject to any defense under such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document allocable to the period prior to the date of the transfer, including any obligation to perform any covenant, or any defense related to any breach, default, or setoff with respect to any act, omission, event, or condition allocable to the period prior to the date of the transfer.  Further, in the event that the Senior Collateral Agent is the transferee, the Senior Collateral Agent may in turn transfer such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document on the same terms as those permitted under this paragraph for transfers related to the exercise of remedies, and following the assumption of such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document by the transferee from the Senior Collateral Agent, the Senior Collateral Agent shall be released from any obligations under and any defenses under such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document allocable to the period after the date of the transfer.
 
(b)     New Agreements .  In the event that any Phase 2 Collateral Contract, any CHG Lease Facility Document or any CDF2 Loan Document is terminated or rejected in connection with any bankruptcy or otherwise, at the request of the Senior Collateral Agent, to the extent permitted by applicable law, the Consenting Parties will execute and deliver to the Senior Collateral Agent or its designee a replacement agreement for the balance of the remaining term under such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document containing the same terms and conditions as such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document with any technical modifications to such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document reasonably necessary to reflect such replacement agreement and permit the Senior Collateral Agent or its designee to obtain the benefits of such replacement agreement; provided that no Consenting Party shall be liable for breach of this Section 3.2(b) to the extent such breach is due to the failure of any counterparty (or any such counterparty's successors or assigns) to such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document to execute such replacement agreement; provided further that from and after the date of the execution of such replacement agreement, the Senior Collateral Agent or its designee (i) shall have obligations only under such replacement agreement with respect to events occurring from and after such date and (ii) shall have no obligations and shall not be subject to any defense under the Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document that is replaced by such replacement agreement for events occurring from and after the date of such replacement agreement.  Further, if such replacement agreement is entered into by the Senior Collateral Agent, the Senior Collateral Agent may in turn transfer such replacement agreement on the same terms as those permitted under Section 3.2(a) above for transfers of Phase 2 Collateral Contract, CHG Lease Facility Document and CDF2 Loan Documents related to the exercise of remedies, and following the assumption of such replacement agreement by the transferee from the Senior
 

 
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Collateral Agent, the Senior Collateral Agent shall be released from any obligations under and defenses under such replacement agreement allocable to the period after the date of the transfer.  References in this Agreement to a "Phase 2 Collateral Contract," "CHG Lease Facility Document" or "CDF2 Loan Document" shall be deemed also to refer to any replacement agreement for such Phase 2 Collateral Contract, CHG Lease Facility Document or CDF2 Loan Document, respectively.
 
(c)     Borrower Authorization .  Without limitation of any provision contained in the Guaranty and Security Agreement, if an Event of Default under the Senior Credit Agreement has occurred and is continuing, the Borrower hereby authorizes each Senior Agent, on behalf of itself and the other Senior Creditors, to exercise all of the Borrower's rights as a creditor and as a secured creditor under the CDF2 Loan Documents, including with respect to the collateral assignments by CHG to the Borrower of CHG's and Holdings' rights in and to the Phase 2 Collateral Contracts and the CHG Lease Facility Documents, and the Borrower agrees to take (or refrain from taking) all lawful actions under, and subject to the terms of, the CDF2 Loan Documents as any Senior Agent may direct.
 
(d)     No Obligations of Senior Collateral Agent .  The Senior Collateral Agent shall have no obligation nor liability under any Phase 2 Collateral Contract, any CHG Lease Facility Document or any CDF2 Loan Document by reason of, or arising out of, this Agreement, or be obligated to perform any of the obligations or duties of the assignor under any Phase 2 Collateral Contract, any CHG Lease Facility Document or any CDF2 Loan Document by reason of the Senior Collateral Agent's exercise of any rights under this Section 3.2 .
 
3.3     Payment Direction .  (a)  Until Discharge of Senior Facilities Obligations has occurred, CHG, on behalf of itself and the other Junior Creditors, hereby irrevocably directs Holdings to pay to the Borrower any and all payments due and owing to CHG under the CHG Lease Facility Documents other than indemnification payments as to third party tort claims and other than payments under Sections 4.4(b) , 4.4(f) , 4.5(b) and 4.5(f) hereof, and for the avoidance of doubt CHG assigns to the Borrower and the Borrower assigns to the Senior Administrative Agent the right to receive such payments; provided that the amount of any indemnification payments (including, inter alia , with respect to property tax, use tax or loss of tax benefits) due and owing to CHG under the CHG Lease Facility Documents that are paid to the Borrower and assigned to the Senior Administrative Agent pursuant to this Section 3.3(a) shall be added to the Rent Balance (as defined in the CHG Lease Agreement).  Holdings hereby irrevocably agrees to comply with the foregoing payment instructions from CHG.
 
(b)     CHG, on behalf of itself and the other Junior Creditors, acknowledges and agrees that payments made by Holdings to the Borrower in accordance with Section 3.3(a) above shall satisfy Holdings' payment obligations owed to CHG and the other Junior Creditors under the CHG Lease Facility Documents during the period that such payments are made by Holdings to the Borrower.  Each of the Borrower, CHG, on behalf of itself and the other Junior Creditors, and the Senior Agent hereby acknowledges and agrees that payments made by Holdings to Borrower in accordance with Section 3.3(a) and subsequently by the Borrower to the Senior Administrative Agent in accordance with the Senior Credit Agreement, shall also constitute payment by CHG of its corresponding payment obligations under the CDF2 Loan Documents, and that, notwithstanding Section 8 hereof, upon the Discharge of Senior Obligations (solely to
 

 
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the extent such definition relates to the Senior Credit Documents), the Discharge of Senior Facilities Obligations shall also be deemed to have occurred.  CHG, on behalf of itself and the other Junior Creditors, agrees not to make any actual payments of cash or property to the Borrower under to the CDF2 Loan Documents without the prior written consent of the Senior Administrative Agent.
 
(c)     Each of CHG, on behalf of itself and the other Junior Creditors, and the Borrower hereby acknowledges and agrees that any prepayment (whether voluntary or mandatory) of the Senior Term Loans pursuant to Sections 4.4(l) or 4.5(l) hereof shall also constitute prepayment by CHG of its corresponding obligations owed to the Borrower under the CDF2 Loan Documents and shall constitute payment by Holdings of its obligations owed to CHG and the other Junior Creditors under the CHG Lease Facility Documents with respect to Variable Rent.  Each of CHG, on behalf of itself and the other Junior Creditors, and the Borrower hereby acknowledges and agrees that any prepayment of Senior Term Loans pursuant to Section 2.5(c)(ii) or (iii) of the Senior Credit Agreement shall also constitute a prepayment by CHG of its corresponding obligations owed to the Borrower under the CDF2 Loan Documents and shall constitute a corresponding payment by Holdings of its obligations owed to CHG and the other Junior Creditors under the CHG Lease Facility Documents with respect to Rent; provided that if such payment is less than the Casualty Value, an amount equal to the difference between (i) the Casualty Value and (ii) the amount applied to prepay Senior Term Loans under Section 2.5(c)(ii) or (iii) of the Credit Agreement shall be added to the Rent Balance (as defined in the CHG Lease Agreement).  Each of CHG, on behalf of itself and the other Junior Creditors, and the Borrower hereby acknowledges and agrees that any payment of principal or interest on the Senior Loans made from the Debt Service Reserve Account pursuant to Section 4.3 hereof shall also constitute payment by CHG of its corresponding obligations owed to the Borrower under the CDF2 Loan Documents from the debt service reserve required thereunder and shall constitute application by CHG of the Prepaid Reserve required under the CHG Lease Facility Documents to payment of the corresponding Rent Shortfall (as defined in the CHG Lease Agreement) under the CHG Lease Facility Documents.  For the avoidance of doubt, deposits into the Debt Service Reserve Account, whether pursuant to Section 4.4(e) , 4.5(e) or otherwise, do not constitute payments of the underlying obligations for which such reserve is established.
 
3.4     Consent to Contract Change .  (a)  Each of Cinedigm, Parent Holdings, Holdings and the Borrower agrees not to execute, enter into any amendment, restatement, modification, supplement, extension, renewal or replacement of, or any waiver of any provision of, and will not take any action to terminate or cancel, the Management Services Agreement, any Exhibitor Agreement (relating to the Phase 2 Rollout), any Digital Cinema Deployment Agreement or any Supply Agreement (relating to the Phase 2 Rollout) (any of the foregoing, a " Contract Change ") until the Discharge of Senior Facilities Obligations, without not less than five (5) Business Days notice to the Senior Administrative Agent and CHG (or such shorter period acceptable to the Senior Administrative Agent in its sole discretion).
 
(b)     Each of Cinedigm, Parent Holdings, Holdings and the Borrower agrees not to execute any Contract Change other than immaterial Contract Changes that do not affect the obligations or rights of any party in any material respect (i) until the Discharge of Senior Facilities Obligations, without the prior written consent of the Senior Agent and (ii) until the Discharge of CHG Lease Obligations, without the prior written consent of CHG; provided that
 

 
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CHG's consent shall not be required, and CHG may not object to any Contract Change to which the Senior Agent has consented pursuant to clause (i) above, (A) at any time after the occurrence and during the continuance of a Default or Event of Default under Section 9.1(a) or (e) of the Senior Credit Agreement, (B) at any time after the occurrence and during the continuance of a Default or Event of Default under Section 9.1 of the Senior Credit Agreement (other than a Default or Event of Default under clauses (a) or (e) of Section 9.1 of the Senior Credit Agreement) unless such Contract Change would reasonably be expected to materially and adversely affect CHG's economic interests or (C) at any time prior to the Discharge of Senior Facilities Obligations if such Contract Change is an immaterial Contract Change or, in the case of a Contract Change with respect to an Exhibitor Agreement, is a change consistent in form and substance with previously approved Exhibitor Agreements.  Each of Cinedigm, Parent Holdings, Holdings and the Borrower agrees that any Contract Change effected in violation of the preceding sentence shall be deemed null and void.  Subject to the two preceding sentences, each of Cinedigm, Parent Holdings, Holdings and the Borrower agrees to use its commercially reasonable efforts to implement any Contract Change requested by (x) until the Discharge of Senior Facilities Obligations, the Senior Agent, and (y) thereafter until the Discharge of CHG Lease Obligations, CHG.
 
SECTION 4 .   Cash Management and Waterfall .
 
4.1     Establishment of Cash Management Accounts .  (a) The Borrower agrees to establish with a Deposit Bank on or prior to the Effective Date each of the following lockbox or other Dollar deposit accounts listed below (all of which Dollar deposit accounts shall, at the Borrower's option, be interest-bearing) on terms satisfactory to the Specified Senior Agent in its sole discretion (each to be referred to herein by the defined term provided below and, collectively, together with the Distribution Lockbox Account, the Holdings Operating Account, the Equipment Purchase Account and the DDTL Escrow Account, the " Cash Management Accounts "):
 
Name of Account
 
Deposit Bank
 
PO Box/Account Number
 
Defined Term for Account
 
Collection Account
 
SG
 
 
"Collection Account"
 
Debt Service Account
 
SG
 
 
"Debt Service Account"
 
Debt Service Reserve Account
 
SG
 
 
"Debt Service Reserve Account"
 
 
The Borrower shall maintain (i) each of the Collection Account and the Debt Service Account until the Discharge of Second Subordinated Notes (or, if upon the Discharge of First Subordinated Notes, the only holder of Second Subordinated Notes is Cinedigm, the Discharge of First Subordinated Notes), and (ii) the Debt Service Reserve Account until the Discharge of Senior Facilities Obligations (including, for the avoidance of doubt, the indefeasible payment in full in cash of the SG Advisory Fee Note), in each case in accordance with this Section 4 .
 

 
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(b)           The Borrower acknowledges and agrees that the lockbox account with [_______] (PO Box [_____] and with Account No. [_______] has previously been established by Parent Holdings as the "Distributor Lockbox Account" and will be subject to the Distributor Lockbox Collateral Agency Agreement in accordance with Section 4.2 hereof.  The Borrower will cause such arrangements to be maintained until the Discharge of Second Subordinated Notes (or, if upon the Discharge of First Subordinated Notes, the only holder of Second Subordinated Notes is Cinedigm, the Discharge of First Subordinated Notes) in accordance with this Section 4 .
 
(c)           Holdings acknowledges and agrees that the deposit account with Account No. 201413 has previously been established by Holdings as the "Holdings Operating Account" and is subject to a Control Agreement entered into on or before the Effective Date in favor of SG as designee for the Senior Collateral Agent, CHG and the Borrower.  The Borrower will cause such arrangements to be maintained until the Discharge of Second Subordinated Notes (or, if upon the Discharge of First Subordinated Notes, the only holder of Second Subordinated Notes is Cinedigm, the Discharge of First Subordinated Notes) in accordance with this Section 4 .
 
(d)           Holdings acknowledges and agrees that the deposit account with Account No. 201405 has previously been established by Holdings as the "Equipment Purchase Account" and is subject to a Control Agreement entered into on or before the Effective Date in favor of SG as designee for the Senior Collateral Agent, CHG and the Borrower.  The Equipment Purchase Account shall be maintained in accordance with this Section 4 until the later of (A) the last day of the Availability Period and (B) the payment of all vendor invoices due and payable under the Supply Agreements as of the last day of the Availability Period.
 
(e)           On or prior to the DDTL Termination Date, if the Borrower delivers a Notice of DDTL Termination Date Funding, the Senior Administrative Agent agrees to establish in its name and with SG a non-interest bearing deposit account (the " DDTL Escrow Account ") which deposit account shall be subject to a control agreement in favor of the Senior Collateral Agent that provides exclusive "control" (as defined in the applicable UCC) to the Senior Collateral Agent, prohibits the Borrower from making withdrawals and is otherwise on terms satisfactory to the Senior Collateral Agent in its sole discretion.  The Borrower will cause the DDTL Escrow Account to be maintained until all funds therein are disbursed in accordance with Sections 2.2(a) and 2.5(d) of the Senior Credit Agreement.
 
(f)           On or prior to the Effective Date, CHG agrees to establish in its name and with SG a deposit account (the " Use Tax Account "), which deposit account shall be subject to a control agreement in favor of the Senior Collateral Agent that (i) provides exclusive "control" (as defined in the applicable UCC) to the Senior Collateral Agent, (ii) permits CHG to have access solely for the purposes provided under this Agreement, (iii) prohibits the Borrower from making withdrawals and (iv) is otherwise on terms satisfactory to the Senior Collateral Agent and CHG in their discretion.  CHG will cause the Use Tax Account to be maintained until the date upon which the Discharge of CHG Lease Obligations has occurred.  CHG may invest the contents of the Use Tax Account solely in Cash Equivalents or such other investment vehicles as may be mutually agreed among CHG, the Borrower and the Specified Senior Agent, and may retain any returns on such investments for its own account.  Amounts retained in the Use Tax Account as of the date upon which the Discharge of CHG Lease Obligations shall have occurred shall be transferred to Holdings for deposit into the Collection Account for application in accordance
 

 
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with Sections 4.4 , 4.5 and 4.6 hereof.  CHG agrees to pay use taxes associated with the lease by Holdings from CHG of Installed Digital Systems pursuant to the CHG Lease Facility Documents as and when due and payable by CHG regardless of whether amounts in the Use Tax Account are sufficient to cover such use taxes then due and payable, and other than as set forth in the immediately preceding two sentences, CHG agrees not to withdraw amounts from the Use Tax Account for application to any other use.
 
4.2     Deposits into Collection Account or Distributor Lockbox Account; Transfer to Collection Account .  Each Grantor  shall  (i) deposit or cause to be deposited all revenues and earnings derived from Installed Digital Systems (including amounts paid by Exhibitors with respect to any booking commitments and VPFs actually contributed on the Effective Date by Parent Holdings pursuant to the Sale and Contribution Agreement, but excluding all other VPFs) into the Collection Account, (ii) cause to be deposited all VPFs derived from the Installed Digital Systems (other than VPFs actually contributed on the Effective Date by Parent Holdings pursuant to the Sale and Contribution Agreement) into the Distributor Lockbox Account, (iii) on the Effective Date, deposit or cause to be deposited the cash capital contribution made by Cinedigm to Parent Holdings and Parent Holdings to Holdings, as a condition precedent to the Effective Date under clause (c)(i) of Schedule 3.1 of the Senior Credit Agreement, into the Holdings Operating Account as necessary to cause the Target Minimum Cash Amount to be on deposit therein, with the remainder to be contributed by Holdings to the Borrower and deposited into the Collection Account and (iv) transfer or cause to be transferred into the Collection Account from the Equipment Purchase Account the cash portion of the Installation Management Fee to the extent required or permitted by Section 4.9(c)(I) or (II) hereof.  On or before the date required under the Senior Credit Agreement, Parent Holdings shall enter into an agreement with the applicable Deposit Bank and the collateral agent under the Distributor Lockbox Collateral Agency Agreement, which shall provide for such collateral agent's exclusive control over all cash collections and deposits received in the Distributor Lockbox Account and allows such collateral agent to require that all collection and deposits (including those relating to the Installed Digital Systems) be transferred to the Collection Account within two (2) Business Days in accordance with the Distributor Lockbox Collateral Agency Agreement.
 
4.3     Debt Service Reserve and Debt Service Reserve Account .  The Borrower shall fund and maintain at all times the Debt Service Reserve in the Debt Service Reserve Account in accordance with the terms of this Agreement and the Control Agreement governing the Debt Service Reserve Account.  On any Interest Payment Date or Payment Date when no Event of Default has occurred and is continuing, the Senior Administrative Agent may cause the Debt Service Reserve Account to be debited for the purpose of paying interest (other than Accrued Default Interest) and principal under the Senior Credit Agreement to the extent amounts then on deposit in the Debt Service Account or otherwise available are insufficient.  During the continuance of an Event of Default, the Senior Administrative Agent may or, at the request of the Required Senior Creditors, shall, cause the Debt Service Reserve Account to be debited for the purpose of paying interest and principal then due and payable under the Senior Credit Agreement to the extent amounts then on deposit in the Debt Service Account or otherwise available are insufficient.  Notwithstanding anything to the contrary contained herein or in any other Senior Credit Document, the Senior Administrative Agent, on behalf of the Senior Lenders, shall have recourse to the amounts in the Debt Service Reserve Account, if any, for (A) the payment of the
 

 
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principal of the Senior Loans on the Maturity Date (or such earlier date on which the Senior Loans become due and payable pursuant to Section 9.2 of the Senior Credit Agreement) and (ii) the payment in full of all other Senior Obligations on the Maturity Date or during the continuance of an Event of Default.  Pursuant to Section 3.3(c) hereof, any payment of principal or interest on the Senior Loans made from the Debt Service Reserve Account under this Section 4.3 shall also constitute payment by CHG of its corresponding obligations owed to the Borrower under the CDF2 Loan Documents from the debt service reserve required thereunder and shall constitute application by CHG of the Prepaid Reserve required under the CHG Lease Facility Documents to payment of the corresponding Rent Shortfall (as defined in the CHG Lease Agreement) under the CHG Lease Facility Documents.  All earnings on the Debt Service Reserve shall be credited to the Debt Service Reserve Account and on the Quarterly Application Date, such earnings shall, if the Senior Administrative Agent determines the Debt Service Reserve Account is fully-funded, be remitted to the Collection Account so long as no Default has occurred and is continuing or would be caused thereby.
 
4.4     Applications on Monthly Application Date .  So long as no Event of Default has occurred and is continuing and any Senior Commitments or Specified Senior Obligations remain outstanding, funds in the Collection Account will be applied on each Monthly Application Date in the following priority:
 
(a)     First , to the Holdings Operating Account, an amount sufficient to pay or reimburse (or, in the case of Permitted Tax Expenses, Permitted Operating Expenses, Holdings' allocable share of clauses (D) and (E) below and Capital Expenditures, to make a distribution to Holdings to pay or reimburse), as applicable, payment of (A) the Servicing Fee earned during the fiscal month reporting period reflected in the most recently delivered Management Report and payable as of such Monthly Application Date, (B) Permitted Tax Expenses, (C) after the Availability Period, Permitted Operating Expenses (subject to a maximum disbursement under this clause (C) of (1) for the Fiscal Year ending March 31, 2013, the product of (i) $200,000 and (ii) a ratio, the numerator of which is the number of days elapsed since the end of the Availability Period and the denominator of which is 365, (2) for the Fiscal Year ending March 31, 2014, $206,000 (as increased in each Fiscal Year pursuant to clause (3) below, the " Opex Base Amount "), and (3) for each Fiscal Year thereafter, 103% of the Opex Base Amount for the immediately preceding Fiscal Year), (D) Permitted Back-Up Services Expenses, (E) Back-Up Services Expenses (other than Permitted Back-Up Services Expenses), audit fees, audit expenses and related indemnities incurred under the Exhibitor Agreements (other than any of the foregoing that constitute Permitted Operating Expenses) and other operating expenses (other than Permitted Operating Expenses) to the extent such Back-Up Services Expenses, audit fees, audit expenses and related indemnities and other operating expenses are deducted from the calculation of the Servicing Fee referenced in clause (A) above, and (F) after the Availability Period, Capital Expenditures to the extent permitted under Section 8.16(b) of the Senior Credit Agreement (or the equivalent of such Section under any other Specified Senior Facility, if applicable), in the case of the amounts to be disbursed pursuant to clauses (B) , (C) , (D) , (E) and (F) above, that are actually paid by or on behalf of Holdings, the Borrower or its Subsidiaries in the preceding fiscal month as reflected in the most recently delivered Cash Expense Report (with such adjustments by the Specified Senior Agent as necessary to reflect any applicable reconciliations reflected in the most recently delivered Management Report); provided that in any Fiscal Year, the maximum amount permitted under this clause (a) to be applied in the
 

 
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aggregate to Permitted Property Tax Expenses and Permitted Operating Expenses shall be reduced to the extent of any amounts previously or concurrently applied to the payment of Permitted Back-Up Services Expenses in such Fiscal Year;
 
(b)     Second , to (i) the Senior Administrative Agent, an amount equal to the unpaid costs and expenses then due, including attorneys' fees and expenses, of any Senior Agent or any Senior Lender that are required to be reimbursed pursuant to the Senior Credit Agreement or any other Senior Credit Document and (ii) to CHG, an amount equal to the unpaid costs and expenses then due, including attorneys' fees and expenses, of CHG or any Junior Creditor that are required to be reimbursed pursuant to the CHG Lease Agreement or any CHG Lease Facility Document;
 
(c)     Third , to the Debt Service Account, an amount equal to the sum of (A) the scheduled payment of principal, Rent or similar obligations of Specified Senior Obligations due on the next Payment Date, (B) all interest (other than Accrued Default Interest) on the Specified Senior Obligations due and payable on or prior to the next Interest Payment Date and (C) any scheduled amounts due under any Secured Hedging Documents on or prior to the next Payment Date; provided that if any Subordinated Notes constitute the Specified Senior Obligations as of any Monthly Application Date, no funds in the Collection Account shall be applied on such Monthly Application Date pursuant to this clause (c) before the date that is 91 days after the date upon which the Discharge of CHG Lease Obligations has occurred; provided further that prior to Discharge of Senior Facilities Obligations and pursuant to Section 3.3(a) and (b) hereof, any and all amounts due and owing under the CHG Lease Facility Documents shall be applied under this clause (c) and Section 4.7 hereof to the Senior Administrative Agent for the benefit of the Senior Lenders and shall be deemed to satisfy Holdings' payment obligations owed to CHG and the other Junior Creditors under the CHG Lease Facility Documents with respect to Rent and CHG's principal and interest payment obligations due and owing to Borrower under the CDF2 Loan Documents;
 
(d)     Fourth , to the Specified Senior Agent, an amount equal to all Accrued Default Interest, if any, and any fees and other amounts owing to the Specified Senior Creditors under the Specified Senior Facility, including amounts owing pursuant to Section 2.13 of the Senior Credit Agreement, if applicable; provided that, to the extent amounts on deposit in the Collection Account are insufficient to pay in full all Accrued Default Interest pursuant to this clause (d) , any unpaid Accrued Default Interest shall remain outstanding and accrue interest at the rate specified in Section 2.6(c) of the Senior Credit Agreement until paid in full pursuant to a subsequent application of funds under Sections 4.4 or 4.5 hereto or Section 2.9(c) of the Senior Credit Agreement; provided further that prior to the Discharge of Senior Obligations and pursuant to Section 3.3(a) and (b) hereof, all Accrued Default Interest and any fees and other amounts paid to the Senior Administrative Agent under this clause (d) shall also constitute a corresponding payment of (i) accrued default interest and fees and other amounts owing under the CDF2 Loan Agreement and (ii) to the extent applicable, the Late Payment Rate (as defined in the CHG Lease Agreement) and other comparable amounts owing under the CHG Lease Agreement;
 
(e)     Fifth , until the Discharge of Senior Facilities Obligations, to the Debt Service Reserve Account, an amount (if any) necessary to cause the amount on deposit therein to
 

 
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equal the Debt Service Reserve; provided that for any amounts funded to the Debt Service Reserve Account, a corresponding amount shall be deemed funded to (i) the debt service reserve under the CDF2 Loan Documents and (ii) the Prepaid Reserve under the CHG Lease Facility Documents;
 
(f)     Sixth , so long as no Default or Event of Default exists or would result therefrom, to CHG as payment (without interest) of any Lease Administration Fees then due and owing; provided that, to the extent amounts on deposit in the Collection Account are insufficient to pay in full all such Lease Administration Fees pursuant to this clause (f) , any unpaid Lease Administration Fees shall remain outstanding until paid in full (without interest) pursuant to a subsequent application of funds under Section 4.4 or 4.5 hereto;
 
(g)     Seventh , to the Equipment Purchase Account if amounts on deposit therein are insufficient to pay supplier invoices then due and payable under applicable Supply Agreements such additional amount necessary to pay such invoices (after giving effect to any extended payment terms to the extent available under such Supply Agreements);
 
(h)     Eighth , (i) to the Holdings Operating Account as a Restricted Payment from the Borrower, an amount necessary to cause the amounts on deposit in the Holdings Operating Account as of such Application Date to equal the Target Minimum Cash Amount and (ii) to the Administrative Servicer as payment of any portion of the Installation Management Fee (A) that becomes due and payable under the Management Services Agreement during the Availability Period, (B) that is not evidenced by a Cinedigm Installation Note and (C) that was transferred from the Equipment Purchase Account to the Collection Account when earned by the Administrative Servicer to the extent required or permitted by Section 4.9(c)(I) or (c)(II) ; provided that, to the extent amounts in the Collection Account are insufficient to pay all amounts due and owing pursuant to the foregoing clauses (i) and (ii) , such amounts in the Collection Account shall be applied toward the foregoing clauses (i) and (ii) on a 50/50% basis;
 
(i)     Ninth , from and after the date upon which the Borrower has delivered or caused to be delivered a monthly report pursuant to Section 6.1(a) of the Senior Credit Agreement for the fiscal month ending June 30, 2012, which monthly report sets forth the calculation of the Screen Turnover Ratio as required by the Senior Credit Agreement, and so long as no Default exists or would result therefrom, to the Administrative Servicer as payment of any Incentive Servicing Fees not evidenced by a Cinedigm Servicing Note then due and payable in cash under the Management Services Agreement; provided that (1) if a Servicer Performance Default of the type described in clause (a) of the definition thereof has occurred (regardless of whether such Servicer Performance Default is then continuing), no payments of Incentive Servicing Fees pursuant to this clause (i) shall be permitted until the Discharge of the Senior Facilities Obligations, Discharge of the CHG Lease Obligations and Discharge of the First Subordinated Notes has occurred and (2) if any other Servicer Performance Default has occurred, no payments of Incentive Servicing Fees pursuant to this clause (i) shall be permitted for so long as such Servicer Performance Default is continuing; provided further that any Incentive Servicing Fees not paid in cash as a result of the operation of the immediately preceding proviso may be paid, at the election of the Administrative Servicer, by issuance of additional Cinedigm Servicing Notes in such amount or by capitalizing such amount and adding it to the principal amount then outstanding under the Cinedigm Servicing Notes;
 

 
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(j)     Tenth , to the Senior Administrative Agent for the benefit of the Senior Revolving Lenders, an amount equal to such principal amount of the Senior Revolving Loans outstanding as of such Application Date as the Borrower may properly elect pursuant to Section 2.4 of the Senior Credit Agreement (together with all accrued and unpaid interest on the amount prepaid and all amounts owing pursuant to Section 2.13(a) of the Senior Credit Agreement as a result of such prepayment);
 
(k)     Eleventh , from and after the date upon which all Senior Obligations (other than the SG Advisory Fee Note and any Secured Hedging Obligations) have been repaid or Refinanced in full in cash, to SG as payment of all amounts then outstanding under the SG Advisory Fee Note; and
 
(l)     Twelfth , for any Monthly Application Date occurring prior to the end of the Availability Period, and so long as no Default or Event of Default exists or would result therefrom, at the Borrower's request, to Holdings as a Restricted Payment in an amount equal to any excess remaining amount in the Collection Account, the proceeds of which shall be (A) used by Holdings to invest in additional Installed Digital Systems (in which case such proceeds shall be deposited by Holdings into the Equipment Purchase Account), (B) retained by Holdings as cash on hand in the Holdings Operating Account, or (C) applied by Holdings on behalf of the Borrower to the voluntary prepayment of the Senior Term Loans (together with all accrued and unpaid interest on the amount prepaid and all amounts owing pursuant to Section 2.13(a) of the Senior Credit Agreement as a result of such prepayment) to the extent then permitted by Sections 2.4 and 2.9 of the Senior Credit Agreement; provided that, pursuant to Section 3.3(c) hereof, any voluntary prepayment of the Senior Term Loans under this clause (l) shall also constitute payment by CHG of its corresponding obligations owed to the Borrower under the CDF2 Loan Documents and shall be deemed to satisfy Holdings' payment obligations owed to CHG and the other Junior Creditors under the CHG Lease Facility Documents with respect to Variable Rent.
 
Subject to Section 2.9(c) of the Senior Credit Agreement, amounts not utilized on a Monthly Application Date as set forth above shall be retained in the Collection Account for application on the next Application Date.
 
4.5     Applications on Quarterly Application Date .  So long as no Event of Default has occurred and is continuing and any Senior Commitments, Secured Senior Obligations or Subordinated Notes remain outstanding, funds in the Collection Account will be applied on each Quarterly Application Date in the following priority:
 
(a)     First , to the Holdings Operating Account, an amount sufficient to pay or reimburse (or, in the case of Permitted Tax Expenses, Permitted Operating Expenses, Holdings' allocable share of clauses (D) and (E) below and Capital Expenditures, to make a distribution to Holdings to pay or reimburse), as applicable, payment of (A) the Servicing Fee earned during the fiscal month reporting period reflected in the most recently delivered Management Report and payable as of such Quarterly Application Date, (B) Permitted Tax Expenses, (C) after the Availability Period, Permitted Operating Expenses (subject to a maximum disbursement under this clause (C) of (1) for the Fiscal Year ending March 31, 2013, the product of (i) $200,000 and (ii) a ratio, the numerator of which is the number of days elapsed since the end of the Availability Period and the denominator of which is 365, (2) for the Fiscal Year ending March
 

 
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31, 2014, $206,000 (as increased in each Fiscal Year pursuant to clause (3) below, the "Opex Base Amount"), and (3) for each Fiscal Year thereafter, 103% of the Opex Base Amount for the immediately preceding Fiscal Year), (D) Permitted Back-Up Services Expenses, (E) Back-Up Services Expenses (other than Permitted Back-Up Services Expenses), audit fees, audit expenses and related indemnities incurred under the Exhibitor Agreements (other than any of the foregoing that constitute Permitted Operating Expenses) and other operating expenses (other than Permitted Operating Expenses) to the extent such Back-Up Services Expenses, audit fees, audit expenses and related indemnities and other operating expenses are deducted from the calculation of the Servicing Fee referenced in clause (A) above, and (F) after the Availability Period, Capital Expenditures to the extent permitted under Section 8.16(b) of the Senior Credit Agreement, (or the equivalent of such Section under any other Specified Senior Facility, if applicable), in the case of the amounts to be disbursed pursuant to clauses (B), (C), (D), (E) and (F) above, that are actually paid by or on behalf of Holdings, the Borrower or its Subsidiaries in the preceding fiscal month as reflected in the most recently delivered Cash Expense Report (with such adjustments by the Specified Senior Agent as necessary to reflect any applicable reconciliations reflected in the most recently delivered Management Report); provided that in any Fiscal Year, the maximum amount permitted under this clause (a) to be applied in the aggregate to Permitted Property Tax Expenses and Permitted Operating Expenses shall be reduced to the extent of any amounts previously or concurrently applied to the payment of Permitted Back-Up Services Expenses in such Fiscal Year;
 
(b)     Second , to (i) the Senior Administrative Agent, an amount equal to the unpaid costs and expenses then due, including attorneys' fees and expenses, of any Senior Agent or any Senior Lender that are required to be reimbursed pursuant to the Senior Credit Agreement or any other Senior Credit Document and (ii) to CHG, an amount equal to the unpaid costs and expenses then due, including attorneys' fees and expenses, of CHG or any Junior Creditor that are required to be reimbursed pursuant to the CHG Lease Agreement or any CHG Lease Facility Document;
 
(c)     Third , to the Debt Service Account, an amount equal to the sum of (A) the scheduled payment of principal, Rent or similar obligations of Specified Senior Obligations due on the next Payment Date, (B) all interest (other than Accrued Default Interest) on the Specified Senior Obligations due and payable on or prior to the next Interest Payment Date and (C) any scheduled amounts due under any Secured Hedging Documents on or prior to the next Payment Date; provided that if any Subordinated Notes constitute the Specified Senior Obligations as of any Quarterly Application Date, no funds in the Collection Account shall be applied on such Quarterly Application Date pursuant to this clause (c) before the date that is 91 days after the date upon which the Discharge of CHG Lease Obligations has occurred; provided further that prior to Discharge of Senior Facilities Obligations and pursuant to Section 3.3(a) and (b) hereof, any and all amounts due and owing under the CHG Lease Facility Documents shall be applied under this clause (c) and Section 4.7 hereof to the Senior Administrative Agent for the benefit of the Senior Lenders and shall be deemed to satisfy Holdings' payment obligations owed to CHG and the other Junior Creditors under the CHG Lease Facility Documents with respect to Rent and CHG's principal and interest payment obligations due and owing to Borrower under the CDF2 Loan Documents;
 

 
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(d)     Fourth , to the Specified Senior Agent, an amount equal to all Accrued Default Interest, if any, and any fees and other amounts owing to the Specified Senior Creditors under the Specified Senior Facility, including amounts owing pursuant to Section 2.13 of the Senior Credit Agreement, if applicable; provided that, to the extent amounts on deposit in the Collection Account are insufficient to pay in full all Accrued Default Interest pursuant to this clause (d) , any unpaid Accrued Default Interest shall remain outstanding and accrue interest at the rate specified in Section 2.6(c) of the Senior Credit Agreement until paid in full pursuant to a subsequent application of funds under Sections 4.4 or 4.5 hereto or Section 2.9(c) of the Senior Credit Agreement; provided further that prior to the Discharge of Senior Obligations and pursuant to Section 3.3(a) and (b) hereof, all Accrued Default Interest and any fees and other amounts paid to the Senior Administrative Agent under this clause (d) shall also constitute a corresponding payment of (i) accrued default interest and fees and other amounts owing under the CDF2 Loan Agreement and (ii) to the extent applicable, the Late Payment Rate (as defined in the CHG Lease Agreement) and other comparable amounts owing under the CHG Lease Agreement;
 
(e)     Fifth , until the Discharge of Senior Facilities Obligations, to the Debt Service Reserve Account, an amount (if any) necessary to cause the amount on deposit therein to equal the Debt Service Reserve; provided that for any amounts funded to the Debt Service Reserve Account, a corresponding amount shall be deemed funded to (i) the debt service reserve under the CDF2 Loan Documents and (ii) the Prepaid Reserve under the CHG Lease Facility Documents;
 
(f)     Sixth , so long as no Default or Event of Default exists or would result therefrom, to CHG as payment (without interest) of any Lease Administration Fees then due and owing; provided that, to the extent amounts on deposit in the Collection Account are insufficient to pay in full all such Lease Administration Fees pursuant to this clause (f) , any unpaid Lease Administration Fees shall remain outstanding until paid in full (without interest) pursuant to a subsequent application of funds under Section 4.4 or 4.5 hereto;
 
(g)     Seventh , to the Equipment Purchase Account if amounts on deposit therein are insufficient to pay supplier invoices then due and payable under applicable Supply Agreements such additional amount necessary to pay such invoices (after giving effect to any extended payment terms to the extent available under such Supply Agreements);
 
(h)     Eighth , (i) to the Holdings Operating Account as a Restricted Payment from the Borrower, an amount necessary to cause the amounts on deposit in the Holdings Operating Account as of such Application Date to equal the Target Minimum Cash Amount and (ii) to the Administrative Servicer as payment of any portion of the Installation Management Fee that (A) becomes due and payable under the Management Services Agreement during the Availability Period, (B) is not evidenced by a Cinedigm Installation Note and (C) that was transferred from the Equipment Purchase Account to the Collection Account when earned by the Administrative Servicer to the extent required or permitted by Section 4.9(c)(I) or (c)(II) ; provided that, to the extent amounts in the Collection Account are insufficient to pay all amounts due and owing pursuant to the foregoing clauses (i) and (ii) , such amounts in the Collection Account shall be applied toward the foregoing clauses (i) and (ii) on a 50/50% basis;
 

 
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(i)     Ninth , from and after the date upon which the Borrower has delivered or caused to be delivered a monthly report pursuant to Section 6.1(a) of the Senior Credit Agreement for the fiscal month ending June 30, 2012, which monthly report sets forth the calculation of the Screen Turnover Ratio as required by the Senior Credit Agreement, and so long as no Default exists or would result therefrom, to the Administrative Servicer as payment of any Incentive Servicing Fees not evidenced by a Cinedigm Servicing Note then due and payable in cash under the Management Services Agreement; provided that (1) if a Servicer Performance Default of the type described in clause (a) of the definition thereof has occurred (regardless of whether such Servicer Performance Default is then continuing), no payments of Incentive Servicing Fee pursuant to this clause (i) shall be permitted until the Discharge of the Senior Facilities Obligations, Discharge of the CHG Lease Obligations and Discharge of the First Subordinated Notes has occurred and (2) if any other Servicer Performance Default has occurred, no payments of Incentive Servicing Fees pursuant to this clause (i) shall be permitted for so long as such Servicer Performance Default is continuing; provided further that any Incentive Servicing Fees not paid in cash as a result of the operation of the immediately preceding proviso may be paid, at the election of the Administrative Servicer, by issuance of additional Cinedigm Servicing Notes in such amount or by capitalizing such amount and adding it to the principal amount then outstanding under the Cinedigm Servicing Notes;
 
(j)     Tenth , to the Senior Administrative Agent for the benefit of the Senior Revolving Lenders, an amount equal to such principal amount of the Senior Revolving Loans outstanding as of such Application Date (together with all accrued and unpaid interest on the amount prepaid and all amounts owing pursuant to Section 2.13(a) of the Senior Credit Agreement as a result of such prepayment);
 
(k)     Eleventh , from and after the date upon which all Senior Obligations (other than the SG Advisory Fee Note and any Secured Hedging Obligations) have been repaid or Refinanced in full in cash, to SG as payment of all amounts then outstanding under the SG Advisory Fee Note; and
 
(l)     Twelfth , (A) for any Quarterly Application Date occurring prior to the end of the Availability Period, if applicable, and so long as no Default or Event of Default exists or would result therefrom, at the Borrower's request, to Holdings as a Restricted Payment in an amount equal to any excess remaining amount in the Collection Account, the proceeds of which shall be (x) used by Holdings to invest in additional Installed Digital Systems (in which case such proceeds shall be deposited by Holdings into the Equipment Purchase Account), (y) retained by Holdings as cash on hand in the Holdings Operating Account, or (z) applied by Holdings on behalf of the Borrower to the voluntary prepayment of the Senior Term Loans (together with all accrued and unpaid interest on the amount prepaid and all amounts owing pursuant to Section 2.13(a) of the Senior Credit Agreement as a result of such prepayment) to the extent then permitted by Sections 2.4 and 2.9 of the Senior Credit Agreement and (B)(1) for any Quarterly Application Date occurring prior to the end of the Availability Period and during  the existence of a Default or Event of Default or (2) for any Quarterly Application Date occurring on the last day of or after the Availability Period, in each case, to the Specified Senior Agent, 100% of Excess Cash Flow as a mandatory prepayment of the Specified Senior Obligations to the extent required pursuant to Section 2.5(a) of the Senior Credit Agreement (or the equivalent of such Section under any other Specified Senior Facility, if applicable); provided that pursuant to
 

 
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Section 3.3(c) hereof any voluntary or mandatory prepayment of the Senior Term Loans made under this clause (l) shall also constitute payment by CHG of its corresponding obligations owed to the Borrower under the CDF2 Loan Documents and shall be deemed to satisfy Holdings' payment obligations owed to CHG and the other Junior Creditors under the CHG Lease Facility Documents with respect to Variable Rent.
 
To the extent Excess Cash Flow otherwise required to be applied as a prepayment of the Specified Senior Obligations as of any Quarterly Application Date pursuant to the prior clause (l) is less than the thresholds described in Section 2.5(a) of the Senior Credit Agreement (or the equivalent of such Section under any other Specified Senior Facility, if applicable), such unapplied Excess Cash Flow shall remain on deposit in the Collection Account until the next Application Date.
 
Subject to Section 2.9(c) of the Senior Credit Agreement, amounts not utilized on a Quarterly Application Date as set forth above shall be retained in the Collection Account for application on the next Application Date.
 
4.6     Retention by Holdings .  Immediately after the date upon which the Discharge of Second Subordinated Notes shall have occurred (or, if upon the Discharge of First Subordinated Notes, the only holder of Second Subordinated Notes is Cinedigm, the date upon which the Discharge of First Subordinated Notes shall have occurred), the Borrower shall transfer to Holdings all funds in the Collection Account for application by Holdings to any lawful purpose, including applications permitted to be recouped under the Digital Cinema Deployment Agreements.
 
4.7     Distributions from the Debt Service Account .  On each Payment Date and Interest Payment Date, amounts on deposit in the Debt Service Account shall be applied by the Specified Senior Agent to the payment of all principal, Rent or similar obligations and interest amounts (other than Accrued Default Interest) due with respect to the Specified Senior Obligations as of such respective Payment Date or Interest Payment Date and any scheduled amounts due under any Secured Hedging Documents as of such Payment Date; provided that prior to Discharge of Senior Facilities Obligations and pursuant to Section 3.3(a) and (b) hereof, any amounts applied to the Senior Administrative Agent for the benefit of the Senior Lenders under this Section 4.7 shall also constitute payment by Holdings of its corresponding obligations due to CHG and the Junior Creditors with respect to Rent and shall constitute payment by CHG of its corresponding principal and interest payment obligations due to the Borrower under the CDF2 Loan Documents.
 
4.8     Payment Instructions .  All payments in Sections 4.4 and 4.5 hereto shall be paid through amounts on deposit in the Collection Account and effected by the Specified Senior Agent providing the Senior Agent or, if a standing instruction has been issued by the Senior Agent pursuant to this Section 4.8 , the applicable Deposit Bank, notice of the amounts to be disbursed from the Collection Account; provided that, while an Event of Default has occurred and is continuing, (i) the Specified Senior Agent shall effect all payments via notice to the Senior Agent and (ii) provide the Senior Agent at least two (2) days advance notice of requested disbursements from the Collection Account.
 

 
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4.9     Deposits To/Distributions From Equipment Purchase Account .  The following amounts shall be deposited into the Equipment Purchase Account directly, or if received by any Grantor, transferred from the Holdings Operating Account or otherwise, in each case immediately at any time and to the extent a supplier invoice is due under the applicable Supply Agreement (after giving effect to any extended payment terms to the extent available under such Supply Agreement):  (i) all proceeds of purchases by CHG from Holdings of Installed Digital Systems pursuant to the CHG Sale Leaseback, (ii) all Required Exhibitor Contributions, (iii) any transfers from the Collection Account for investment in Installed Digital Systems permitted pursuant to Sections 4.4(g) , 4.4(l) , 4.5(g) or 4.5(l) hereof and (iv) transfers, at the discretion of Holdings or the Borrower, from the Holdings Operating Account to the extent not required to be otherwise applied under Sections 4.4 and 4.5 hereof; provided that any amounts described in this sentence that are received by any Grantor shall be transferred to the Equipment Purchase Account immediately upon receipt, on or prior to the Effective Date, in an amount sufficient to pay the Initial Payment Amount under the Ballantyne Supply Agreement, it being acknowledged and agreed that such Initial Payment Amount is not subject to extended payment terms.  Amounts on deposit in the Equipment Purchase Account shall be used (a) to pay invoices in the order delivered (after giving effect to any extended payment terms under the applicable Supply Agreements) with respect to purchases by Holdings, pursuant to Supply Agreements, of Installed Digital Systems in a manner consistent with the Pipeline Report most recently delivered under the Senior Credit Agreement, (b) to transfer to the Use Tax Account, (I) concurrently with each application of amounts to purchase Installed Digital Systems under clause (a) above, an amount equal to the Applicable Tax Amount with respect to such purchase, as determined pursuant to Section 7.12 hereof and (II) concurrently with each purchase of a Previously Deployed System from an Exhibitor, an amount equal to the aggregate "CDF2 Use Tax Adjustment" with respect to such Previously Deployed System as set forth in the applicable Exhibitor Approval Schedule for the applicable Exhibitor and (c) to pay or transfer any portion of the Installation Management Fee not evidenced by a Cinedigm Installation Note as follows: (I) to the Collection Account, the amount thereof paid (or required to be paid) on the Initial Funding Date (as defined in the Senior Credit Agreement) for Installed Digital Systems financed with the proceeds of Initial Advance Term Loans (as defined in the Senior Credit Agreement), (II) to the Collection Account, any other amount thereof to the extent determined by the Administrative Servicer to be needed for working capital purposes of the Borrower and/or Holdings through the end of the Availability Period (and the Administrative Servicer agrees to make such determination in good faith), and (III) to the Administrative Servicer, any amount thereof not described in clause (c)(I) or (II) above.  Upon the later of (A) the last day of the Availability Period and (B) the payment of all vendor invoices due and payable under the Supply Agreements (or to become due and payable upon expiration of any extended payment terms under the applicable Supply Agreements) as of the last day of the Availability Period, any amounts on deposit in the Equipment Purchase Account shall be transferred to the Collection Account for application in accordance with Sections 4.4 , 4.5 and 4.6 hereof.
 
4.10     Deposits To/Distributions From Holdings Operating Account;  Insufficiency .  (a)   The following amounts shall be deposited into the Holdings Operating Account directly, or if received by any Grantor, immediately transferred to the Holdings Operating Account:  (i) on the Effective Date, the cash capital contribution made by Cinedigm to Parent Holdings and Parent Holdings to Holdings, as a condition precedent to the Effective Date under clause (c)(i) of Schedule 3.1 of the Senior Credit Agreement, as necessary to cause the
 

 
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Target Minimum Cash Amount to be on deposit in the Holdings Operating Account, (ii) after an amount sufficient to pay the Initial Payment Amount under the Ballantyne Supply Agreement has been deposited into the Equipment Purchase Account, (x) all proceeds of purchases by CHG from Holdings of Installed Digital Systems pursuant to the CHG Sale Leaseback and (y) all Required Exhibitor Contributions, (iii) all proceeds of the Senior Revolving Loans and (iv) transfers from the Collection Account in accordance with Sections 4.4(a) , 4.4(h)(i) , 4.4(l)(B) , 4.5(a) , 4.5(h)(i) and 4.5(l)(A)(y) .  Amounts on deposit in the Holdings Operating Account should be used (a) to fund the Debt Service Reserve into the Debt Service Reserve Account on the Effective Date, (b) to pay costs, expenses and fees payable by the Grantors on or about the Effective Date or any Funding Date (as defined in the Senior Credit Agreement) incurred in connection with the Senior Documents, the CHG Lease Facility Documents and the CDF2 Loan Documents, (c) to transfer to the Equipment Purchase Account immediately at any time and to the extent a supplier invoice is due under the applicable Supply Agreement (after giving effect to any extended payment terms to the extent available under such Supply Agreement), (d) for the purposes described in Sections 4.4(a) and 4.5(a) , (e) on any Application Date prior to the last day of the Availability Period, for the purposes described in Sections 4.4(b) , 4.4(c) , 4.5(b) and 4.5(c) , but only to the extent that, as of such Application Date, funds on deposit in the Collection Account are insufficient to make any payment required by any such Section, and (f) for any other working capital purpose permitted by the Senior Facilities Documents and the CHG Lease Facility Documents.  Upon the last day of the Availability Period, and thereafter on the Business Day immediately preceding each Application Date, any amounts on deposit in the Holdings Operating Account in excess of the Target Minimum Cash Amount shall be transferred to the Collection Account for application in accordance with Sections 4.4 , 4.5 and 4.6 hereof.
 
(b)     Provided that (i) no Event of Default has occurred and is continuing, and (ii) the Specified Senior Agent received the Management Report delivered pursuant to Section 6.1(a) of the Senior Credit Agreement (or the equivalent of such Section under any other Specified Senior Facility, if applicable), then on any date other than a Monthly Application Date or Quarterly Application Date on which amounts credited to the Holdings Operating Account will be insufficient to pay all amounts to be paid pursuant to Section 4.4(a) or 4.5(a) above, prior to the next Monthly Application Date or Quarterly Application Date, as the case may be, the Borrower may provide the Specified Senior Agent with notice of the amounts and the proposed use of such amounts (with a description in reasonable detail of such use and related amounts) needed to cure such insufficiency.  Upon receipt of any such notice and confirmation by the Specified Senior Agent of such insufficiency, the Specified Senior Agent shall direct the Senior Agent to transfer from the Collection Account, within two (2) Business Days, the amount set forth in such notice to the Holdings Operating Account.
 
4.11     No Agent Liability .  Neither the Specified Senior Agent nor the Senior Agents shall have any responsibility for, or bear any risk of loss of, any investment or income of any funds in any Cash Collateral Account.  From time to time after funds are deposited in any Cash Collateral Account, the Senior Agents may apply funds then held in such Cash Collateral Account to the payment of Specified Senior Obligations in accordance with this Agreement.  No Grantor and no Person claiming on behalf of or through any Grantor shall have any right to demand payment of any funds held in any Cash Collateral Account at any time prior to the termination of all Senior Commitments and the payment in full of all Specified Senior Obligations.
 

 
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4.12     SG Advisory Fee Note .  All parties hereto acknowledge and agree that the obligations owed by the Borrower to SG under the SG Advisory Fee Note are not secured by a Lien on Collateral, but shall constitute Senior Obligations for purposes of this Section 4 .
 
4.13     CHG Indemnification Obligations .  CHG, on behalf of itself and the other Junior Creditors, hereby agrees that it shall not seek any indemnification (including, inter alia , with respect to property tax, use tax or loss of tax benefits) from Holdings or any other Grantor (and any such indemnity obligations shall not be payable) until Discharge of the Senior Facilities Obligations unless such amounts are applied in accordance with Section 3.3(a) hereof.
 
4.14     Use of Senior Facilities Proceeds .  (a)  The proceeds of the Senior Term Loans and the proceeds of funds released from the DDTL Escrow Account shall be used to fund the CDF2 Non-Recourse Loans to CHG for use to pay to Holdings a portion (including any deferred portion) of the purchase price for Installed Digital Systems pursuant to the CHG Sale Leaseback.  The proceeds of the Senior Revolving Loans shall be deposited into the Holdings Operating Account and used for the purposes set forth in Section 4.10 hereto.
 
(b)     The proceeds of the CDF2 Non-Recourse Loans shall be used to pay to Holdings a portion (including any deferred portion) of the purchase price for Installed Digital Systems pursuant to the CHG Sale Leaseback.
 
(c)     The proceeds of purchases by CHG from Holdings of Installed Digital Systems pursuant to the CHG Sale Leaseback shall be deposited into the Equipment Purchase Account or the Holdings Operating Account, as the case may be, in accordance with Sections 4.9 and 4.10 hereto, and in each case shall be withdrawn from such account and used solely for the purposes permitted by the applicable Section.
 
SECTION 5 .   Enforcement .
 
5.1     Exercise of Remedies . (a) So long as the Discharge of Senior Facilities Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Borrower or any other Grantor: (i) CHG and the other Junior Creditors (x) will not, other than as expressly set forth in instructions to CHG from the Senior Administrative Agent, exercise or seek to exercise any rights or remedies (including setoff) pursuant to any Enforcement Action whatsoever with respect to any Shared Collateral (including, without limitation, the exercise of any right under any lockbox agreement, control account agreement, landlord waiver or bailee's letter or similar agreement or arrangement to which CHG or any Junior Creditor is a party) or institute or commence, or join with any Person in commencing, any action or proceeding with respect to such rights or remedies with respect to any Shared Collateral (including any action of foreclosure, enforcement, collection or execution), (y) will not contest, protest or object to any foreclosure proceeding or action brought by the Senior Collateral Agent or any other Senior Creditor or any other exercise by the Senior Collateral Agent or any other Senior Creditor of any rights and remedies relating to the Shared Collateral, and (z) will not object to the forbearance by the Senior Collateral Agent or the other Senior Creditors from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Shared Collateral; and (ii) except as set forth in clause (i)(x) above, the Senior Collateral Agent shall have the exclusive right, and the Required
 

 
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Senior Creditors shall have the exclusive right to instruct the Senior Collateral Agent, to enforce rights, exercise remedies (including setoff and the right to credit bid their debt) and make determinations regarding the release, disposition, or restrictions with respect to the Shared Collateral without any consultation with, or the consent of, CHG or any other Junior Creditor or the Borrower, all as though the CHG Lease Obligations and the CDF2 Loan Obligations did not exist; provided that (A) in any Insolvency or Liquidation Proceeding commenced by or against the Borrower or any other Grantor, CHG may file a claim or statement of interest with respect to the CHG Lease Obligations, (B) CHG may take any action (not adverse to the prior Liens on the Shared Collateral securing the Senior Obligations, or the rights of the Senior Collateral Agent or the other Senior Creditors to exercise remedies in respect thereof) in order to preserve or protect its Lien on the Shared Collateral in accordance with the terms of this Agreement, and (C) CHG shall be entitled to file any necessary responsive or defensive pleading in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of CHG, including any claim secured by the Shared Collateral, if any, in each case in accordance with the terms of this Agreement.  In exercising rights and remedies with respect to the Shared Collateral, the Senior Collateral Agent and the other Senior Creditors may enforce the provisions of the Senior Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Shared Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.
 
(b)     Notwithstanding Section 5.1(a) above, (i) if an event of default under the CHG Lease Facility Documents has occurred and is continuing, CHG may take an Enforcement Action after the expiration of the applicable Standstill Period (it being understood that if at any time after the delivery of a Standstill Notice that commences a Standstill Period, no event of default under the CHG Lease Facility Documents is continuing, CHG may not take Enforcement Actions under this clause (b) until the expiration of a new Standstill Period commenced by a new Standstill Notice relative to the occurrence of a new event of default under the CHG Lease Facility Documents that had not occurred as of the date of the delivery of the earlier Standstill Notice), and (ii) in no event shall CHG or any Junior Creditor take any Enforcement Action if, notwithstanding the expiration of the Standstill Period, the Senior Collateral Agent or any other the Secured Creditors (1) shall have commenced prior to the expiration of the Standstill Period (or thereafter but prior to the commencement of any Enforcement Action by CHG) and be diligently pursuing in good faith any Enforcement Action whatsoever, the exercise of their enforcement rights or remedies against, or diligently attempting in good faith to vacate any stay of enforcement of their Liens on, all or a substantial portion of Shared Collateral, or (2) shall have commenced and are diligently pursuing the good faith solicitation of bids from third parties to conduct the liquidation of all or a substantial portion of the Collateral, the engagement or retention of sales brokers, marketing agents, investment bankers, accountants, auctioneers or other third parties for the purpose of valuing, marketing, promoting and selling all or a substantial portion of the Shared Collateral or the commencement of any legal proceedings or any action against or with respect to all or a substantial portion of the Shared Collateral, and (iii) prior to taking any Enforcement Action or action to commence or petition for any Insolvency Proceeding after the end of the Standstill Period, CHG shall give the Senior Collateral Agent not
 

 
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more than 30 Business Days and not less than 10 Business Days prior written notice of the intention of CHG to exercise such rights and remedies, including specifying the rights and remedies that it intends to exercise, which notice may be sent prior to the end of the Standstill Period.  CHG hereby agrees to provide the Senior Collateral Agent with a copy of any notice of the occurrence of any default or event of default under the CHG Lease Facility Documents contemporaneously with any delivery of such notice to Holdings.  The Senior Agent hereby agrees to provide CHG with a copy of any notice of the occurrence of any default or event of default under the Senior Credit Documents contemporaneously with any delivery of such notice to the Borrower.
 
(c)     CHG, on behalf of itself and each Junior Creditor, agrees that it will not take or receive any Shared Collateral or any proceeds of Shared Collateral in connection with the exercise of any right or remedy (including setoff) with respect to any Shared Collateral, unless and until the Discharge of Senior Facilities Obligations has occurred. Without limiting the generality of the foregoing, unless and until the Discharge of Senior Facilities Obligations has occurred, the sole right of CHG and the other Junior Creditors with respect to the Shared Collateral is to hold a Lien on the CHG Lease Collateral pursuant to the CHG Lease Security Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of Senior Facilities Obligations has occurred in accordance with the terms of the CHG Lease Facility Documents and applicable law.
 
(d)     CHG, for itself and on behalf of the other Junior Creditors, and each Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents), (i) agrees that it will not take any action that would hinder, delay, limit or prohibit any exercise of remedies under the Senior Credit Documents, including any collection, sale, lease, exchange, transfer or other disposition of the Shared Collateral, whether by foreclosure or otherwise, or that would limit, invalidate, avoid or set aside any Lien or Security Document or subordinate the priority of the Senior Facilities Obligations to the CHG Lease Obligations or grant the Liens securing the CHG Lease Obligations equal ranking to the Liens securing the Senior Facilities Obligations and (ii) hereby waives any and all rights it may have as a junior lien creditor or otherwise (whether arising under the UCC or under any other law) to object to the manner in which the Senior Collateral Agent or the other Senior Creditors seek to enforce or collect the Senior Facilities Obligations or the Liens granted in any of the Senior Collateral, regardless of whether any action or failure to act by or on behalf of the Senior Collateral Agent or Senior Creditors is adverse to the interest of CHG or the other Junior Creditors.
 
(e)     CHG, for itself and on behalf of the other Junior Creditors, and each Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents) hereby acknowledges and agrees that no covenant, agreement or restriction contained in the CHG Lease Security Documents or any other CHG Lease Facility Document shall be deemed to restrict in any way the rights and remedies of the Senior Collateral Agent or the other Senior Creditors with respect to the Senior Collateral as set forth in this Agreement and the Senior Credit Documents.
 
5.2     Actions Upon Breach . If CHG or any Junior Creditor, contrary to this Agreement, commences or participates in any action or proceeding against any Grantor or the Shared Collateral, such Grantor, with the prior written consent of the Senior Collateral Agent, may interpose as a defense or dilatory plea the making of this Agreement, and any Senior
 

 
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Creditor may intervene and interpose such defense or plea in its or their name or in the name of such Grantor.
 
5.3     Step In Rights With Respect to the CDF2 Loan Documents .  The parties hereto acknowledge and agree that so long as the Discharge of Senior Facilities Obligations has not occurred, upon the occurrence and during the continuance of an Event of Default under the Senior Credit Documents, the Senior Collateral Agent may, in its sole discretion, and with exclusive authority, act on behalf of the Senior Creditors with respect to the exercise of collateral remedies and any and all other collateral rights of the Borrower under the CDF2 Loan Documents.  Upon notice by the Senior Collateral Agent to CHG and the Borrower of the occurrence of an Event of Default under the Senior Credit Documents and the Senior Collateral Agent's intent to exercise collateral remedies, CHG shall accept the Senior Collateral Agent's exercise of any or all of the collateral rights of the Borrower under or with respect to any CDF2 Loan Document, to the exclusion of the Borrower.
 
5.4     Step In Rights With Respect to the CHG Lease Facility Documents .  The parties hereto acknowledge and agree that so long as the Discharge of Senior Facilities Obligations has not occurred, upon the occurrence and during the continuance of an Event of Default under the Senior Credit Documents, the Senior Collateral Agent may, in its sole discretion, and with exclusive authority, exercise, or refrain from exercising, collateral remedies and any and all other collateral rights of CHG or Holdings under the CHG Lease Facility Documents on behalf of the Senior Creditors.  Upon notice by the Senior Collateral Agent to Holdings and CHG of the occurrence of an Event of Default under the Senior Credit Documents and the Senior Collateral Agent's intent to exercise exclusive authority with respect to the exercise of collateral remedies or any other collateral rights of CHG or Holdings, Holdings and CHG shall accept the Senior Collateral Agent's exercise of any or all of the collateral rights of CHG, on behalf of itself and the other Senior Creditors, under or with respect to any CHG Lease Facility Document, to the exclusion of CHG and the other Junior Creditors.
 
5.5     Step In Rights With Respect to the Management Services Agreement .  (a) The parties hereto acknowledge and agree that so long as the Discharge of Senior Facilities Obligations has not occurred, upon the occurrence and during the continuance of an Event of Default under the Senior Credit Documents, the Senior Collateral Agent may, in its sole discretion, and with exclusive authority, exercise, or refrain from exercising, collateral remedies and any and all other collateral rights of CHG, Holdings or the Borrower under the Management Services Agreement on behalf of the Senior Creditors, including the right to replace the "Manager" defined therein or to terminate the Management Services Agreement or take any other action under the Management Services Agreement that would otherwise be able to be taken by CHG, Holdings or the Borrower thereunder.  Upon notice by the Senior Collateral Agent to Holdings, the Borrower and CHG of the occurrence of an Event of Default under the Senior Credit Documents and the Senior Collateral Agent's intent to exercise exclusive authority with respect to the exercise of collateral remedies or any other collateral rights of CHG, Holdings or the Borrower, CHG, Holdings and the Borrower shall accept the Senior Collateral Agent's exercise of any or all of the collateral rights of CHG, Holdings or the Borrower, on behalf of itself and the other Senior Creditors, under or with respect to the Management Services Agreement, to the exclusion of CHG, Holdings and the Borrower.  The rights of the Senior Collateral Agent in this Section 5.5(a) are in addition to and not in limitation of the rights of the
 

 
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Senior Collateral Agent under Section 18.8 of the Management Services Agreement and the rights of the Senior Agent under Section 7.18 of the Senior Credit Agreement.
 
(b)     The parties hereto acknowledge and agree that following the Discharge of Senior Facilities Obligations and prior to the Discharge of CHG Lease Obligations, upon the occurrence and during the continuance of an Event of Default under the CHG Lease Facility Documents, CHG may, in its sole discretion, and with exclusive authority, exercise, or refrain from exercising, collateral remedies and any and all other collateral rights of Holdings or the Borrower under the Management Services Agreement on behalf of the Junior Creditors, including the right to replace the "Manager" defined therein or to terminate the Management Services Agreement or take any other action under the Management Services Agreement that would otherwise be able to be taken by Holdings or the Borrower thereunder.  Following the Discharge of the Senior Facilities Obligations, upon notice by CHG to Holdings and the Borrower of the occurrence of an Event of Default under the CHG Lease Facility Documents and CHG's intent to exercise exclusive authority with respect to the exercise of collateral remedies or any other collateral rights of Holdings or the Borrower, Holdings and the Borrower shall accept CHG's exercise of any or all of the collateral rights of Holdings or the Borrower, on behalf of itself and the other Junior Creditors, under or with respect to the Management Services Agreement, to the exclusion of Holdings and the Borrower.
 
5.6     Step In Rights With Respect to Exhibitor Agreements .  (a)  The parties hereto acknowledge and agree that so long as the Discharge of Senior Facilities Obligations has not occurred, upon the occurrence and during the continuance of an Event of Default under the Senior Credit Documents, the Senior Collateral Agent may, in its sole discretion, and with exclusive authority, exercise, or refrain from exercising, collateral remedies and any and all other collateral rights of CHG, Holdings or the Borrower under any Exhibitor Agreement on behalf of the Senior Creditors, including the right to terminate such Exhibitor Agreement or take any other action under such Exhibitor Agreement that would otherwise be able to be taken by CHG, Holdings or the Borrower thereunder.  Upon notice by the Senior Collateral Agent to Holdings, the Borrower and CHG of the occurrence of an Event of Default under the Senior Credit Documents and the Senior Collateral Agent's intent to exercise exclusive authority with respect to the exercise of collateral remedies or any other collateral rights of CHG, Holdings or the Borrower, CHG, Holdings and the Borrower shall accept the Senior Collateral Agent's exercise of any or all of the collateral rights of CHG, Holdings or the Borrower, on behalf of itself and the other Senior Creditors, under or with respect to such Exhibitor Agreement, to the exclusion of CHG, Holdings and the Borrower.
 
(b)     The parties hereto acknowledge and agree that following the Discharge of Senior Facilities Obligations and prior the Discharge of CHG Lease Obligations, upon the occurrence and during the continuance of an Event of Default under the CHG Lease Facility Documents, CHG may, in its sole discretion, and with exclusive authority, exercise, or refrain from exercising, collateral remedies and any and all other collateral rights of Holdings or the Borrower under any Exhibitor Agreement on behalf of the Junior Creditors, including the right to terminate such Exhibitor Agreement or take any other action under such Exhibitor Agreement that would otherwise be able to be taken by Holdings or the Borrower thereunder.  Following Discharge of the Senior Facilities Obligations, upon notice by CHG to Holdings and the Borrower of the occurrence of an Event of Default under the CHG Lease Facility Documents and
 

 
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CHG's intent to exercise exclusive authority with respect to the exercise of collateral remedies or any other collateral rights of Holdings or the Borrower, Holdings and the Borrower shall accept the CHG's exercise of any or all of the collateral rights of Holdings or the Borrower, on behalf of itself and the other Junior Creditors, under or with respect to such Exhibitor Agreement, to the exclusion of Holdings and the Borrower.
 
5.7     Step In Rights With Respect to Supply Agreements .  (a)  The parties hereto acknowledge and agree that so long as the Discharge of Senior Facilities Obligations has not occurred, upon the occurrence and during the continuance of an Event of Default under the Senior Credit Documents, the Senior Collateral Agent may, in its sole discretion, and with exclusive authority, exercise, or refrain from exercising, collateral remedies and any and all other collateral rights of Holdings, the Borrower or CHG under any Supply Agreement on behalf of the Senior Creditors, including the right to terminate such Supply Agreement or take any other action under such Supply Agreement that would otherwise be able to be taken by Holdings, the Borrower or CHG thereunder.  Upon notice by the Senior Collateral Agent to Holdings, the Borrower and CHG of the occurrence of an Event of Default under the Senior Credit Documents and the Senior Collateral Agent's intent to exercise exclusive authority with respect to the exercise of collateral remedies or any other collateral rights of Holdings, the Borrower or CHG, Holdings, the Borrower or CHG shall accept the Senior Collateral Agent's exercise of any or all of the collateral rights of Holdings, the Borrower or CHG, on behalf of itself and the other Senior Creditors, under or with respect to such Supply Agreement, to the exclusion of Holdings, the Borrower or CHG.
 
(b)     The parties hereto acknowledge and agree that following the Discharge of Senior Facilities Obligations and prior the Discharge of CHG Lease Obligations, upon the occurrence and during the continuance of an Event of Default under the CHG Lease Facility Documents, CHG may, in its sole discretion, and with exclusive authority, exercise, or refrain from exercising, collateral remedies and any and all other collateral rights of Holdings or the Borrower under any Supply Agreement on behalf of the Junior Creditors, including the right to terminate such Supply Agreement or take any other action under such Supply Agreement that would otherwise be able to be taken by Holdings or the Borrower thereunder.  Following Discharge of the Senior Facilities Obligations, upon notice by CHG to Holdings and the Borrower of the occurrence of an Event of Default under the CHG Lease Facilities Documents and CHG's intent to exercise exclusive authority with respect to the exercise of collateral remedies or any other collateral rights of Holdings or the Borrower, Holdings or the Borrower shall accept CHG's exercise of any or all of the collateral rights of Holdings or the Borrower, on behalf of itself and the other Junior Creditors, under or with respect to such Supply Agreement, to the exclusion of Holdings or the Borrower.
 
5.8     Step In Rights With Respect to Digital Cinema Deployment Agreements .  (a)  The parties hereto acknowledge and agree that, to the extent any step in rights described in this Section 5.8 are permitted under the applicable Digital Cinema Deployment Agreements, so long as the Discharge of Senior Facilities Obligations has not occurred, upon the occurrence and during the continuance of an Event of Default under the Senior Credit Documents, the Senior Collateral Agent may, in its sole discretion, and with exclusive authority, exercise, or refrain from exercising, collateral remedies and any and all other collateral rights of Holdings, the Borrower or CHG under any Digital Cinema Deployment Agreement on behalf of the Senior
 

 
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Creditors, including the right to terminate such Digital Cinema Deployment Agreement or take any other action under such Digital Cinema Deployment Agreement that would otherwise be able to be taken by Holdings, the Borrower or CHG thereunder.  Upon notice by the Senior Collateral Agent to Holdings, the Borrower and CHG of the occurrence of an Event of Default under the Senior Credit Documents and the Senior Collateral Agent's intent to exercise exclusive authority with respect to the exercise of collateral remedies or any other collateral rights of Holdings, the Borrower or CHG, Holdings, the Borrower or CHG shall accept the Senior Collateral Agent's exercise of any or all of the collateral rights of Holdings, the Borrower or CHG, on behalf of itself and the other Senior Creditors, under or with respect to such Digital Cinema Deployment Agreement, to the exclusion of Holdings, the Borrower or CHG.
 
(b)     The parties hereto acknowledge and agree that, to the extent any step in rights described in this Section 5.8 are permitted under the applicable Digital Cinema Deployment Agreements, following the Discharge of Senior Facilities Obligations and prior to the Discharge of the CHG Lease Obligations, upon the occurrence and during the continuance of an Event of Default under the CHG Lease Facility Documents, CHG may, in its sole discretion, and with exclusive authority, exercise, or refrain from exercising, collateral remedies and any and all other collateral rights of Holdings or the Borrower under any Digital Cinema Deployment Agreement on behalf of the Junior Creditors, including the right to terminate such Digital Cinema Deployment Agreement or take any other action under such Digital Cinema Deployment Agreement that would otherwise be able to be taken by Holdings or the Borrower thereunder.  Following the Discharge of the Senior Facilities Obligations, upon notice by CHG to Holdings and the Borrower of the occurrence of an Event of Default under the CHG Lease Facilities Documents and CHG's intent to exercise exclusive authority with respect to the exercise of collateral remedies or any other collateral rights of Holdings or the Borrower, Holdings or the Borrower shall accept CHG's exercise of any or all of the collateral rights of Holdings or the Borrower, on behalf of itself and the other Junior Creditors, under or with respect to such Digital Cinema Deployment Agreement, to the exclusion of Holdings or the Borrower.
 
SECTION 6 .   Payments .
 
6.1     Application of Proceeds . So long as the Discharge of Senior Facilities Obligations has not occurred, any proceeds of Shared Collateral pursuant to the enforcement of any Security Document or the exercise of any remedial provision thereunder or received in connection with the sale or other disposition of, or collection on, such Shared Collateral upon the exercise of remedies or any other realization upon the Shared Collateral, together with all other proceeds received by any Secured Creditor (including all funds received in respect of post-petition interest or fees and expenses) as a result of any such enforcement or the exercise of any such remedial provision or as a result of any distribution of or in respect of any Collateral (whether or not expressly characterized as such) upon or in any Insolvency or Liquidation Proceeding with respect to any Grantor, or the application of any Collateral (or proceeds thereof) to the payment thereof or any distribution of Collateral (or proceeds thereof) upon the liquidation or dissolution of any Grantor, shall be applied by the Senior Collateral Agent to the Senior Obligations in such order as specified in the relevant Senior Security Document.  Upon the Discharge of Senior Facilities Obligations, the Senior Collateral Agent shall deliver, without warranty or representation or recourse, to CHG any proceeds of Shared Collateral held by it in the same form as received, with any necessary endorsements or as a court of competent
 

 
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jurisdiction may otherwise direct, to be applied by CHG to the CHG Lease Obligations in such order as specified in the CHG Lease Security Documents.
 
6.2     Payments Over . Until such time as the Discharge of Senior Facilities Obligations has occurred, any Collateral or proceeds thereof (together with assets or proceeds subject to Liens referred to in the final sentence of Section 2.3(a) hereof) (or any distribution in respect of the Collateral, whether or not expressly characterized as such) received by CHG or any other Junior Creditor or the Borrower in connection with the exercise of any right or remedy (including setoff) relating to the Collateral or that is otherwise inconsistent with this Agreement shall be segregated and held in trust and forthwith paid over to the Senior Collateral Agent for the benefit of the Senior Creditors in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct.  The Senior Collateral Agent is hereby authorized to make any such endorsements as agent for CHG or any such Junior Creditor or the Borrower.  This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.
 
SECTION 7 .   Other Agreements .
 
7.1     Releases .
 
(a)   If, in connection with:
 
(i)     the exercise of the Senior Collateral Agent's remedies in respect of the Shared Collateral provided for in Section 5.1 hereof, including any sale, lease, exchange, transfer or other disposition (including, but not limited to, a sale under Section 363 of the Bankruptcy Code) of any such Shared Collateral (any of the foregoing, a " Remedial Action "); or
 
(ii)     any sale (including, but not limited to, a sale under Section 363 of the Bankruptcy Code), lease, exchange, transfer or other disposition of any Collateral that is permitted under the terms of the Senior Credit Documents;
 
there occurs the release by the Senior Collateral Agent, acting on its own or at the direction of the Required Senior Creditors, of any of its Liens on any part of the Shared Collateral, then such Liens, if any, of CHG and the other Junior Creditors, on such Shared Collateral (but not the proceeds thereof), shall be automatically and simultaneously released, and such Grantor shall have no further liability under the CHG Lease Facility Documents (to the extent of such released Shared Collateral), and CHG, for itself and on behalf of each Junior Creditor, promptly shall execute and deliver to the Senior Collateral Agent, without any representations or warranties (other than a representation that the CHG is duly authorized to execute and deliver such termination statements, releases or other documents), such termination statements, releases and other documents as the Senior Collateral Agent or such Grantor may reasonably request to effectively terminate its Liens on such Shared Collateral; provided that in connection with any such release of Liens the proceeds of the Shared Collateral received in connection therewith shall be applied to the Senior Obligations in accordance with Section 6.1 hereof.
 
(b)     Until the Discharge of Senior Facilities Obligations occurs, CHG, for itself and on behalf of the Junior Creditors, hereby irrevocably constitutes and appoints the Senior Collateral Agent and any officer or agent of the Senior Collateral Agent, with full power of
 

 
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substitution, as its true and lawful attorney-in-fact, coupled with an interest, with full and irrevocable power and authority in the place and stead of CHG or such Junior Creditor or in the Senior Collateral Agent's own name, from time to time in the Senior Collateral Agent's discretion, for the purpose of carrying out the terms of this Section 7.1 , to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Section 7.1 , including any endorsements or other instruments of transfer or release.
 
(c)     Nothing in this Agreement shall be construed in any way to limit or impair the right of (i) any Junior Creditor to bid for and purchase Shared Collateral at any private or judicial foreclosure upon such Shared Collateral initiated by any other secured creditor, (ii) the Junior Creditors to join (but not control) any foreclosure or other judicial lien enforcement proceeding with respect to such Shared Collateral initiated by the Senior Collateral Agent or the Senior Creditors, so long as it does not delay or interfere with the exercise by the Senior Collateral Agent or the Senior Creditors of their rights and (iii) subject to the terms of this Agreement, the Junior Creditors to receive payments from the proceeds of the collection, sale or other disposition of any Shared Collateral.
 
7.2     Insurance . The Senior Collateral Agent, on behalf of itself and the other Senior Creditors, and CHG, on behalf of itself and the other Junior Creditors, shall be named as additional insureds and each shall be named as loss payee on each policy required.  The parties agree that: (i) unless and until the Discharge of Senior Facilities Obligations has occurred, upon the occurrence and during the continuance of an Event of Default under the Senior Credit Documents, the Senior Collateral Agent (acting at the direction of the Required Senior Creditors) shall have the sole and exclusive right, subject to the rights of the Grantors under the Senior Credit Documents, to adjust settlement for any insurance policy covering the Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Collateral, (ii) unless and until the Discharge of Senior Facilities Obligations has occurred, and subject to the rights of the Grantors under the Senior Security Documents, all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) in respect to the Collateral shall be paid to the Senior Collateral Agent for the benefit of the Senior Creditors pursuant to the terms of the Senior Credit Documents (including, without limitation, for purposes of cash collateralization of commitments and Secured Hedging Documents) and thereafter, to the extent no Senior Facilities Obligations are outstanding, to CHG (in respect of any Shared Collateral) for the benefit of itself and the other Junior Creditors to the extent required under the CHG Lease Security Documents and subject to the rights of the Grantors under the CHG Lease Facility Documents and then, to the extent no CHG Lease Obligations are outstanding, to the owner of the subject property, to such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct and (iii) until the Discharge of Senior Facilities Obligations has occurred, if CHG or any Junior Creditor shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Agreement, it shall pay such proceeds over to the Senior Collateral Agent in accordance with the terms of Section 6.2 hereof.
 
7.3     Amendments to CHG Lease Facility Documents; Senior Documents . (a)  Prior to the Discharge of the Senior Facilities Obligations, neither CHG nor any Grantor shall
 

 
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waive, amend, supplement, restate or otherwise modify any term (or permit or consent to the waiver, amendment, supplement, restatement or modification of any term) of, or otherwise consent to any departure from any requirement of any CHG Lease Facility Document without not less than five (5) Business Days prior notice to the Senior Administrative Agent (or such shorter notice period acceptable to the Senior Administrative Agent in its sole discretion).
 
(b)     Prior to the Discharge of the Senior Facilities Obligations, neither CHG nor any Grantor shall waive, amend, supplement, restate or otherwise modify any term other than an immaterial waiver, amendment, supplement, restatement or other modification to such term that does not affect the obligations or rights of any party in any material respect (or permit or consent to the waiver, amendment, supplement, restatement or modification of any term other than an immaterial waiver, amendment, supplement, restatement or other modification to such term that does not affect the obligations or rights of any party in any material respect) of any CHG Lease Facility Document, or otherwise consent to any departure from any requirement of any CHG Lease Facility Document (other than an immaterial departure that does not affect the obligations or rights of any party in any material respect), without the prior written consent of the Senior Administrative Agent; provided that, with prior written notice to the Senior Administrative Agent pursuant to Section 7.3(a) above, (i) the CHG Lease Agreement (including any schedule thereto) may be amended to extend the scheduled final maturity date of the CHG Lease Obligations (or any Refinancing thereof permitted by Section 7.3(c) below)  described therein without the prior written consent of the Senior Administrative Agent so long as either (x) such amendment is necessary to prevent the occurrence of or cure an Event of Default under Section 9.1(o)(iv) of the Senior Credit Agreement or (y) such amendment does not waive, amend, supplement, restate or otherwise modify any other provision of any CHG Lease Facility Document, and (ii) any CHG Lease Security Document may be amended, supplemented or otherwise modified as necessary or appropriate in order to create, perfect, preserve and protect the security interest of CHG and the Junior Creditors in the CHG Lease Collateral and the rights and interests granted to CHG and the Junior Creditors under such CHG Lease Security Document, to carry into effect the purposes thereof or better to assure and confirm the validity, enforceability and priority of CHG's and the Junior Creditors' security interest in the CHG Lease Collateral in order to perfect, continue and maintain the validity, enforceability and priority of the security interest in the CHG Lease Collateral as provided therein and to preserve the other rights and interests granted to CHG and the Junior Creditors thereunder, subject to this Agreement, as against third parties, with respect to the CHG Lease Collateral.  Holdings, CHG, the Borrower, each other Grantor and the Junior Creditors each agree that each CHG Lease Security Document shall include the following language (or language to similar effect approved by the Senior Collateral Agent):
 
"Notwithstanding anything herein to the contrary, the lien and security interest granted to CHG and the Junior Creditors pursuant to this Agreement and the exercise of any right or remedy by CHG or the Junior Creditors hereunder are subject to the provisions of the Multiparty Agreement, dated as of October 18, 2011 (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the " Multiparty Agreement "), among Cinedigm Digital Funding 2, LLC, Cinedigm Digital Cinema Corp., CDF2 Holdings, LLC, the other grantors party from time to time thereto, CHG-Meridian U.S. Finance, Ltd., Société Générale, New York Branch, as Senior Administrative
 

 
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and Collateral Agent thereunder, Ballantyne Strong, Inc. and the other approved vendors from time to time party thereto.  In the event of any conflict between the terms of the Multiparty Agreement and this Agreement, the terms of the Multiparty Agreement shall govern and control."
 
(c)     Prior to the Discharge of Senior Facilities Obligations, the CHG Lease Facility Documents and Holding's obligations thereunder may not be Refinanced without the consent of the Required Senior Creditors in their sole discretion.
 
(d)     In the event the Senior Agent or the other Senior Creditors and the relevant Grantor(s) enter into any consent, waiver, amendment, supplement, restatement or other modification in respect of any of the Senior Documents, then such consent, waiver, amendment, supplement, restatement or other modification shall apply automatically to any comparable provision (including any such provision incorporated by reference or included by way of a cross-default provision) of any CHG Lease Facility Document and any CDF2 Loan Document without the consent of CHG, any other Junior Creditor or any Grantor and without any action by CHG, any other Junior Creditor or any Grantor; provided that (A) no such amendment, restatement, waiver or consent shall have the effect of removing assets subject to the Lien of the CHG Lease Security Documents, except to the extent that a release of such Lien is required by this Agreement, (B) the Senior Agent shall give not less than ten (10) days prior written notice of such consent, waiver, amendment, supplement, restatement or other modification to CHG (although the failure to give any such notice shall in no way affect the effectiveness of any such consent, waiver, amendment, supplement, restatement or other modification) and (C) no such consent, waiver, amendment, supplement, restatement or other modification shall be inconsistent with the terms of this Agreement or shall materially impair or otherwise materially adversely affect any rights or remedies that any Junior Creditor may have, subject to the terms of this Agreement, with respect to the CHG Lease Collateral.  Upon request of the Senior Agent, CHG, the other Junior Creditors and each Grantor, as applicable, shall enter into documentation in form and substance satisfactory to the Senior Agent to reflect any such consent, waiver, amendment, supplement, restatement or other modification of any such comparable provision of any CHG Lease Facility Document or CDF2 Loan Document; provided that the failure to document such consent, waiver, amendment, supplement, restatement or other modification shall in no way affect the effectiveness of such consent, waiver, amendment, supplement, restatement or other modification.
 
(e)     Without the prior written consent of CHG (which consent shall not be unreasonably withheld), the Senior Credit Agreement shall not be amended, restated, supplemented, modified or Refinanced to (i) increase the "Applicable Margin" (as defined in the Senior Credit Agreement) or similar component of the interest rate on the Senior Loans (excluding, for the avoidance of doubt, the accrual of default interest) by more than 200 basis points per annum, (ii) extend the scheduled final maturity date of the Senior Obligations or any Refinancing thereof beyond the final maturity date of the CHG Lease Obligations or any Refinancing thereof, (iii) increase the amount of, or accelerate (other than acceleration of maturity pursuant to an exercise of remedies), any scheduled amortization payments due under the Senior Credit Agreement or (iv) modify the "Use of Proceeds" covenant in Section 7.9 of the Senior Credit Agreement.
 

 
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7.4     Rights As Unsecured Creditors . Except as otherwise set forth in Section 2.1 , Section 5.1 , Section 8 or Section 9 of this Agreement, CHG and the Junior Creditors may exercise any and all rights and remedies as unsecured creditors in respect of the CHG Lease Obligations in accordance with the terms of the CHG Lease Facility Documents and applicable law.
 
7.5     Bailee for Perfection . (a) Until the Discharge of Senior Facilities Obligations, the Senior Collateral Agent agrees (i) to acquire, and hereby acknowledges it holds, all Pledged Collateral in its possession or control (or in the possession or control of its agents or bailees) on behalf of itself, the other Senior Creditors, the CDF2 Loan Creditors, CHG and the other Junior Creditors and any permitted assignee and (ii) to be the collateral agent on behalf of itself, the other Senior Creditors, the CDF2 Loan Creditors, CHG and the Junior Creditors and any permitted assignee with respect to any deposit account or securities account included in the Pledged Collateral, in each case, solely for the purpose of perfecting the security interest granted in such Pledged Collateral under the Senior Documents, the CDF2 Loan Documents and the CHG Lease Facility Documents, subject to the terms and conditions of this Section 7.5 .
 
(b)     Until the Discharge of Senior Obligations has occurred, the Senior Collateral Agent shall be entitled to deal with the Pledged Collateral in its possession or under its control in accordance with the terms of the Senior Documents and this Agreement as if the Liens of the CDF2 Loan Creditors under the CDF2 Loan Security Documents and CHG and the other Junior Creditors under the CHG Lease Security Documents did not exist.  The rights of the CDF2 Loan Creditors and CHG and the other Junior Creditors shall at all times be subject to the terms of this Agreement and to the Senior Collateral Agent's rights under the Senior Credit Documents.
 
(c)     The Senior Collateral Agent shall have no obligation whatsoever to the CDF2 Loan Creditors, CHG or the other Junior Creditors to assure that the Pledged Collateral in its possession or under its control is genuine or owned by any of the Grantors or to preserve rights or benefits of any Person except as expressly set forth in this Section 7.5 .  The duties or responsibilities of the Senior Collateral Agent under this Section 7.5 shall be limited solely to holding the Pledged Collateral as bailee, and controlling deposits accounts and securities accounts as collateral agent, in each case, in accordance with this Section 7.5 .
 
(d)     The Senior Collateral Agent, acting pursuant to this Section 7.5 , shall not have by reason of the CDF2 Loan Security Documents, the CHG Lease Security Documents, this Agreement or any other document, a fiduciary relationship in respect of the CDF2 Loan Creditors, CHG or any Junior Creditor.
 
(e)     Upon the Discharge of Senior Facilities Obligations, the Senior Collateral Agent shall deliver the remaining Pledged Collateral (if any) (or proceeds thereof) together with any necessary endorsements, first , to CHG, if any CHG Lease Obligations remain outstanding, and second , to the Borrower or the relevant Grantor if no CHG Lease Obligations remain outstanding (in each case, so as to allow such Person to obtain possession or control of such Pledged Collateral).  The Senior Collateral Agent further agrees to take all other action reasonably requested by such Person in connection with such Person's obtaining a first-priority interest in the Pledged Collateral or as a court of competent jurisdiction may otherwise direct.
 

 
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(f)     If any Pledged Collateral is delivered to CHG under Section 7.5(e) above, then, upon the Discharge of CHG Lease Obligations, CHG shall deliver the remaining Pledged Collateral (if any) (or proceeds thereof) together with any necessary endorsements, to the Borrower or the relevant Grantor (in each case, so as to allow such Person to obtain possession or control of such Pledged Collateral). CHG further agrees to take all other action reasonably requested by Borrower to allow such Person to obtain possession or control of such Pledged Collateral or as a court of competent jurisdiction may otherwise direct.
 
(g)     Each of the Borrower, CHG and each Junior Creditor authorizes the Senior Collateral Agent, on behalf of itself and the other Senior Creditors, to exercise all of such Person's rights as a secured creditor with respect to the Holdings Operating Account under the CDF2 Loan Documents or the CHG Lease Facility Documents, as the case may be, and agrees to take all lawful actions under the CDF2 Loan Documents or the CHG Lease Facility Documents, as the case may be, as the Senior Collateral Agent may direct with respect to the Holdings Operating Account.
 
7.6     When Discharge of Senior Facilities Obligations and CHG Lease Obligations Deemed to Not Have Occurred . (a)  If prior to or concurrently with the Discharge of Senior Facilities Obligations, the Borrower enters into any Refinancing of any Senior Document evidencing a Senior Obligation, then such Discharge of Senior Facilities Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement, and the obligations under such Refinancing Senior Document shall automatically be treated as Senior Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Shared Collateral set forth herein, and the collateral agent under such Senior Documents shall be the Senior Collateral Agent for all purposes of this Agreement. Upon receipt of a notice from the Senior Agent stating that the Borrower has entered into a new Senior Credit Document (which notice shall include the identity of the new agent, such agent, the " New Agent "), CHG and the Borrower shall promptly enter into such documents and agreements (including amendments or supplements to this Agreement) as the Borrower or such New Agent may reasonably request in order to provide to the New Agent the rights contemplated hereby, in each case consistent in form and substance with the terms of this Agreement.
 
(b)     If prior to or concurrently with the Discharge of CHG Lease Obligations, Holdings enters into any Refinancing of any CHG Lease Facility Document evidencing a CHG Lease Obligation, then such Discharge of CHG Lease Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement, and the obligations under such Refinancing CHG Lease Facility Document shall automatically be treated as CHG Lease Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Shared Collateral set forth herein. Upon receipt of a notice from CHG stating that Holdings has entered into a new CHG Lease Facility Document (which notice shall include the identity of the New Agent under such CHG Lease Facility Documents), the Senior Agents and Holdings shall promptly enter into such documents and agreements (including amendments or supplements to this Agreement) as the Holdings or such New Agent may reasonably request in order to provide to the New Agent the rights contemplated hereby, in each case consistent in form and substance with the terms of this Agreement.
 

 
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(c)     Notwithstanding the provisions of any Specified Senior Debt, Specified Subordinated Debt or of Section 8 of this Agreement, (A) any Refinancing of Specified Senior Obligations is permitted in amounts that exceed the outstanding balance of such Specified Senior Obligations and (B) if the proceeds of any Refinancing Specified Senior Obligations exceed the sum of (i) the principal amount of the Refinanced Specified Senior Obligations, (ii) accrued interest with respect to such Refinanced Specified Senior Obligations and (iii) the fees and expenses and other amounts payable by the relevant Grantor(s) in connection with such Refinancing, then the Grantors shall offer to prepay the Specified Subordinated Debt in an amount equal to such excess, in descending order of the payment priority set forth in this Agreement, with (x) the amount of any such offered prepayment that is declined by the Specified Subordinated Creditors at the more senior levels of such payment priority to be offered successively to the Specified Subordinated Creditors at the more junior levels of such payment priority and (y) the procedure for such offers, acceptances and declinations to be reasonably determined by the Grantors at such time.
 
7.7     Option to Purchase Senior Obligations . (a) Without prejudice to the enforcement of remedies by the Senior Creditors, CHG shall have the right to purchase by way of assignment (and shall thereby also assume all commitments and duties of the Senior Creditors), at any time during the exercise period described in clause (c) below of this Section 7.7 , all, but not less than all, of the Senior Obligations (other than the Senior Obligations of a Defaulting Creditor), including all principal of and interest and fees on and all prepayment or acceleration penalties and premiums in respect of all Senior Obligations, outstanding at the time of purchase; provided that at the time of (and as a condition to) any purchase pursuant to this Section 7.7 , all commitments pursuant to any then outstanding Senior Credit Agreement shall have terminated and all Secured Hedging Documents shall also have been terminated in accordance with their terms. Any purchase pursuant to this Section 7.7(a) shall be made as follows:
 
(i)     for a purchase price equal to the sum of (A) in the case of all loans, advances or other similar extensions of credit that constitute Senior Obligations, 100% of the principal amount thereof and all accrued and unpaid interest thereon through the date of purchase, (B) in the case of any Secured Hedging Document, the aggregate amount then owing to each Secured Hedging Counterparty thereunder pursuant to the terms of the respective Secured Hedging Document, including without limitation all amounts owing to such Secured Hedging Counterparty as a result of the termination (or early termination) thereof plus (C) all unpaid fees, expenses, indemnities and other amounts which are then due and payable to the various Senior Creditors, pursuant to the terms of the various Senior Documents;
 
(ii)     the purchase price described in preceding clause (a)(i) shall be payable in cash on the date of purchase by CHG (without recourse and without any representation or warranty whatsoever, whether as to the enforceability of any Senior Obligation or the validity, enforceability, perfection, priority or sufficiency of any Lien securing, or guarantee or other supporting obligation for, any Senior Obligation or as to any other matter whatsoever, except the representation and warranty that the transferor owns free and clear of all Liens and encumbrances (other than participation interests not prohibited by the Senior Credit Agreement, in which case the purchase price described in preceding clause (a)(i) shall be appropriately adjusted so that CHG does not pay amounts represented by any participation
 

 
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interest which remains in effect), and has the right to convey, whatever claims and interests it may have in respect of the Senior Obligations);
 
(iii)     the payment of the purchase price described in preceding clause (a)(i) shall be accompanied by a waiver of any and all manner of actions, causes of action, suits, debts, controversies, damages, judgments, executions, claims (including without limitation crossclaims, counterclaims and rights of set-off and recoupment) and demands whatsoever, whether known or unknown, whether now existing or hereafter arising, whether asserted or unasserted, in contract, tort, law or equity which CHG (on behalf of itself and the other Junior Creditors and their successors and assigns) has or may have against any of the Senior Creditors or their respective subsidiaries, parents, affiliates, officers, directors, employees, agents, attorneys, partners, successors and assigns, both present and former (collectively, the " Senior Creditor Affiliates ") by reason of any action, failure to act, matter or thing whatsoever arising from or based on facts occurring prior to the date of such purchase;
 
(iv)     the payment of all amounts payable to the various Senior Creditors in respect of the assignments described above shall be distributed to them by the Senior Administrative Agent in accordance with their respective holdings of the various Senior Obligations; and
 
(v)     such purchase shall be made pursuant to assignment documentation in form and substance reasonably satisfactory to, and prepared by counsel for, the Senior Administrative Agent (with the cost of such counsel to be paid by CHG); it being understood and agreed that the Senior Administrative Agent and each other Senior Creditor shall retain all rights to indemnification as provided in the relevant Senior Credit Documents pursuant to the provisions of this Section 7.7 .
 
(b)     The right to exercise the purchase option described in Section 7.7(a) above shall be exercisable and legally enforceable upon at least seven (7) Business Days' prior written notice of exercise (which notice, once given, shall be irrevocable and fully binding on CHG) given to the Senior Administrative Agent and the Borrower by CHG.  Neither the Senior Administrative Agent nor any other Senior Creditor shall have any disclosure obligation to CHG or any other Junior Creditor in connection with any exercise of such purchase option.
 
(c)     The right to purchase the Senior Obligations as described in this Section 7.7 may be exercised (by giving the irrevocable written notice described in preceding clause (b) ) during the period that (1) begins on the date that is five (5) Business Days after the first to occur of (x) the date of the acceleration of the final maturity of the Senior Loans under the Senior Credit Agreement, (y) the occurrence of the final maturity of the Senior Loans under the Senior Credit Agreement or (z) the occurrence of an Insolvency or Liquidation Proceeding with respect to any Grantor which constitutes an Event of Default under the Senior Credit Agreement (in each case, so long as the acceleration, failure to pay amounts due at final maturity or such Insolvency or Liquidation Proceeding constituting an Event of Default has not been rescinded or cured within such five (5) Business Day period, and so long as any unpaid amounts constituting Senior Obligations remain owing); provided that if there is any failure to meet the condition described in the proviso of preceding clause (a) hereof, the aforementioned date shall be extended until the first date upon which such condition is satisfied, and (2) ends on the 20th Business Day after the
 

 
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start of the period described in clause (1) above (it being understood and agreed that the delivery of any notice of exercise pursuant to Section 7.7(b) above within such 20 Business Day period shall constitute an exercise of the option and that CHG shall have a reasonable period of time beyond the 20 Business Day period described in this clause (2) to execute and deliver documentation affecting such option exercise).
 
(d)     The obligations of the Senior Creditors to sell their respective Senior Obligations under this Section 7.7 are several and not joint and several. To the extent any Senior Creditor (a " Defaulting Creditor ") breaches its obligation to sell its Senior Obligations under this Section 7.7 , nothing in this Section 7.7 shall be deemed to require the Senior Administrative Agent or any other Senior Creditor to purchase such Defaulting Creditor's Senior Obligations for resale to CHG and in all cases, the Senior Administrative Agent and each Senior Creditor complying with the terms of this Section 7.7 shall not be deemed to be in default of this Agreement or otherwise be deemed liable for any action or inaction of any Defaulting Creditor; provided that nothing in this clause (d) shall require CHG to purchase less than all of the Senior Obligations.
 
(e)     Each Grantor irrevocably consents to any assignment effected to CHG in accordance with this Section 7.7 for purposes of all Senior Credit Documents and hereby agrees that no further consent from such Grantor shall be required.
 
7.8     CHG Right to Cure .  (a)  Notwithstanding anything to the contrary contained in this Agreement or the Senior Credit Documents,
 
(i)     after the occurrence and during the continuance of any Event of Default described in Section 9.1(a ) of the Senior Credit Agreement, at any time during the period beginning with the day such Event of Default occurs and ending on the earlier to occur of (A) five Business Days after the occurrence of the payment Event of Default under the Senior Credit Agreement and (B) the date the Senior Collateral Agent commences an Enforcement Action (provided that, at the Senior Collateral Agent's sole discretion, CHG may exercise its cure right set forth in this Section 7.8(a)(i) up to the end of the five Business Day grace period set forth in the foregoing clause (A) notwithstanding the Senior Collateral Agent's commencement of an Enforcement Action), CHG shall have the right to cure such default on behalf of the Borrower, and if such right is exercised, the applicable Event of Default that would have otherwise occurred but for the exercise of CHG's cure right shall be deemed not to have occurred for the purposes of the Senior Documents; provided that any cure payment made by CHG pursuant to this Section 7.8(a)(i) shall be paid to the Senior Administrative Agent for the benefit of the Senior Lenders and shall be deemed (x) a corresponding payment of Rent owed by Holdings to CHG and the other Junior Creditors under the CHG Lease Facility Documents and (y) a corresponding payment by CHG of its obligations owed to the Borrower under the CDF2 Loan Documents.
 
(ii)     in the event that the Borrower fails to comply with the requirements of Section 5.3 of the Senior Credit Agreement at the end of any Fiscal Quarter, at any time until the 15th day after the date on which a Compliance Certificate is required to be delivered with respect to such Fiscal Quarter thereunder, CHG shall have the right to prepay Senior Term Loans on behalf of the Borrower, and if such right is exercised, such prepayment
 

 
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shall be deemed to have occurred prior to the end of such Fiscal Quarter for purposes of determining compliance with such  Section 5.3 .  If, after giving effect to the foregoing recalculation, the Borrower shall then be in compliance with the requirements of such  Section 5.3 , the Borrower shall be deemed to have satisfied the requirements of such  Section 5.3 as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of such  Section 5.3 that would have otherwise occurred but for such prepayment of the Senior Term Loans shall be deemed not to have occurred for the purposes of the Senior Documents; provided that any cure payment made by CHG pursuant to this Section 7.8(a)(ii) shall be paid to the Senior Administrative Agent for the benefit of the Senior Lenders and shall be deemed (x) a corresponding payment by Holdings of its Rent obligations owed to CHG and the other Junior Creditors under the CHG Lease Facility Document and (y) a prepayment by CHG of its corresponding obligations owed to the Borrower under the CDF2 Loan Documents; and
 
(iii)     in the event the Borrower fails to comply with the requirements of Section 5.4 of the Senior Credit Agreement at the end of any Fiscal Quarter, at any time until the 15th day after the date on which a Compliance Certificate is required to be delivered with respect to such Fiscal Quarter thereunder, CHG shall have the right to prepay Senior Term Loans on behalf of the Borrower, and if such right is exercised, such prepayment shall be deemed to have occurred prior to the end of such Fiscal Quarter and to have constituted a scheduled principal payment during such Fiscal Quarter for purposes of determining compliance with such Section 5.4 .  If, after giving effect to the foregoing recalculation, the Borrower shall then be in compliance with the requirements of such  Section 5.4 , the Borrower shall be deemed to have satisfied the requirements of such  Section 5.4 as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of such  Section 5.4 that would have otherwise occurred but for such prepayment of the Senior Term Loans shall be deemed not to have occurred for the purposes of the Senior Documents; provided that any cure payment made by CHG pursuant to this Section 7.8(a)(iii) shall be paid to the Senior Administrative Agent for the benefit of the Senior Lenders and shall be deemed (x) a corresponding payment by Holdings of its Rent obligations owed to CHG and the other Junior Creditors under the CHG Lease Facility Document and (y) a prepayment by CHG of its corresponding obligations owed to the Borrower under the CDF2 Loan Documents.
 
(b)     The parties hereto hereby acknowledge that  Section 7.8(a)(ii) and Section 7.8(a)(iii) above may not be relied on for purposes of calculating the Consolidated Leverage Ratio or the Consolidated Fixed Charge Coverage Ratio other than as applicable to Sections 5.3 and 5.4 , respectively, of the Senior Credit Agreement.
 
7.9     Deliveries under CHG Lease Facility Documents .  CHG agrees to deliver to the Senior Administrative Agent a copy of all financial statements, reports and other informational documents received by CHG from Holdings pursuant to the CHG Lease Facility Documents, in each case promptly after CHG's receipt thereof from Holdings.
 
7.10     CHG Right to Assign . (a) Notwithstanding any provision of any CHG Lease Facility Document or this Agreement to the contrary, CHG agrees that, prior to the end of the Availability Period, it shall not assign or otherwise transfer any of its rights or obligations
 

 
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under the CHG Lease Facility Documents to any Person without the prior written consent of the Senior Administrative Agent and the Administrative Servicer (which consent shall not be unreasonably withheld, it being understood that if the proposed rights or obligations to be transferred consist of unfunded obligations under the CHG Lease Facility Documents, it shall not be unreasonable for the Senior Administrative Agent or the Administrative Servicer to withhold such consent based on actual or perceived financial capacity or creditworthiness of any proposed assignee), and that absent such consents CHG shall be the sole holder of the CHG Lease Obligations prior to the end of the Availability Period.  Any purported assignment in violation of this paragraph shall be null and void.
 
(b)     Each of CHG, for itself and each Junior Creditor, and each Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents) agrees that, after the end of the Availability Period, no Junior Creditor shall assign its rights and obligations under the CHG Lease Agreement unless such Junior Creditor also assigns a proportionate amount of its rights and obligations under the CDF2 Loan Documents.  The Borrower consents to any assignment by CHG or a Junior Creditor of its rights and obligations under the CDF2 Loan Documents made in satisfaction of the preceding sentence and in compliance with the CDF2 Loan Documents.  Any purported assignment in violation of this paragraph shall be null and void.
 
7.11     Vendor Note Assignment .  Each Approved Vendor acknowledges it obligations under, and agrees to comply with, Section 9.6 of its respective Supply Agreement and acknowledges and agrees that such Section is enforceable by each of the parties to this Agreement.
 
7.12     Applicable Tax Amount .  Prior to payment of the initial invoice under any Supply Agreement, Holdings agrees to obtain a resale exemption with respect to Installed Digital Systems purchased or to be purchased under the Supply Agreements, and will provide a resale certificate number or other evidence thereof reasonably acceptable to the applicable Approved Vendor, CHG, and the Specified Senior Agent.  Prior to payment of each invoice under each Supply Agreement (including the initial invoice), the applicable Approved Vendor and CHG shall (a) agree on the amount of sales tax that would have been payable on the Installed Digital Systems subject to such invoice absent such exemption (the " Applicable Tax Amount "), determined based upon the then-applicable Fully Installed Purchase Price for Installed Digital Systems and the then-applicable effective sales tax rates in the applicable jurisdictions, and (b) disclose the Applicable Tax Amount and associated computations to the Specified Senior Agent, which shall be binding on the Specified Senior Agent and all other parties hereto absent manifest error.
 
SECTION 8 .   Subordination Provisions .
 
8.1     Subordination of Liabilities .  Each Specified Subordinated Creditor, for itself, and its successors and assigns, covenants and agrees, that the Specified Subordinated Debt, and the payment of the principal of, interest on, and all other amounts owing in respect thereof is hereby expressly subordinated to the extent and in the manner hereinafter set forth, to the prior payment in full in cash, of all Specified Senior Debt.  This Section 8 shall constitute a continuing offer to all Persons who, in reliance upon such provisions, become payees of, or continue to hold,
 

 
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Specified Senior Debt, and such provisions are made for the benefit of the payees and holders of Specified Senior Debt, and such payees and holders are hereby made obligees hereunder to the same extent as if their names were written herein as such, and they and/or each of them may proceed to enforce such provisions
 
8.2     Grantors Not to Make Payments with Respect to Specified Subordinated Debt in Certain Circumstances; Remedies . (a) Except as expressly set forth in Sections 4.4 and 4.5 hereof and this Section 8 and as expressly required pursuant to Section 3.3 hereof, until payment in full in cash of all Specified Senior Debt shall have occurred and the Specified Senior Debt and all outstanding commitments of each holder of Specified Senior Debt for the advancing of additional Specified Senior Debt shall have terminated, without the prior written consent of the Specified Senior Agent, the relevant Grantor shall not make, and the Specified Subordinated Creditors shall not accept, take or receive, by payment in cash or in kind, by way of set-off or in any other manner, the whole or any part of any amount owing in respect of the Specified Subordinated Debt.
 
(b)     In the event that, notwithstanding the provisions of the preceding Section 8.2(a) , the relevant Grantor shall make any payment on account of (or the Specified Subordinated Creditor receives any payment on account of) the Specified Subordinated Debt at a time when payment is not permitted by said Section 8.2(a) , such payment shall be held by the Specified Subordinated Creditor in trust for the benefit of, and shall be paid forthwith over and delivered to, the Specified Senior Agent for application to the payment of all Specified Senior Debt remaining unpaid to the extent necessary to pay all Specified Senior Debt in full in cash in accordance with the terms of such Specified Senior Debt, after giving effect to any concurrent payment or distribution to or for the payees or holders of Specified Senior Debt.
 
(c)     Until the Specified Repayment Date shall have occurred, no Specified Subordinated Creditor shall, without the prior written consent of the Specified Senior Agent, (A) accelerate, demand or otherwise make due and payable prior to the original due date thereof any portion of the Specified Subordinated Debt, (B) commence, prosecute or participate in any lawsuit, action or proceeding, whether private, judicial, equitable, administrative or otherwise (including any Insolvency or Liquidation Proceeding) against the Grantors or their assets; provided that, the Specified Subordinated Creditor may vote, file a proof of claim (such proof of claim to indicate the subordination set forth herein) and otherwise act with respect to the Specified Subordinated Debt in any Insolvency or Liquidation Proceeding involving any Grantor, (C) exercise any rights or remedies as against the Grantors' assets, (D) possess any of the Grantors' assets, sue for an attachment, an injunction, a custodian, receiver, trustee, assignee, liquidator or similar official in any Insolvency or Liquidation Proceeding or any other legal or equitable remedy, exercise any rights of set off or recoupment against any Grantor or its assets, or otherwise take any action whatsoever, directly or indirectly, to collect any amounts on the Specified Subordinated Debt from any Grantor or any of its assets, or (E) commence or cause to be commenced or join with any creditor in commencing any case or proceeding against any Grantor pursuant to any Insolvency or Liquidation Proceeding.
 
8.3     Subordination to Prior Payment of All Specified Senior Debt, Dissolution, Liquidation or Reorganization of Grantor .  In the event of any Insolvency or Liquidation Proceeding:
 

 
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(a)     all payees and holders of Specified Senior Debt shall first be entitled to receive payment in full in cash of all Specified Senior Debt (including, without limitation, post petition interest at the rate provided in the documentation with respect to the Specified Senior Debt whether or not such post-petition interest is an allowed claim against the debtor in any bankruptcy or similar proceeding) before the Specified Subordinated Creditor is entitled to receive any payment of any kind or character in respect of the Specified Subordinated Debt;
 
(b)     any payment or distributions of assets of any Grantor of any kind or character, whether in cash, property or securities to which the Specified Subordinated Creditor would be entitled except for this Section 8 , shall be paid by the liquidating trustee or agent or other Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or other trustee or agent, directly to the Specified Senior Agent to the extent necessary to make payment in full in cash of all Specified Senior Debt remaining unpaid after giving effect to any concurrent payment or distribution to the payees and holders of the Specified Senior Debt;
 
(c)     in the event that, notwithstanding the foregoing provisions of this Section 8.3 , any payment or distribution of assets of any Grantor of any kind or character, whether they be cash, property or securities, shall be received by the Specified Subordinated Creditor in respect of the Specified Subordinated Debt before all Specified Senior Debt is paid in full in cash, such payment or distribution shall be received and held in trust for and shall forthwith be paid over to the Specified Senior Agent for application to the payment of the Specified Senior Debt until all Specified Senior Debt shall have been paid in full in cash, after giving effect to any concurrent payment or distribution to the payees and holders of the Specified Senior Debt; and
 
(d)     without in any way modifying this Section 8 or affecting the subordination effected hereby if the hereafter referenced notice is not given, the Grantors shall give prompt written notice to the Specified Subordinated Creditors of any Insolvency or Liquidation Proceeding to which any Grantor or its assets are subject.
 
8.4     Obligations of the Grantors Unconditional .  Nothing contained in this Section 8 is intended to or shall impair, as between the relevant Grantor and the relevant Specified Subordinated Creditor, the obligation of such Grantor, which is absolute and unconditional, to pay to such Specified Subordinated Creditor the principal of and interest on the relevant Specified Subordinated Debt as and when the same shall become due and payable in accordance with its terms, or is intended to or shall affect the relative rights of such Specified Subordinated Creditor and other creditors of the Grantors other than the holders of the Specified Senior Debt, nor, except as specifically provided herein, shall anything herein or therein prevent such Specified Subordinated Creditor from exercising all remedies otherwise permitted by applicable law upon an event of default under the Specified Subordinated Debt, subject to the rights, if any, under this Section 8 of the holders of Specified Senior Debt in respect of cash, property, or securities of the Grantors received upon the exercise of any such remedy.  Upon any distribution of assets of the Grantors, the Specified Subordinated Creditor shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which Insolvency or Liquidation Proceeding is pending, or a certificate of the liquidating trustee or agent or other Person making any distribution to the Specified Subordinated Creditor, for the purpose of ascertaining the Persons entitled to participate in such distribution, holders of the Specified
 

 
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Senior Debt and the Grantors, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 8 .
 
8.5     Subordination Rights Not Impaired by Acts or Omissions of the Grantors or Holders of Specified Senior Debt .  No right of any present or future payees or holders of any Specified Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Grantor or by any act or failure to act in good faith by any such payees or holders, or by any noncompliance by any Grantor with the terms and provisions of this Section 8 , regardless of any knowledge thereof which any such payees or holders may have or be otherwise charged with.  The payees and holders of the Specified Senior Debt may, without in any way affecting the obligations of the Specified Subordinated Creditor with respect hereto, at any time or from time to time and in their absolute discretion, change the manner, place or terms of payment of, change or extend the time of payment of, or increase, Refinance or alter, any Specified Senior Debt or amend, modify or supplement any agreement or instrument governing or evidencing such Specified Senior Debt or any other document referred to therein, or exercise or refrain from exercising any other of their rights under the Specified Senior Debt including, without limitation, the waiver of a default or event of default thereunder and the release of any collateral securing such Specified Senior Debt, all without notice to or assent from the Specified Subordinated Creditor.
 
8.6     Reinstatement .  If, at any time, all or part of any payment with respect to Specified Senior Debt theretofore made by any Grantor or any other Person is rescinded or must otherwise be returned by the holders of Specified Senior Debt for any reason whatsoever (including, without limitation, an Insolvency or Liquidation Proceeding with respect to such Grantor or such other Persons), this Section 8 set forth herein shall continue to be effective and be reinstated, as the case may be, all as though such payment had not been made.
 
8.7     Waivers of Specified Subordinated Creditors .  (a)  Each Specified Subordinated Creditor waives (i) any and all notice of the creation, renewal, extension or accrual of any of the Specified Senior Debt, (ii) notice of or proof of reliance by any Specified Senior Creditor upon this Section 8 and (iii) protest, demand for payment and notice of default.
 
(b)     Each Specified Subordinated Creditor expressly waives any right to require the Specified Senior Agent or the Specified Senior Creditors to marshal assets or collateral for the Specified Senior Debt or otherwise to compel the Senior Administrative Agent or any of the Specified Senior Creditors to seek recourse against or satisfaction of the Specified Senior Debt from one source before seeking recourse or satisfaction from the relevant collateral or any other source.
 
8.8     Assignment of the Specified Subordinated Debt .  Each Specified Subordinated Creditor agrees that until the Specified Senior Debt shall have been fully paid and the Specified Senior Debt and all outstanding commitments of each Specified Senior Creditor for the advancing of additional Specified Senior Debt shall have terminated, such Specified Subordinated Creditor will not assign, transfer or otherwise dispose of its Specified Subordinated Debt or any portion thereof unless such assignment, transfer or other disposition is made expressly subject to this Agreement, and the assignee or transferee expressly acknowledges in an instrument delivered to the Specified Senior Agent that the Specified Subordinated Debt is being
 

 
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assigned or transferred subject to the terms of this Agreement.  Any purported assignment, transfer or disposition in violation of this paragraph shall be null and void.
 
8.9     Amendments to the Specified Subordinated Debt .  Except as otherwise provided in Section 7.3 hereof with respect to the CHG Lease Facility Documents, neither any Specified Subordinated Creditor nor any Grantor shall agree to amend or otherwise modify or alter any provision of any Specified Subordinated Debt (in any material respect if such Specified Subordinated Debt is the Second Subordinated Notes) without the prior written consent of the Specified Senior Agent.
 
8.10     SG Advisory Fee Note .  All parties hereto acknowledge and agree that the obligations owed by the Borrower to SG under the SG Advisory Fee Note are not secured by a Lien on Collateral, but shall constitute Senior Obligations for purposes of this Section 8 .
 
SECTION 9 .   Insolvency or Liquidation Proceeding .
 
9.1     Finance and Sale Issues . (a)  Until the Discharge of the Senior Facilities Obligations has occurred, if the Borrower or any other Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Senior Collateral Agent (acting at the direction of the Required Senior Creditors) shall desire to permit the use of Cash Collateral (as defined in Section 363(a) of the Bankruptcy Code) on which the Senior Collateral Agent has a Lien or to permit the Borrower or any other Grantor to obtain financing (including on a priming basis), whether from the Senior Creditors or any other third party, under Section 362 , 363 or 364 of the Bankruptcy Code or any other Bankruptcy Law (each, a " Post-Petition Financing "), then CHG, on behalf of itself and the other Junior Creditors, and each other Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents), agrees that it will not oppose or raise any objection to or contest (or join with or support any third party opposing, objecting to or contesting), such use of Cash Collateral or Post-Petition Financing and will not request adequate protection or any other relief in connection therewith (except as expressly agreed in writing by the Senior Collateral Agent or to the extent permitted by Section 9.3 hereof) so long as such use of Cash Collateral or Post-Petition Financing is approved by a United States Bankruptcy Court.  To the extent the Liens securing the Senior Obligations are subordinated to or pari passu with such Post-Petition Financing, the Liens of CHG and the Junior Creditors on the Shared Collateral shall be deemed to be subordinated, without any further action on the part of any Person, to the Liens securing such Post-Petition Financing (and all obligations relating thereto), and the Liens securing the CHG Lease Obligations shall have the same priority with respect to the Shared Collateral relative to the Liens securing the Senior Obligations as if such Post-Petition Financing had not occurred.  Notwithstanding the foregoing, CHG and the other Junior Creditors may oppose or object to such use of Cash Collateral or Post-Petition Financing on the same bases as an unsecured creditor, so long as such opposition or objection is not based on the Junior Creditors' status as secured creditors.
 
(b)     Until the Discharge of the Senior Facilities Obligations has occurred, CHG, on behalf of itself and the other Junior Creditors, and each other Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents), agrees that it will raise no objection to, oppose or contest (or join with or support any third Person opposing, objecting to or contesting), and shall be deemed to consent to, a sale or other disposition of any Shared
 

 
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Collateral free and clear of its Liens or other claims under Section 363 of the Bankruptcy Code if the Senior Creditors have consented to such sale or disposition of such assets; provided that (i) the proceeds of such disposition are applied in accordance with Section 6.1 and (ii) CHG, on behalf of itself and the other Junior Creditors, may raise any objections to any such disposition of Shared Collateral that could be raised by any creditor of the Grantors whose claims were not secured by any Liens on the Shared Collateral so long as such objections are not based on CHG's and the other Junior Creditors' status as secured creditors; provided , however , that in any sale or disposition conducted pursuant to a post-petition auction process, CHG and the other Junior Creditors shall retain their rights under Section 363(k) of the Bankruptcy Code to the extent that their bid is in excess of the allowed claim of the Senior Creditors (it being specifically understood that CHG and the other Junior Creditors shall be required to pay an amount equal to that portion of their bid up to the allowed claim of the Senior Creditors in cash).
 
9.2     Relief from the Automatic Stay . Until the Discharge of Senior Facilities Obligations has occurred, CHG, on behalf of itself and the other Junior Creditors, and each other Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents), agrees that none of them shall seek relief, pursuant to Section 362(d) of the Bankruptcy Code or otherwise, from the automatic stay of Section 362(a) of the Bankruptcy Code or from any other stay in any Insolvency or Liquidation Proceeding in respect of the Shared Collateral, without the prior written consent of the Senior Collateral Agent.
 
9.3     Adequate Protection . (a) CHG, on behalf of itself and the other Junior Creditors, and each other Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents), agrees that none of them shall oppose, object to or contest (or join with or support any third party opposing, objecting to or contesting) (i) any request by the Senior Collateral Agent or the other Senior Creditors for adequate protection in any Insolvency or Liquidation Proceeding (or any granting of such request) or (ii) any objection by the Senior Collateral Agent or the other Senior Creditors to any motion, relief, action or proceeding based on the Senior Collateral Agent or the other Senior Creditors claiming a lack of adequate protection.
 
(b)     Notwithstanding the foregoing provisions in this Section 9.3 , in any Insolvency or Liquidation Proceeding:
 
(1)     if the Senior Creditors (or any subset thereof) are granted adequate protection in the form of additional collateral in connection with any Cash Collateral use or Post-Petition Financing, then CHG, on behalf of itself or any of the Junior Creditors, may seek or request adequate protection in the form of a Lien on such additional collateral without the Senior Creditors objecting to or contesting such Lien, provided such Lien will be subordinated to the Liens securing the Senior Obligations and such Cash Collateral use or Post-Petition Financing (and all obligations relating thereto) on the same basis as the other Liens securing the CHG Lease Obligations are so subordinated to the Senior Obligations under this Agreement; and
 
(2)     in the event CHG, on behalf of itself or any of the other Junior Creditors, seeks or requests adequate protection in respect of CHG Lease Obligations and such adequate protection is granted in the form of additional collateral, then CHG, on
 

 
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behalf of itself and any of the Junior Creditors, agrees that the Senior Collateral Agent shall also be granted a senior Lien on such additional collateral as security for the Senior Obligations and for any Cash Collateral use or Post-Petition Financing provided by the Senior Creditors and that any Lien on such additional collateral securing the CHG Lease Obligations shall be subordinated to the Lien on such collateral securing the Senior Obligations and any such Post-Petition Financing provided by the Senior Creditors (and all obligations relating thereto) and to any other Liens granted to the Senior Creditors as adequate protection on the same basis as the other Liens securing the CHG Lease Obligations are so subordinated to such Senior Obligations under this Agreement. Except as otherwise expressly set forth in Section 9.1 or in connection with the exercise of remedies with respect to the Collateral, nothing herein shall limit the rights of CHG or the Junior Creditors from seeking adequate protection with respect to their rights in the Shared Collateral in any Insolvency or Liquidation Proceeding (including adequate protection in the form of a cash payment, periodic cash payments or otherwise).
 
(3)     if any of the Senior Creditors are granted adequate protection in the form of an administrative claim in connection with any Post-Petition Financing or use of Cash Collateral, then CHG, on behalf of itself or any of the Junior Creditors, may seek or request adequate protection in the form of an administrative claim without the Senior Creditors objecting to or contesting such administrative claim status; provided such administrative claim will be subordinated to the administrative claim of the Senior Creditors.
 
(4)     in the event CHG, on behalf of itself or any of the other Junior Creditors, is granted adequate protection in the form of an administrative claim in connection with any Post-Petition Financing or use of Cash Collateral, then the Senior Agent, on behalf of itself and the other Senior Creditors, shall also be entitled to seek or request, without objection from CHG or any other Junior Creditor, adequate protection in the form of an administrative claim, which administrative claim, if obtained, shall be senior to the administrative claim of CHG and the other Junior Creditors.
 
9.4     No Waiver; Voting Rights . Subject to Section 9.3 , nothing contained herein shall prohibit or in any way limit the Senior Collateral Agent or any Senior Creditor from objecting on any basis in any Insolvency or Liquidation Proceeding or otherwise to any action taken by CHG or any other Junior Creditor, including the seeking by CHG or any other Junior Creditor of adequate protection or the assertion by CHG or any other Junior Creditor of any of its rights and remedies under the CHG Lease Facility Documents or otherwise.
 
9.5     Preference Issues . If any Specified Senior Creditor is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of the Borrower or any other Grantor any amount (a " Recovery "), then the Specified Senior Obligations shall be reinstated to the extent of such Recovery and the Specified Senior Creditors shall be entitled to a reinstatement of such Specified Senior Obligations with respect to all such recovered amounts. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement.
 

 
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9.6     Post-Petition Interest . (a) Neither CHG nor any other Junior Creditor nor any Specified Subordinated Creditor shall oppose or seek to challenge any claim by the Senior Collateral Agent or any other Senior Creditor for allowance in any Insolvency or Liquidation Proceeding of Senior Obligations consisting of post-petition interest, fees or expenses. Regardless of whether any such claim for post-petition interest, fees or expenses is allowed or allowable, and without limiting the generality of the other provisions of this Agreement, this Agreement is expressly intended to include and does include the "rule of explicitness" in that this Agreement expressly entitles the Senior Creditors, and is intended to provide the Senior Creditors with the right, to receive payment of all post-petition interest, fees or expenses through distributions made pursuant to the provisions of this Agreement even though such interest, fees and expenses are not allowed or allowable against the bankruptcy estate of the Borrower or any other Grantor under Section 502(b)(2) or Section 506(b) of the Bankruptcy Code or under any other provision of the Bankruptcy Code or any other Bankruptcy Law.
 
(b)     Neither the Senior Collateral Agent nor any other Senior Creditor nor any Specified Subordinated Creditor shall oppose or seek to challenge any claim by CHG or any other Junior Creditor for allowance in any Insolvency or Liquidation Proceeding of CHG Lease Obligations consisting of post-petition interest, fees or expenses so long as the Senior Creditors are receiving post-petition interest, fees or expenses in at least the same form being requested by the Junior Creditors and then only to the extent of the value of the Lien of CHG on behalf of the Junior Creditors on the Shared Collateral (after taking into account the value of the Lien of the Senior Collateral Agent on behalf of the Senior Creditors on the Shared Collateral); provided , however , to the extent that any such payments are later recharacterized as payments of principal by the applicable bankruptcy court, such payments shall, upon such recharacterization, be turned over to the Senior Creditors and applied to the Senior Obligations in accordance with Section 6 hereof.
 
(c)     Without limiting the foregoing, it is the intention of the parties hereto that (and to the maximum extent permitted by law the parties hereto agree that) the Senior Obligations (and the security therefor) constitute a separate and distinct class (and separate and distinct claims) from the CHG Lease Obligations (and the security therefor).
 
9.7     Waiver . CHG, for itself and on behalf of the other Junior Creditors, waives any claim it may hereafter have against any Senior Creditor arising out of the election by any Senior Creditor of the application to the claims of any Senior Creditor of Section 1111(b)(2) of the Bankruptcy Code, and/or out of any Cash Collateral or Post-Petition Financing arrangement or out of any grant of a security interest in connection with the Shared Collateral in any Insolvency or Liquidation Proceeding.
 
9.8     Limitations . So long as the Discharge of Senior Facilities Obligations has not occurred, without the express written consent of the Senior Collateral Agent, none of the Junior Creditors shall (or shall join with or support any third party making, opposing, objecting or contesting, as the ease may be), in any Insolvency or Liquidation Proceeding involving any Grantor, (i) oppose, object to or contest the determination of the extent of any Liens held by any of the Senior Creditors or the value of any claims of Senior Creditors under Section 506(a) of the Bankruptcy Code or (ii) oppose, object to or contest the payment to the Senior Creditors of interest, fees or expenses under Section 506(b) of the Bankruptcy Code.
 

 
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SECTION 10 .   Reliance; Waivers; Etc .
 
10.1     Reliance . Other than any reliance on the terms of this Agreement, each Specified Senior Agent, on behalf of itself and the Specified Senior Creditors, acknowledges that it and the other Specified Senior Creditors have, independently and without reliance on any Specified Subordinated Creditors, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the documents relating to such Specified Senior Facility and be bound by the terms of this Agreement, and they will continue to make their own credit decision in taking or not taking any action under such documents or this Agreement. Each Specified Subordinated Creditor acknowledges that it has independently and without reliance on the Specified Senior Agent or any other Specified Senior Creditor, and based on documents and information deemed by them appropriate, made its own credit analysis and decision to enter into each of the documents relating to the Specified Subordinated Debt and be bound by the terms of this Agreement and it will continue to make its own credit decision in taking or not taking any action under such documents or this Agreement.
 
10.2     No Warranties or Liability . The Senior Collateral Agent, on behalf of itself and the Senior Creditors under the Senior Documents, acknowledges and agrees that each of CHG and the other Junior Creditors has made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the CHG Lease Facility Documents, the ownership of any Shared Collateral or the perfection or priority of any Liens thereon. The Junior Creditors will be entitled to manage and supervise their respective loans and extensions of credit under the CHG Lease Facility Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. CHG, on behalf of itself and the Junior Creditors, acknowledges and agrees that each of the Senior Collateral Agent and the Senior Creditors has made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Senior Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon. The Senior Creditors will be entitled to manage and supervise their respective loans and extensions of credit under their respective Senior Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. The Senior Collateral Agent and the Senior Creditors shall have no duty to CHG or any of the Junior Creditors to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of an event of default or default under any agreements with the Borrower or any other Grantor (including under the Senior Documents), regardless of any knowledge thereof which they may have or be charged with. CHG and the Junior Creditors shall have no duty to the Senior Collateral Agent or any of the Senior Creditors to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of an event of default under any agreements with the Borrower or any Grantor (including under the CHG Lease Facility Documents), regardless of any knowledge thereof which they may have or be charged with.
 
10.3     No Waiver of Lien Priorities . (a) No right of the Senior Creditors, the Senior Collateral Agent or any of them to enforce any provision of this Agreement or any Senior Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Borrower or any other Grantor or by any act or failure to act by any Senior Creditor or the Senior Collateral Agent, or by any noncompliance by any Person with the terms,
 

 
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provisions and covenants of this Agreement, any of the Senior Documents or any of the CHG Lease Facility Documents, regardless of any knowledge thereof which the Senior Collateral Agent or the Senior Creditors, or any of them, may have or be otherwise charged with.
 
(b)     Without in any way limiting the generality of the foregoing paragraph (but except as otherwise provided in this Agreement and subject to the rights of the Borrower and the other Grantors under the Senior Documents), the Senior Creditors, the Senior Collateral Agent and any of them may, at any time and from time to time in accordance with the Senior Documents and/or applicable law, without the consent of, or notice to, CHG or any other Junior Creditor, without incurring any liabilities to CHG or any other Junior Creditor and without impairing or releasing the Lien and debt priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of CHG or any Junior Creditors is affected, impaired or extinguished thereby) do any one or more of the following:
 
(i)     make loans and advances to any Grantor or guaranty or otherwise extend credit to any Grantor, in any amount and on any terms, whether pursuant to a commitment or as a discretionary advance and whether or not any default or event of default or failure of condition is then continuing;
 
(ii)     change the manner, place or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase or alter, the terms of any of the Senior Obligations or any Lien on any Senior Collateral or guaranty thereof or any liability of the Borrower or any other Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Senior Obligations, without any restriction as to the amount, tenor or terms of any such increase or extension) or otherwise amend, Refinance, exchange, extend, modify or supplement in any manner any Liens held by the Senior Collateral Agent or any of the Senior Creditors, in respect of the Senior Obligations or any of the Senior Documents;
 
(iii)     sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the Senior Collateral or any liability of the Borrower or any other Grantor to the Senior Creditors or the Senior Collateral Agent, or any liability incurred directly or indirectly in respect thereof;
 
(iv)     settle or compromise any Senior Obligation or any other liability of the Borrower or any other Grantor or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability (including the Senior Obligations) in any manner or order;
 
(v)     exercise or delay in or refrain from exercising any right or remedy against the Borrower or any other Grantor or any other Person or with respect to any security, elect any remedy and otherwise deal freely with the Borrower, any other Grantor or any Senior Collateral and any security and any guarantor or any
 

 
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liability of the Borrower or any other Grantor to the Senior Creditors or any liability incurred directly or indirectly in respect thereof; and
 
(vi)     release or discharge any Senior Obligation or any guaranty thereof or any agreement or obligation of any Grantor or any other Person with respect thereto.
 
(c)     Until the Discharge of Senior Facilities Obligations, CHG, on behalf of itself and the other Junior Creditors, and each other Junior Creditor (by its acceptance of the benefits of the CHG Lease Facility Documents), agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Senior Collateral or any other similar rights a junior secured creditor may have under applicable law.
 
10.4     Waiver of Liability . CHG, on behalf of itself and the Junior Creditors, also agrees that the Senior Creditors and the Senior Collateral Agent shall have no liability to CHG or any other Junior Creditors, and CHG, on behalf of itself and the other Junior Creditors, hereby waives any claim against any Senior Creditor or the Senior Collateral Agent, arising out of any and all actions which the Senior Creditors or the Senior Collateral Agent may take or permit or omit to take, in each case other than to the extent undertaken in breach of this Agreement or applicable law, with respect to: (i) the Senior Documents other than this Agreement (including, without limitation, any failure to perfect or obtain perfected security interests in the Senior Collateral), (ii) the collection of the Senior Obligations or (iii) the foreclosure upon, or sale, liquidation or other disposition of, any Senior Collateral. CHG, on behalf of itself and the Junior Creditors, agrees that the Senior Creditors and the Senior Collateral Agent have no duty, express or implied, fiduciary or otherwise, to them in respect of the maintenance or preservation of the Senior Collateral, the Senior Obligations or otherwise. Neither the Senior Collateral Agent nor any other Senior Creditor nor any of their respective directors, officers, employees or agents will be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so, or will be under any obligation to sell or otherwise dispose of any Collateral upon the request of Holdings, the Borrower or any other Grantor or upon the request of CHG, any other holder of CHG Lease Obligations or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. Without limiting the foregoing, CHG and each Junior Creditor by accepting the benefits of the CHG Lease Facility Documents agrees that neither the Senior Collateral Agent nor any other Senior Creditor (in directing the Senior Collateral Agent to take any action with respect to the Collateral) shall have any duty or obligation to realize first upon any type of Collateral or to sell, dispose of or otherwise liquidate all or any portion of the Collateral in any manner, including as a result of the application of the principles of marshaling or otherwise, that would maximize the return to any class of creditors holding Senior Obligations, CDF2 Loan Obligations or CHG Lease Obligations, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by such class of creditors from such realization, sale, disposition or liquidation.
 
10.5     Obligations Unconditional . All rights, interests, agreements and obligations of the Senior Collateral Agent and the other Senior Creditors and CHG and the other
 

 
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Junior Creditors, respectively, hereunder (including the Lien priorities established hereby) shall remain in full force and effect irrespective of:
 
(a)     any lack of validity or enforceability of any Senior Document or any CHG Lease Facility Document;
 
(b)     except as otherwise set forth in this Agreement, any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Obligations or CHG Lease Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Senior Document or any CHG Lease Facility Document;
 
(c)     except as otherwise set forth in this Agreement, any exchange of any security interest in any Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Senior Obligations or CHG Lease Obligations or any guarantee thereof;
 
(d)     the commencement of any Insolvency or Liquidation Proceeding in respect of Holdings, the Borrower or any other Grantor; or
 
(e)     any other circumstances which otherwise might constitute a defense available to, or a discharge of, Holdings, the Borrower or any other Grantor (other than payment in full under the terms of the Senior Documents and/or the CHG Lease Facility Documents, as applicable) in respect of the Senior Obligations or of CHG or any other Junior Creditor in respect of this Agreement.
 
SECTION 11 .   Miscellaneous .
 
11.1     Conflicts . In the event of any conflict between the provisions of this Agreement and the provisions of the Senior Facilities Documents, the CHG Lease Facility Documents or the Subordinated Notes, the provisions of this Agreement shall govern and control.
 
11.2     Effectiveness; Continuing Nature of this Agreement; Severability . This Agreement shall become effective when executed and delivered by the parties hereto. This is a continuing agreement of subordination and the Specified Senior Creditors may continue, at any time and without notice to the Specified Subordinated Creditors, to extend credit and other financial accommodations and lend monies to or for the benefit of Holdings, the Borrower or any other Grantor constituting Specified Senior Obligations in reliance hereon.  Each Specified Subordinated Creditor hereby agrees that it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement, and waives any right it may have under applicable law to revoke this Agreement or any of the provisions of this Agreement. The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding. Without limiting the generality of the foregoing, this Agreement is intended to constitute and shall be deemed to constitute a "subordination agreement" within the meaning of Section 510(a) of the Bankruptcy
 

 
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Code and is intended to be and shall be interpreted to be enforceable to the maximum extent permitted pursuant to applicable non-bankruptcy law. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. All references to Holdings, the Borrower or any other Grantor shall include Holdings, the Borrower or such Grantor as debtor and debtor-in-possession and any receiver or trustee for Holdings, the Borrower or any other Grantor (as the case may be) in any Insolvency or Liquidation Proceeding.  This Agreement shall terminate and be of no further force and effect, (i) with respect to the holders of the Second Subordinated Notes, upon Discharge of Second Subordinated Notes, (ii) with respect to the holders of the First Subordinated Notes, upon Discharge of First Subordinated Notes, (iii) with respect to CHG and the other Junior Creditors, upon Discharge of the CHG Lease Obligations and (iv) with respect to the Senior Agent and the other Senior Facilities Creditors, upon Discharge of Senior Facilities Obligations, in each case, subject to the rights of the Specified Senior Creditors under Section 9.5 hereof.
 
11.3     Amendments; Waivers . No amendment, modification or waiver of any of the provisions of this Agreement shall be made unless the same shall be in writing signed on behalf of each party hereto; provided that (a) additional Grantors may be added as parties hereto in accordance with the provisions of Section 11.18 of this Agreement, and (b) that the consent of the holders of the Subordinated Notes shall not be required for any such amendment, modification or waiver (other than any amendment, modification or waiver of any provision of Section 8 hereof that directly affects such holder's rights, interests, liabilities or privileges or imposes additional obligations on such holder).  Notwithstanding anything to contrary contained herein, no amendment, modification or waiver of the rights of Approved Vendors to payments under Sections 4.4(g) , 4.5(g) or 4.9 hereof with respect to amounts owing under Supply Agreements shall be made, or be effective, without the signed written consent of the Approved Vendors.  Each waiver of the terms of this Agreement, if any, shall be a waiver only with respect to the specific instance involved and shall not impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. Notwithstanding the foregoing, no Grantor shall have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent its rights, interests, liabilities or privileges are directly affected or imposes additional obligations on a Grantor.
 
11.4     Information Concerning Financial Condition of the Grantors and their Subsidiaries . Each party to this Agreement shall each be responsible for keeping themselves informed of (a) the financial condition of the Grantors and their Subsidiaries and all endorsers and/or guarantors of the Senior Facilities Obligations, the CHG Lease Obligations or the Subordinated Notes and (b) all other circumstances bearing upon the risk of nonpayment of the Senior Facilities Obligations, the CHG Lease Obligations or the Subordinated Notes.  No party hereto (other than Holdings, the Borrower and any other Grantors, to the extent set forth in the Senior Facilities Documents, the CHG Lease Facility Documents and the Subordinated Notes) shall have a duty to advise any other party hereto of information known to it or them regarding such condition or any such circumstances or otherwise.  In the event any such party undertakes at any time or from time to time to provide any such information to any other party or parties, such party shall be under no obligation (w) to make, and such other party shall not make, any express
 

 
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or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (x) to provide any additional information or to provide any such information on any subsequent occasion, (y) to undertake any investigation or (z) to disclose any information which, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.
 
11.5     Subrogation .  Subject to the prior payment in full in cash of all Specified Senior Debt, the Specified Subordinated Creditors shall be subrogated to the rights of the payees and holders of Specified Senior Debt to receive payments or distributions of assets of the relevant Grantors applicable to such Specified Senior Debt until all amounts owing on the Specified Subordinated Debt shall be paid in full, and for the purpose of such subrogation no payments or distributions to the holders of the Specified Senior Debt by or on behalf of any Grantor or by or on behalf of the Specified Subordinated Creditors by virtue of this Agreement which otherwise would have been made to the Specified Subordinated Creditors shall, as between the Grantors, their creditors other than the payees and holders of Specified Senior Debt, and the Specified Subordinated Creditors, be deemed to be payment by the relevant Grantor to or on account of the Specified Subordinated Debt, it being understood that this Agreement is and is intended solely for the purpose of defining the relative rights of the Specified Subordinated Creditors, on the one hand, and the payees and holders of the Specified Senior Debt, on the other hand.
 
11.6     Application of Payments . Subject to the terms of the Senior Security Documents, all payments received by the Senior Collateral Agent or the other Senior Creditors may be applied, reversed and reapplied, in whole or in part, to such part of the Senior Obligations as the Senior Creditors, in their sole discretion, deem appropriate.  Subject to Section 7.3(e) hereof, CHG, on behalf of itself and the Junior Creditors, assents to any extension or postponement of the time of payment of the Senior Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or, subject to the terms of Section 7.1(a) hereof, release of any security constituting Shared Collateral which may at any time secure any part of the Senior Obligations and to the addition or release of any other Person primarily or secondarily liable therefor; provided that the Senior Collateral Agent, on behalf of itself and the other Senior Creditors, and CHG, on behalf of itself and the other Junior Creditors, agree that the Grantors shall not substitute or exchange any security constituting Shared Collateral under this Section 11.6 , unless it has also granted or contemporaneously grants a Lien on such substituted or exchanged asset or property to secure the CHG Lease Obligations and has taken all actions to perfect such new Liens.
 
11.7     SUBMISSION TO JURISDICTION; WAIVERS . (a) THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR 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 FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
 

 
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CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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.
 
(b)     THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH EACH MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN SECTION 11.7(a) HEREOF. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
 
(c)     EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR ANY OF 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 PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON 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, THE SENIOR DOCUMENTS, THE CDF2 LOAN DOCUMENTS, THE CHG LEASE FACILITY DOCUMENTS AND THE SUBORDINATED NOTES BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
11.8     Notices . All notices to the Junior Creditors and the Senior Facilities Creditors permitted or required under this Agreement may be sent to CHG and the Senior Collateral Agent, respectively.  Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, electronically mailed or sent by a nationally recognized courier service or U.S. mail and shall be deemed to have been given when delivered in person or by such courier service, upon receipt of electronic mail or five (5) Business Days after deposit in the U.S. mail (registered or certified, with first class postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto shall be as set forth below each party's name on the signature pages hereto, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.
 
11.9     Further Assurances . Each of the Senior Agent, on behalf of itself and the Senior Creditors under the Senior Documents, CHG, on behalf of itself and the Junior Creditors,
 

 
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the Borrower and each other Grantor, agrees that each of them shall take such further action and shall execute and deliver, at the Borrower's expense, such additional documents and instruments (in recordable form, if requested) as the Senior Agent or CHG may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement.
 
11.10     APPLICABLE LAW . THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
11.11     Binding on Successors and Assigns . This Agreement shall be binding upon the Senior Agent, the other Senior Creditors, CHG, the other Junior Creditors, the Approved Vendors, Cinedigm, Holdings, the Borrower and any other Grantors and their respective successors and assigns; provided that no Grantor may assign any of its rights or obligations under this Agreement without the prior written consent of the Senior Agent and CHG, and the Senior Agent, the Senior Creditors, CHG, the other Junior Creditors, the Approved Vendors and Cinedigm may assign their rights and obligations under this Agreement to the extent permitted by the Senior Facilities Documents, the CHG Lease Facility Documents and the Subordinated Notes, as the case may be.
 
11.12     Specific Performance . Each Specified Senior Creditor and each Specified Subordinated Creditor may demand specific performance of this Agreement.  Each of the Specified Senior Creditor and each Specified Subordinated Creditor hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by such Specified Senior Creditor or such Specified Subordinated Creditor, as the case may be, it being understood and agreed that (x) each Specified Senior Creditor's and/or each Specified Subordinated Creditors' damages from their respective actions, as the case may be, may at that time be difficult to ascertain and may be irreparable, and (y) each Specified Senior Creditor and each Specified Subordinated Creditor waives any defense that the Grantors and/or the Specified Senior Creditors and/or the Subordinated Junior Creditors, as the case may be, cannot demonstrate damage and/or be made whole by the awarding of damages.
 
11.13     Headings . Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.
 
11.14     Counterparts . This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single, contract. Delivery of an executed counterpart of a signature page of this Agreement or any document or instrument delivered in connection herewith by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.
 
11.15     Authorization . By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement on behalf of such party.
 

 
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11.16     No Third Party Beneficiaries; Effect of Agreement . This Agreement and the rights and benefits hereof shall inure to the benefit of each of the Senior Agent, on behalf of itself and the other Senior Creditors, CHG, on behalf of itself and the other Junior Creditors, Cinedigm, the Approved Vendors and their respective successors and assigns. No other Person shall have or be entitled to assert rights or benefits hereunder. Nothing in this Agreement shall impair the obligations of Holdings, the Borrower and the other Grantors to pay principal, interest, fees and other amounts owed with respect to the Senior Obligations, the CDF2 Loan Obligations, the CHG Lease Obligations, the First Subordinated Notes and the Second Subordinated Notes.
 
11.17     Provisions Solely to Define Relative Rights . The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the Specified Senior Creditors, on the one hand, and the Specified Subordinated Creditors, on the other hand.  Except as expressly set forth herein, none of Holdings, the Borrower, any other Grantor or any other creditor thereof shall have any rights hereunder. Nothing in this Agreement is intended to or shall impair the obligations of Holdings, the Borrower or any other Grantor, which are absolute and unconditional, to pay the Specified Senior Obligations and the Specified Subordinated Obligations as and when the same shall become due and payable.
 
11.18     Additional Grantors; Joinders .  (a)  It is understood and agreed that Parent Holdings, Holdings, the Borrower and each other Grantor on the date of this Agreement shall constitute the original Grantors party hereto.  The original Grantors hereby covenant and agree to cause each Subsidiary of Parent Holdings which becomes a Grantor under a Senior Facilities Document and a CHG Lease Security Document after the date hereof to contemporaneously become a party hereto (as a Grantor) by executing and delivering a counterpart hereof to the Specified Senior Agent or by executing and delivering a joinder or assumption agreement in form and substance reasonably satisfactory to the Specified Senior Agent.  The parties hereto further agree that, notwithstanding any failure to take the actions required by the immediately preceding sentence, each Person which becomes a Grantor under a Senior Facilities Document or a CHG Lease Security Document at any time (and any security granted by any such Person) shall be subject to the provisions hereof as fully as if same constituted a Grantor party hereto and had complied with the requirements of the immediately preceding sentence.
 
(b)     It is understood and agreed that Ballantyne on the date hereof shall constitute the original Approved Vendor.  Additional Persons who become Approved Vendors after the date hereof, pursuant to the terms of the Senior Credit Agreement, shall become a party hereto by executing and delivering a counterpart hereof to the Specified Senior Agent or by executing and delivering a joinder or assumption agreement in form and substance reasonably satisfactory to the Specified Senior Agent, contemporaneously with such Approved Vendors' entry into a Supply Agreement with Holdings.
 
(c)     Permitted successors and assigns pursuant to Section 11.11 hereof shall execute and deliver a counterpart hereof to the Specified Senior Agent or execute and deliver a joinder or assumption agreement in form and substance reasonably satisfactory to the Specified Senior Agent; provided however that this Agreement shall remain binding on such successors and assigns despite any failure to execute and deliver such counterpart, joinder or assumption agreement.
 

 
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11.19     The Senior Agents and CHG . (a) The Grantors hereby acknowledge that, solely as between the Grantors, the Senior Agents and CHG, all of the rights, privileges, protections, indemnities and immunities afforded (i) CHG under the CHG Lease Facility Documents and (ii) the Senior Agents under the Senior Credit Agreement and the other Senior Documents are hereby incorporated herein by reference as if set forth herein, in full.
 
(b)     Each party hereto hereby acknowledges and agrees that each of the Senior Agents and CHG are entering into this Agreement solely in their capacity under the Senior Credit Documents and the CHG Lease Facility Documents, respectively, and not in their individual capacity.
 
(c)     The Senior Agents shall not be deemed to owe any fiduciary duty to CHG or the other Junior Creditors, on the one hand, and CHG shall not be deemed to owe any fiduciary duty to the Senior Agents or the other Senior Creditors, on the other hand. With respect to CHG and the other Junior Creditors, each of the Senior Agents undertakes to perform, or to observe only such of its covenants and obligations as are specifically set forth in this Agreement and no implied covenants or obligations with respect to the CHG or the other Junior Creditors shall be read into this Agreement against the Senior Agents. With respect to the Senior Agents and the other Senior Creditors, CHG undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Agreement and no implied covenants or obligations with respect to the Senior Agents or the other Senior Creditors shall be read into this Agreement against CHG.
 
(d)     The provisions of this Section 11.19 shall survive the termination of this Agreement.
 
11.20     Relationship of Creditors . Nothing set forth herein shall create or evidence a joint venture, partnership or an agency or fiduciary relationship among the payees and holders of the Senior Facilities Obligations, the CHG Lease Obligations and/or the Subordinated Notes.  None of the payees and holders of the Senior Facilities Obligations, the CHG Lease Obligations and/or the Subordinated Notes (other than any Grantors) or any of their respective directors, officers, or agents or employees shall be responsible to any other party hereto or to any other person or entity for any Grantor's solvency, financial condition or ability to repay the Senior Obligations, the CHG Lease Obligations or Subordinated Notes, or for statements of any Grantor, oral or written, or for the validity, sufficiency or enforceability of the documents relating to the Senior Facilities Obligations, the CHG Lease Obligations and the Subordinated Notes, or any security interests granted by any Grantor to any Secured Creditor in connection therewith.  Each Specified Senior Creditor and each Specified Subordinated Creditor has entered into its respective financing agreements with the Grantors based upon its own independent investigation, and neither the Specified Senior Agent nor any other agent for any Specified Subordinated Creditors makes any warranty or representation to any other agent, or the creditors for which it acts as agent, nor does it rely upon any representation of any other agent, or the creditors for which it acts as agent, with respect to matters identified or referred to in this Agreement.
 

 
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IN WITNESS WHEREOF, the parties hereto have executed this Multiparty Agreement as of the date first written above.
 
     

Notice Address :
 
55 Madison Ave., Suite 300
Morristown, NJ  07960
Attn: Adam Mizel
Facsimile: 973.290.0081
Telephone:  646.375.3382
 
CINEDIGM DIGITAL FUNDING 2, LLC, as Borrower
 
 
 
By: /s/ Gary S. Loffredo                                                                 
Name: Gary S. Loffredo
Title: General Counsel and Secretary
 
     
 
 
  Signature Page to Multiparty Agreement

 


Notice Address :
 
55 Madison Ave., Suite 300
Morristown, NJ  07960
Attn: Adam Mizel
Facsimile: 973.290.0081
Telephone:  646.375.3382
 
ACCESS DIGITAL CINEMA PHASE 2 CORP., as Grantor
 
 
 
By: / s/ Gary S. Loffredo                                                                 
Name: Gary S. Loffredo
Title: Secretary
 
 
 
 
Signature Page to Multiparty Agreement

 


Notice Address :
 
55 Madison Ave., Suite 300
Morristown, NJ  07960
Attn: Adam Mizel
Facsimile: 973.290.0081
Telephone:  646.375.3382
 
CDF2 HOLDINGS, LLC, as Grantor
 
 
 
By: / s/ Gary S. Loffredo                                                                 
Name: Gary S. Loffredo
Title: President
 
 
 
 
Signature Page to Multiparty Agreement

 


Notice Address :
 
55 Madison Ave., Suite 300
Morristown, NJ  07960
Attn: Adam Mizel
Facsimile: 973.290.0081
Telephone:  646.375.3382
 
CINEDIGM DIGITAL CINEMA CORP.
 
 
 
By: /s/ Gary S. Loffredo                                                                 
Name: Gary S. Loffredo
Title: General Counsel and Secretary
 
 
 
 
Signature Page to Multiparty Agreement

 


Notice Address :
 
21800 Oxnard Street, Suite 400
Woodland Hills, CA 91367
Attn:  John Sandoval
Facsimile:  818.702.1800
Telephone:  818.702.1821
 
CHG-MERIDIAN U.S. FINANCE, LTD.,
as Junior Creditor
 
 
 
By: /s/ John P. Sandoval                                                                 
Name: John P. Sandoval
Title: Executive Vice President
 
 
 
 
Signature Page to Multiparty Agreement

 


Notice Address :
 
1221 Avenue of the Americas
New York, NY 10020
Attention: Justine Dupont-Nivet
Facsimile: 212.278.6136
Telephone: 212.278.5915
 
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH, as Senior Agent
 
 
 
By:       /s/ Richard O. Knowlton                                                     
Richard O. Knowlton
Managing Director
 
 

 
Signature Page to Multiparty Agreement

 


Notice Address :
 
1221 Avenue of the Americas
New York, NY 10020
Attention: Justine Dupont-Nivet
Facsimile: 212.278.6136
Telephone: 212.278.5915
 
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH, as CHG Lease Collateral Agent
 
 
 
By:        /s/ Richard O. Knowlton                                                           
Richard O. Knowlton
Managing Director
 
 
 
 
Signature Page to Multiparty Agreement

 


Notice Address :
 
1221 Avenue of the Americas
New York, NY 10020
Attention: Justine Dupont-Nivet
Facsimile: 212.278.6136
Telephone: 212.278.5915
 
 
SOCIÉTÉ GÉNÉRALE, NEW YORK BRANCH, as CDF2 Loan Collateral Agent
 
 
 
By:       /s/ Richard O. Knowlton                                                           
Richard O. Knowlton
Managing Director
 
 

 
Signature Page to Multiparty Agreement

 


Notice Address :
 
4350 McKinley Street
Omaha, NE 68112
Attention:  Chris Stark
Facsimile:  402-453-7238
Telephone:  402-453-4444
 
With a copy to:
 
Myron J. Kaplan
McGill, Gotsdiner, Workman & Lepp, P.C.
11404 W. Dodge Road, Suite 500
Omaha, NE  68154
 
 
BALLANTYNE STRONG, INC., as Approved Vendor
 
 
 
By: /s/ Christopher Stark                                                                 
Name: Christopher Stark
Title: Senior VP & COO
 


 
Signature Page to Multiparty Agreement

 

EXHIBIT 10.3
 
Execution Version

LESSOR HAS ASSIGNED OR GRANTED A SECURITY INTEREST IN THIS MASTER EQUIPMENT LEASE AND EACH SCHEDULE HERETO TO SOCIETE GENERALE, NEW YORK BRANCH, AS COLLATERAL AGENT FOR CERTAIN SECURED PARTIES.
 
CHG LOGO
 
 
AGREEMENT NO.  8463
CHG-MERIDIAN U.S. Finance, Ltd.
21800 Oxnard Street, Suite 410
Woodland Hills, CA 91367
Phone:  (818) 702-1800
Fax:  (818) 702-1821
MASTER EQUIPMENT LEASE
 
This MASTER EQUIPMENT LEASE (“Master Lease”) is effective as of October 18, 2011 (the "Effective Date"), and is by and between CHG-MERIDIAN U.S. Finance, Ltd., a California corporation (“Lessor”), having its principal office at 21800 Oxnard Street, Suite 410, Woodland Hills, CA  91367, and CDF2 Holdings, LLC, a Delaware limited liability company ("Lessee"), having its principal office at 55 Madison Avenue, Suite 300, Morristown, NJ  07960.
 
IN CONSIDERATION OF the mutual agreements contained in this Master Lease, the parties agree as follows:
 
1.      PROPERTY LEASED; TITLE:
 
1.1        Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the personal property, together with all replacements, parts, repairs, additions, attachments and accessories incorporated therein (individually called a “Unit” and collectively called the “Equipment”) described in each Equipment Lease Schedule executed from time-to-time pursuant to this Master Lease and substantially in the form attached hereto as Exhibit A (each a “Schedule”).  Each Schedule shall incorporate all of the terms and conditions of this Master Lease, shall contain such additional terms as Lessee and Lessor shall agree upon, but shall not constitute a separate agreement separate and distinct from this Master Lease and any other Schedule.  In other words, each Schedule shall be incorporated into and deemed a part of this Master Lease.  In the event of a conflict between the provisions of this Master Lease and a Schedule, the provisions of the Schedule shall prevail with respect to that Schedule.
 
1.2      It is expressly understood that the Equipment is, and shall at all times remain, personal property of Lessor.  Lessee shall have no right, title or interest in the Equipment except as expressly provided herein.  If Lessor supplies Lessee with labels, plates or other markings stating that the Equipment is owned by Lessor, Lessee shall attach the same in a prominent place on the Equipment in accordance with Lessor’s reasonable request.
 
2.      TERM; RENT:
 
2.1      This Master Lease shall commence on the Effective Date and shall continue so long as any Schedule remains in effect. Each Schedule shall set forth the initial term of the Schedule (“Initial Term”), the Monthly Rent for each Unit of equipment (“Monthly Rent”), the date of the purchase by Lessor of each Unit pursuant to the applicable Sale and Leaseback Agreement between Lessor, as buyer, and Lessee, as seller (“Commencement Date”), the installation date of each Unit (“Installation Date”; which shall be the later of (i) the date of acceptance or deemed acceptance of the Unit pursuant to the Acceptance Certificate (Exhibit B) and (ii) the Commencement Date), the installation location of each Unit (“Equipment Location”), the amount of Use Tax attributable to each Unit and all other additional terms.  The Initial Term for a Schedule shall begin on the Commencement Date and shall continue thereafter for the number of months specified therein.
 
 
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Lessee may terminate any Schedule at the end of any full month effective at the expiration of the Mandatory Renewal Term (as defined in the Schedule), if any, or the Initial Term (if no Mandatory Renewal Term) or any extension thereof, by giving Lessor (i) in the event Lessee elects to return the Equipment pursuant to Section 13 hereof, 180 days prior written notice, and (ii) in the event Lessee elects to renew the lease of the Equipment or to negotiate for the purchase of the Equipment from Lessor, 60 days prior written notice.  If such written notice is not given by Lessee, or if Lessee negotiates for the purchase of the Equipment from Lessor but such purchase is not closed, the Initial Term or any Mandatory Renewal Term, as applicable, shall be automatically extended thereafter on a month-to-month basis at the same Monthly Rent, until terminated by Lessor or Lessee giving the required notice as provided above and upon expiration of the applicable notice period.  Any notice of termination or renewal must relate to all the Equipment under a Permitted Sublease (as hereinafter defined) and may not be unilaterally revoked.
 
2.2      Subject to the Supplemental Terms Rider to this Lease, beginning on the Commencement Date, Lessee shall accrue payment obligations to Lessor for the Monthly Rent.  Commencing on the earlier of the third calendar month following the Commencement Date or the 15 th calendar month following the Effective Date, such Monthly Rent shall be payable on the 15 th day of each month during the Initial Term or any extension thereof (or if that day is not a business day, the next business day thereafter).  Monthly Rent for the Equipment shall be as specified in the Schedule, and shall be payable at Lessor’s address set forth above, or at such other address as Lessor may designate in writing, without further notice or demand therefor. Whenever any payment due hereunder is not made when due, Lessee shall pay interest on such amount at the rate of two (2) percentage points (200 basis points) per annum above the implied rate of interest payable as a component of Rent, or the maximum interest rate legally permissible in the state specified in Section 29, whichever is less (“Late Payment Rate”).
 
2.3      In the event any amounts are payable under Section 4.4(l)(C) or Section 4.5(l)(A)(z) or (B) of the Multiparty Agreement dated as of October 18, 2011, among Lessor, Lessee and the other parties thereto (the “Multiparty Agreement”) as a prepayment of Specified Senior Obligations (as defined in the Multiparty Agreement), such amounts shall be payable to Lessor as "Variable Rent" hereunder.  If applicable, Variable Rent corresponding to amounts payable under Section 4.4(l)(C) of the Multiparty Agreement shall be payable monthly on the 15 th day of each month in which any such Variable Rent is payable under the Multiparty Agreement (or if that day is not a business day, the next business day thereafter) and Variable Rent corresponding to amounts payable under Section 4.5(l)(A)(z) or (B) of the Multiparty Agreement shall be payable in quarterly installments on the 15 th day of every January, April, July and October (or if that day is not a business day, the next business day thereafter).  Variable Rent shall be applied to reduce the Rent Balance (as hereinafter defined) in inverse order of maturity.
 
2.4      On the Installation Date of each Unit, Lessee shall deliver to Lessor a prepaid reserve in the amount of One Thousand Four Hundred Dollars ($1,400) per Unit (the "Prepaid Reserve") to be held by Lessor as security for Lessee's failure to make any payment of Monthly Rent or Variable Rent (such amount, a "Rent Shortfall"), or for any other payment obligations of Lessee under this Master Lease.  In the event of a Rent Shortfall, Lessor may, but shall not be required to, use, apply or retain all or any part of the Prepaid Reserve for the payment of the Rent Shortfall or for any other payment obligations of Lessee.  Lessor shall be permitted to withhold the Prepaid Reserve from payment proceeds under the applicable Sale and Leaseback Agreement.
 
3.      NET LEASE:
 
Each Schedule executed hereunder shall constitute a net lease and Lessee agrees to pay all Monthly Rent, Variable Rent and any and all monies due and payable hereunder (collectively, “Rent” and the total amount thereof as determined as of a given date, the “Rent Balance”). Other sums may include but are not limited to casualty value, late fees, tax reimbursements, and end of lease payments, etc., shall be absolute and unconditional and shall not be subject to any abatement, reduction, set-off, defense, counterclaim or recoupment (“Abatements”) whatsoever, including without limitation, Abatements due to any past, present or future claims arising under this Master Lease regardless whether an invoice has been received in a form acceptable to Lessee, any Schedule or otherwise of
 
 
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Lessee against Lessor or any assignee of Lessor permitted under Section 14 hereof (each, an “Assignee”), or against the manufacturer or seller of any Unit or against any other person or entity.
 
4.      ACCEPTANCE:
 
Lessee represents and warrants that: (a) it or a Permitted Sublessee (as defined in Section 15) has selected each Unit based on such party’s own judgment and expressly disclaims any reliance upon statements made by Lessor, and (b) as of the Installation Date, as between Lessee and Lessor, Lessee shall have unconditionally accepted such Unit.  On any Installation Date, Lessee and the Permitted Sublessee will execute and deliver an Acceptance Certificate, substantially in the form attached hereto as Exhibit B, with respect to each Unit then being installed, which Acceptance Certificate shall constitute conclusive evidence of the foregoing. Lessee shall execute a final Acceptance Certificate if requested for Equipment that is delivered on multiple Installation Dates.  Lessee hereby authorizes Lessor to complete the Unit’s serial number and/or Installation Date on Lessee’s behalf if an Acceptance Certificate has been returned incomplete. In the event Lessee or a Permitted Sublessee rejects any of the Equipment for any reason, Lessor shall assign to Lessee all of Lessor’s interest therein and Lessee or a Permitted Sublessee shall reimburse and indemnify Lessor for any reasonable, out-of-pocket costs, expenses, fees, charges or other items incurred by Lessor in connection therewith.
 
5.      WARRANTIES; DISCLAIMER OF WARRANTIES:
 
5.1      Lessor warrants that so long as no Event of Default (as defined in Section 9 hereof) has occurred and is continuing hereunder, (i) Lessee and each Permitted Sublessee shall have the right of quiet and peaceful use, possession and enjoyment of the Equipment, subject to and in accordance with the provisions of this Master Lease, and (ii) notwithstanding any assignment, transfer, or grant of security interest by Lessor, neither Lessor nor any Assignee (as hereinafter defined) shall interfere with Lessee’s or any Permitted Sublessee’s right of quiet enjoyment of the Equipment.
 
5.2      LESSOR MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY OR ITS FITNESS OR CAPACITY OR DURABILITY FOR ANY PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT OR CONFORMITY OF THE EQUIPMENT TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE ORDER OR ORDERS RELATING THERETO, AND LESSOR EXPRESSLY DISCLAIMS THE SAME, AND, AS TO LESSOR, LESSEE LEASES THE EQUIPMENT “AS IS”. LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY, INDIRECTLY, INCIDENTALLY OR CONSEQUENTIALLY BY THE EQUIPMENT, OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN, BY ANY INCIDENT WHATSOEVER IN CONNECTION THEREWITH, ARISING IN STRICT LIABILITY, NEGLIGENCE OR OTHERWISE.  Notwithstanding the foregoing, provided no Event of Default shall have occurred and is continuing hereunder, Lessee shall be entitled to the benefit of any applicable manufacturer’s warranties and such warranties are hereby assigned by Lessor for the benefit of Lessee, to the extent held by Lessor and to the extent assignable.  Lessee acknowledges that the Equipment was ordered from the supplier by Lessee or a Permitted Sublessee, and either (a) Lessee received a copy of the contract by which the Equipment was acquired, or (b) Lessor has informed Lessee in writing of (i) the identity of the supplier, (ii) that Lessee may have rights under said contract and may be entitled, under the version of Uniform Commercial Code Article 2A (“UCC 2A”) as in effect in the state specified in Section 29, to the benefit of warranties provided to Lessor by such supplier, and (iii) that Lessee may and should contact the supplier to receive an accurate and complete description of such rights including any disclaimers or limitations on them or of the remedies thereunder. Lessee makes this acknowledgment so that such each Schedule shall qualify as and be a “finance lease” under UCC 2A.
 
 
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6.      LIENS; TAXES:
 
6.1      Lessee shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, lien, security interest, charge, encumbrance or claim (each a “Lien”) on or with respect to this Master Lease or any Schedule, the Equipment, title thereto or any interest therein except a Lien contemplated under the Multiparty Agreement or the Senior Credit Agreement or created by Lessor or Assignee, and Lessee shall immediately at its own expense take all actions as may be necessary to discharge any Lien not permitted hereby.
 
6.2      Subject to the Supplemental Terms Rider, Lessee or a Permitted Sublessee shall file and pay all income, ad valorem, value added, leasing, leasing use, stamp or other taxes, levies, imposts, duties, charges or withholdings of any nature arising out of the transactions contemplated herein and imposed against Lessor, Lessee, or the Equipment by any federal, state, local, or foreign government or taxing authority upon or with respect to the Equipment or upon the sale, purchase, ownership, delivery, leasing, possession, use, operation, return or other disposition thereof, or upon the Rent, receipts or earnings arising therefrom, or upon or with respect to this Master Lease (“Impositions”), excluding, however, Impositions on, or measured solely by, the gross or net income of Lessor (other than sales or use taxes) and franchise or similar taxes based on Lessor’s business existence or status (“Excluded Impositions”).  Lessee or a Permitted Sublessee shall reimburse Lessor for all Impositions (other than Excluded Impositions) to the extent paid by Lessor.  Lessee or a Permitted Sublessee shall also reimburse Lessor for all sales or use taxes assessed on Rent, property tax assessed on Equipment, installation, transportation or other services relating to the Equipment to the extent Lessor does not withdraw the same from the Use Tax Account (as defined in the Multiparty Agreement).  In the event Lessee or a Permitted Sublessee either self assesses sales or use tax or is required to pay directly sales tax or use tax or any Imposition relating to any charge made by Lessor to Lessee, Lessee or such Permitted Sublessee promptly shall forward copies of all pertinent returns or audit documents to Lessor.  Lessee shall not report any Equipment as directly assessable to Lessee without the prior consent of Lessor, which consent shall not be unreasonably withheld.  Any penalties, fines, or interest relating to returns to be filed by Lessee or payments to be made by Lessee directly to any taxing authority and later assessed to Lessor shall be paid by Lessee. Lessee or a Permitted Sublessee may contest, in good faith, any Impositions, but such contest shall not relieve Lessee of its indemnification and reimbursement obligations to Lessor hereunder, provided, that Lessor shall reasonably cooperate with the Lessee, at Lessee’s expense, in contesting any such Impositions. All payments and advances made by Lessor on behalf of Lessee shall be added to Lessee’s Rent Balance and shall be reimbursed by Lessee, including but not limited to, all Impositions owed directly by Lessor for which Lessee has responsibility for reimbursement hereunder and all amounts advanced by Lessor to pay Impositions (other than Excluded Impositions) otherwise owed by Lessee.
 
7.      INDEMNIFICATION:
 
Except for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify and hold harmless Lessor, Assignees, and their respective successors, employees, officers and/or agents (herein “Indemnified Persons”), from and against any loss (including any loss of tax benefits or creation of tax liability  arising as a result of an act, omission or misrepresentation of Lessee), liabilities, damages, penalties, claims, suits, out-of-pocket costs and expenses and disbursements at law or in equity, including reasonable attorney’s fees, imposed on, incurred by or asserted against the Indemnified Persons arising out of the leasing, ownership, use, possession, control, maintenance, operation and transportation of the Equipment, including but not limited to, claims for patent, trademark or copyright infringement and claims for property damage, personal injury or wrongful death arising in strict liability or negligence.  All indemnities contained in any section of this Master Lease, including this Section 7, shall survive, unless waived, the expiration or other termination of this Master Lease or any Schedule with respect to acts or events occurring or alleged to occur prior to return of any Unit to Lessor and are expressly made for the benefit of, and shall be enforceable by any or all of the Indemnified Persons.
 
8.      USE; INSTALLATION; MAINTENANCE; INSPECTION:
 
 
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8.1      Lessee shall comply with in all material respects all applicable laws, regulations and orders of any governmental branch or agency which relate to the installation, use, possession or operation of the Equipment, and shall use the Equipment in the regular course of its business only, within its normal capacity, without abuse; provided that compliance by a Permitted Sublessee of the applicable Equipment with its use, installation and maintenance obligations under any agreement between Lessee and a Permitted Sublessee permitted by or contemplated under the Multiparty Agreement (“Permitted Sublease”) shall be deemed to be compliance by Lessee with such obligations under this Section.
 
8.2      Lessee or the applicable Permitted Sublessee shall pay or cause to be paid all installation, transportation, rigging, unpacking and repacking, drayage, handling and insurance charges on the Equipment upon delivery to Lessee or the Permitted Sublessee and upon redelivery to Lessor upon the expiration or earlier termination of the Initial Term or any extension thereof, to such destination as is specified by Lessor within the continental United States of America (“Return Location”); provided Lessor hereby agrees that the Return Location shall be no more than 500 miles from the installed location of the Equipment.  Lessee or the applicable Permitted Sublessee pursuant to its Permitted Sublease shall furnish appropriate installation facilities for the Equipment.
 
8.3      Lessee or the applicable Permitted Sublessee, at its own expense, shall maintain the Equipment in good operating condition, repair and appearance, and protect the same from deterioration other than normal wear and tear, and shall enter into, and keep in force a maintenance agreement with the manufacturer of the Equipment.  Lessee or the applicable Permitted Sublessee shall cause the manufacturer, or other Lessor authorized warranty maintenance provider, in accordance with the manufacturers standards so as not to void any manufacturer warranty to keep the Equipment in good and efficient working order, less normal wear and tear, in full compliance and in accordance with the provisions of such maintenance agreement and shall furnish evidence of such agreement to Lessor upon request; provided that compliance by the applicable Permitted Sublessee with the maintenance and servicing standards and covenants imposed by the applicable Permitted Sublease shall be deemed to be compliance by Lessee with the foregoing requirements of this Section.
 
8.4      Upon prior written notice to Lessee and subject to reasonable security procedures, Lessee shall permit, or use commercially reasonable efforts to cause the applicable Permitted Sublessee to permit, Lessor or its designee to inspect the Equipment, equipment logs and maintenance records; provided that compliance with the inspection rights and access set forth in the applicable Permitted Sublease shall be deemed to be compliance with the requirements of this Section.
 
9.      DEFAULT:
 
Subject to the Supplemental Terms Rider, the occurrence of any of the following events hereunder or under any Schedule shall constitute a default by Lessee under this Master Lease (“Event of Default”):
 
(a)      Lessee shall fail to pay when due any Rent and such failure continues unremedied for a period of three (3) business days;
 
(b)      Except for defaults covered by Paragraph (a) above, Lessee shall fail to perform or observe any covenant, condition or agreement to be performed or observed by it hereunder or under any Schedule and such failure continues unremedied for thirty (30) days after the earlier of (A) the date on which a responsible officer of Lessee becomes aware of such failure and (B) the date on which notice thereof shall have been given to the Lessee by the Lessor; provided that Lessee shall only be allowed one 30-day grace period in any 12-month period and four 30-day grace periods during the term of this Master Lease, including grace periods extended under clause (g) below;
 
(c)      Lessee shall have made any representation or warranty herein, or in any document or certificate executed by Lessee incident herein, which is found to have been false in any material respect at the time such representation or warranty was made;
 
(d)        Lessee shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors, (ii) any proceeding shall be instituted by or against Lessee seeking to adjudicate it a bankrupt or insolvent or
 
 
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seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, composition of it or its debts or any similar order, in each case under any applicable aw relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the entry of an order for relief or the appointment of a custodian, receiver, trustee, conservator, liquidating agent, liquidator, other similar official or other official with similar powers, in each case for it or for any substantial part of its property and, in the case of any such proceedings instituted against (but not by or with the consent of) Lessee, either such proceedings shall remain undismissed or unstayed for a period of 60 days or more or any action sought in such proceedings shall occur or (iii) Lessee shall take any corporate or similar action or any other action to authorize any action described in clause (i) or (ii) above;
 
(e)      Lessee shall attempt to remove, sell, transfer, encumber, part with possession or sublet the Equipment or any Unit, except as expressly permitted hereunder or under a Permitted Sublease;
 
(f)      Lessee shall fail to obtain and maintain the insurance required herein and such failure continues unremedied for thirty (30) days after the earlier of (A) the date on which a responsible officer of Lessee becomes aware of such failure and (B) the date on which notice thereof shall have been given to the Lessee by the Lessor; provided that Lessee shall only be allowed one such 30-day grace period in any 12-month period and only four such 30-day grace periods during the term of this Master Lease, including grace periods extended under clause (b) above;
 
(g) Lessee shall be in default under any other loan, lease, guaranty, or other financing contract which, if accelerated, would require a payment in excess of $250,000 and any applicable grace period shall have expired;
 
(h)                 Lessee shall have terminated its corporate, partnership, or limited liability company (as applicable) existence, consolidated with, or merged into, or conveyed or leased substantially all of its assets as an entirety to any person; or if effective voting control of the ownership interests in Lessee is not retained by the present share holders thereof; or
 
(i)      Lessee shall be in default under that certain Master Equipment Lease between Lessor and Lessee dated on or about October 18, 2011, including any Schedule thereto; or
 
(j)      the occurrence of any of the following:  (a) Cinedigm Digital Cinema Corp., a Delaware corporation, shall cease to own and control a majority of the economic and voting rights associated with ownership of the outstanding Voting Stock (as defined in the Senior Credit Agreement) of all classes of Voting Stock of Access Digital Cinema Phase 2, Corp., a Delaware corporation, (b) Access Digital Cinema Phase 2, Corp., a Delaware corporation, shall cease to own and control a majority of the economic and voting rights associated with ownership of the outstanding Voting Stock of all classes of Voting Stock of Lessee, (c) Lessee shall cease to own and control a majority of the economic and voting rights associated with ownership of the outstanding Voting Stock of all classes of Voting Stock of Cinedigm Digital Funding 2, LLC, a Delaware limited liability company, or (d) any "change in control" or similar event shall occur under the terms of any Material Digital Cinema Deployment Agreement (as defined in the Senior Credit Agreement) that results in the termination of any Material Digital Cinema Deployment Agreement by the distributor party thereto; provided, that, any of the foregoing which is consented to in advance in writing by the Required Lenders (as defined in the Senior Credit Agreement), in their sole discretion, shall not constitute an Event of Default.
 
10.                 REMEDIES:
 
Subject to the Multiparty Agreement, upon the occurrence and during the continuance of any Event of Default, Lessor may, with or without terminating this Master Lease, in its sole discretion, do any one or more of the following:
 
(a)      proceed by appropriate court action to enforce performance by Lessee of the applicable covenants of this Master Lease or any Schedule;
 
(b)      declare immediately payable all sums due and to become due hereunder for the full term of any and all Schedules to this Master Lease;
 
 
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(c)       recover from Lessee damages, not as a penalty, but herein liquidated for all purposes and in an amount equal to Casualty Value defined as the sum of (i) any then accrued charges and unpaid Rent plus interest thereon at the Late Payment Rate, (ii) the present value of all remaining Rent contracted to be paid over the unexpired portion of the Initial Term and Mandatory Renewal Term, if any, discounted at an interest rate (the "Default Rate") equal to the yield to maturity on the  three-year (3 yr) Treasury Note published in the Federal Reserve Banks H.15 report on the applicable Commencement Date plus 325 basis points, plus interest thereon at the Late Payment Rate until paid and any additional break funding costs, (iii) all commercially reasonable out-of-pocket costs and expenses incurred by Lessor in any repossession, recovery, storage, or repair, sale, re-lease or other disposition of the Equipment, including reasonable attorney’s fees and costs incurred in connection therewith or otherwise resulting from Lessee’s default, and (iv) the present value of the fair market in-place residual value of the Equipment as of the expiration of the Initial Term or Mandatory Renewal Term, if any, or any extension thereof (as applicable), determined by Lessor in a commercially reasonable manner (taking into account the present value of all VPF (as defined in the Multiparty Agreement) payments, and other alternate content fees and like amounts payable or reasonably expected to be payable under the applicable Permitted Sublease over the expected life of the Equipment discounted at the Default Rate), in each case, net of all costs, expenses, and other deductions from revenues and earnings provided in Sections 4.4 and 4.5 of the Multiparty Agreement, such determination to be conclusive absent manifest error.  In the event Lessor recovers from Lessee the full measure of damages under this Section 10(c), Lessor shall transfer title to the Equipment to Lessee, on an as-is, where-is basis, without representation or warranty.
 
(d)      re-lease or sell any or all of the Equipment at a public or private sale, with the privilege of becoming the purchaser or lessee thereof, on such terms and notice as Lessor shall deem reasonable, and thereafter Lessor shall apply the proceeds derived therefrom as follows, Lessee remaining liable for any deficiency: first, to reimburse Lessor for all reasonable out-of-pocket costs and expenses incurred by Lessor in any repossession, recovery, storage, repair, sale, re-lease, or other disposition for the Equipment, including reasonable attorneys' fees, commissions, and brokers' fees, and costs incurred in connection therewith or otherwise resulting from Lessee's default; second, to pay Lessor any amounts owing hereunder; and third, any surplus remaining thereafter to Lessee;
 
(e)      take possession (by summary proceedings or otherwise) of the Equipment without prejudice to any other remedy or claim referred to herein, subject to any subordination, non-disturbance and attornment agreements with Permitted Sublessees; and
 
(f)      exercise any other right or remedy which may be available to it under the Uniform Commercial Code or any other applicable law.
 
Subject to the Multiparty Agreement and any subordination, non-disturbance and attornment agreements with Permitted Sublessees, a termination hereunder shall occur only upon notice by Lessor and only as to such Equipment as Lessor specifically elects to terminate and this Master Lease and all Schedules hereto shall continue in full force and effect as to the remaining Equipment, if any.  No remedy referred to in this Section is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity.  No express or implied waiver by Lessor of any default shall constitute a waiver of any other default by Lessee or a waiver of any of Lessor’s rights.
 
11.      DAMAGE; DESTRUCTION OR LOSS:
 
11.1        Upon delivery of the Equipment to Lessee or a Permitted Sublessee until the Equipment is redelivered to Lessor, Lessee shall bear the entire risk of loss, damage, or destruction with respect to the Equipment resulting from any cause whatsoever.
 
11.2      If any Unit becomes damaged, partially damaged or damaged beyond repair, lost, stolen, destroyed or permanently rendered unfit, or in the event of any condemnation or requisition of title or use of any Unit by any governmental authority (any such occurrence being hereinafter referred to as an “Event of Loss”), then Lessee shall promptly notify Lessor with a loss certificate and shall do
 
 
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either of the following within thirty (30) days after the Lessee  has actual knowledge of the occurrence of an Event of Loss:
 
(a)        In Lessor’s sole discretion, it shall direct Lessee at Lessee’s own expense to either (i) promptly repair the affected Unit to its original capacity and condition or  (ii) replace the affected Unit with a newer unit of identical make, model, configuration, capacity and condition, in good repair, free and clear of all Liens in which case any such replacement unit shall become the property of Lessor and for all purposes of this Master Lease shall be deemed to be the Unit which it replaced; or
 
(b)      Terminate the Schedule with respect to the affected Unit and pay to Lessor on the next payment date, an amount equal to the Casualty Value as set forth in Section 10(c); or
 
(c)      Cause any Permitted Sublessee of any such Unit to replace or repair such Unit in compliance with its obligations under its Permitted Sublease.
 
12.     INSURANCE:
 
Lessee shall, at its expense, insure the Equipment against all risks and in such amounts as Lessor shall reasonably require (but not less than the greater of  (i) the Casualty Value or (ii) full replacement value with carriers reasonably acceptable to Lessor, shall maintain a loss payable endorsement in favor of Lessor and Assignee affording to Lessor and Assignee such additional protection as Lessor and Assignee shall reasonably require, and Lessee shall maintain liability insurance of no less than $1,000,000.00 per occurrence.  All such insurance policies shall name Lessee, Lessor and Assignee as additional insureds and loss payees, and shall provide that insurance coverage shall not be canceled without at least thirty (30) days’ prior written notice to Lessor and Assignee, and that no breach of warranty by Lessee shall invalidate such insurance with respect to any additional insured.  Lessee shall furnish appropriate evidence of such insurance to Lessor and Assignee. In the case Lessee fails to provide adequate insurance as described above, Lessor may obtain insurance on Lessee’s behalf, the cost of which will be immediately reimbursed to Lessor by Lessee.  Lessee shall be deemed to have complied with this Section 12 if the applicable Permitted Sublessee shall be in compliance with its comparable obligations to Lessee under its Permitted Sublease. Notwithstanding anything herein to the contrary, compliance by Lessee with the insurance requirements of the Exhibitor Agreements (as defined in the Senior Credit Agreement) shall constitute compliance with the insurance requirements under this Master Lease.
 
13.     SURRENDER OF EQUIPMENT:
 
Upon the expiration or earlier termination of any Schedule with respect to any Unit, Lessee shall, unless Lessee has paid Lessor in cash the Casualty Value of the Unit plus any accrued Rent and any other payments due, at Lessee’s expense, deinstall, repackage and return the Equipment to Lessor to the Return Location, in the condition described in Section 8 hereof within ten (10) calendar days and failure to do so shall be deemed an Event of Loss as defined in Section 11.2.  Lessee shall arrange and pay for all such repairs and work required as to any Unit in order to comply with the requirements of Section 8 hereof.  Lessee shall bear the risk of damage or loss until delivery of the Equipment to the Return Location.
 
14.     ASSIGNMENT BY LESSOR:
 
LESSOR MAY ASSIGN OR TRANSFER THIS MASTER LEASE OR ANY SCHEDULE HERETO OR LESSOR’S INTEREST IN THE EQUIPMENT OR GRANT A SECURITY INTEREST THEREIN TO ONE OR MORE ASSIGNEES AS PROVIDED IN THE MULTIPARTY AGREEMENT OR WITH THE PRIOR WRITTEN CONSENT OF LESSEE (UNLESS AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING), WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.  Unless otherwise agreed in writing, (a) any Assignee of Lessor shall have all of the rights, and none of the obligations, of Lessor that arise on or after the time the assignment becomes effective other than the obligation to permit quiet enjoyment of the Equipment pursuant to the terms of this Master Lease, (b) any Assignee of Lessor shall have none of the obligations of Lessor that arose prior to the time the assignment becomes effective, (c) no assignment shall relieve Lessor from any of its
 
 
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obligations, and (d) Lessee agrees that it will not assert against any Assignee any defense, counterclaim or offset that Lessee may have against Lessor arising from the acts or omissions of Lessor before such assignment becomes effective, or arising from acts or omissions of Lessor after such assignment becomes effective other than, except in the  case of a collateral assignment by Lessor as security for its financing relating to the purchase of Equipment (and subsequent collateral assignments by its lender and any foreclosures or transfers in lieu of foreclosure in connection with any of the foregoing) for a breach by Lessor of the obligation to permit quiet enjoyment of the Equipment pursuant to the terms of this Master Lease.  Lessee shall have no greater obligations to any Assignee than it had to Lessor at the time of assignment, and such assignment shall not limit or otherwise restrict the rights afforded Lessee hereunder. Lessee hereby agrees to promptly execute and deliver, or use commercially reasonable efforts to cause the applicable Permitted Sublessee to execute and deliver, such further acknowledgments, agreements and other instruments as may be reasonably requested by Lessor or Assignee to effect such assignments and/or grants from time-to-time as each Schedule is executed.  Lessee acknowledges that any assignment or transfer by Lessor made in accordance with the provisions of this Section shall not change Lessee’s duties or obligations under this Master Lease or any Schedules nor increase the burdens or risks imposed on Lessee.  In the event of an assignment, all references herein to Lessor shall include Assignee.
 
15.     ASSIGNMENT OR SUBLEASE BY LESSEE; PERMITTED SUBLEASES:
 
LESSEE SHALL NOT, EXCEPT AS PROVIDED IN THE MULTIPARTY AGREEMENT, ASSIGN OR IN ANY WAY DISPOSE OF ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER THIS MASTER LEASE OR ANY SCHEDULES OR ENTER INTO ANY SUBLEASE OF ALL OR ANY UNIT WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.
 
Notwithstanding the foregoing, Lessee may enter into subleases or licenses of its rights in the Equipment with Exhibitors (as defined in the Multiparty Agreement; hereunder, “Permitted Sublessees”)  pursuant to Exhibitor Agreements (hereunder, “Permitted Subleases”).
 
As to any assignment or sublease permitted hereunder, the following additional conditions shall apply:
 
(a)      Equipment shall not be relocated outside of the United States of America;
 
(b)      Lessee shall give to Lessor prior written notice of the location of the Equipment and the identity of the lessee thereof (“Subsequent Lessee”) thirty (30) days prior to installation of the Equipment at Subsequent Lessee’s location;
 
(c)      No sublease or assignment shall in any way discharge or diminish any of Lessee’s obligations to Lessor under the Master Lease or any Schedule thereto; and
 
(d)      Any sublease or assignment shall be expressly subject and subordinate to the terms and conditions of this Master Lease and the applicable Schedule, the terms and conditions thereof shall be subject to Lessor’s reasonable approval (Permitted Sublessees being deemed approved), and Lessee shall assign its rights thereunder to Lessor and Assignee as additional collateral and security for the performance of Lessee’s obligations hereunder.
 
16.     RELOCATION:
 
Except as otherwise permitted under the Permitted Subleases, Lessee shall not move or permit to be moved any Equipment from the Equipment Location without the prior written consent of Lessor, which consent shall not be unreasonably withheld; provided, however, in no event shall any Equipment be moved to a location outside the United States of America.  Risk of loss and all costs and expenses incurred in connection with any movement of Equipment including any costs incurred by Lessor to preserve its security interest or title in the equipment, shall be the responsibility of Lessee.
 
17.     ALTERATIONS AND MODIFICATIONS:
 
 
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Except as otherwise permitted under the Permitted Subleases, Lessee shall not make modifications, alterations or additions to Equipment (other than normal operating accessories or controls) without the prior written consent of Lessor, which consent shall not be unreasonably withheld.  Notwithstanding the foregoing, Lessee shall be entitled to acquire and install, at Lessee’s expense, such additional features or options (“Modifications”) which (i) will not impair the originally intended function or use of the Equipment in which the Modifications are installed, (ii) will not require removal of any part of the Equipment, (iii) will not interfere with Lessee’s ability to obtain and maintain the maintenance contract required by Section 8.3, and (iv) the addition of which will not have an adverse impact upon the value of the underlying Equipment or Lessor’s rights therein.  Except as otherwise permitted under the Permitted Subleases, such Modifications shall be of the type which are readily installed and removed without damage to the Equipment so as to restore the Equipment to the condition in which it existed prior to the installation of such Modifications; provided, however, that if Lessor so agrees in writing, Lessee shall not be required to remove such Modifications.  Any Modifications not so removed shall become the property of Lessor.  All Modifications must be maintained in accordance with Section 8 hereof.
 
18.     REPRESENTATIONS AND WARRANTIES OF LESSEE:
 
Lessee will provide as of the Effective Date: (i) an Incumbency Certificate or other document identifying the signatures and establishing the authority of the signers of the lease documents, and (ii) an opinion of counsel in form and substance reasonably satisfactory to Lessor.
 
Lessee represents and warrants for the benefit of Lessor and any Assignee, that as of the time of execution and delivery of this Master Lease and each Schedule:
 
(a)      Lessee (i) is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (ii) is in good standing in each jurisdiction where the Equipment will be located, except where the failure to be in good standing would not, in the aggregate, have a material adverse effect on the business or financial condition of Lessee or ability of Lessee to satisfy its obligations hereunder (a “Material Adverse Effect”), and (iii) has adequate limited liability company power to enter into and perform this Master Lease and each Schedule;
 
(b)      This Master Lease and each Schedule have been duly authorized, executed and delivered by Lessee and constitute a valid, legal and binding agreement of Lessee, enforceable in accordance with their terms, subject to enforcement limitations imposed by state or federal laws generally affecting the rights of creditors and general equitable principles;
 
(c)      Subject to Section 6.1 of this Master Lease, the execution and delivery of and the performance by Lessee of its obligations under this Master Lease and each Schedule will not violate any judgment, order, law or governmental regulation applicable to Lessee or any provision of Lessee’s articles of incorporation, by-laws or other organizational documents or result in any breach of or constitute a default under any instrument or agreement to which Lessee is a party or by which Lessee or its assets may be bound or result in the creation of any Lien, except as contemplated herein or as would not, in the aggregate, have a Material Adverse Effect;
 
(d)      There are no pending actions or proceedings to which Lessee is a party, and there are no other pending or threatened actions or proceedings of which Lessee has knowledge, before any court, arbitrator or administrative agency, which, either individually or in the aggregate, would have a Material Adverse Effect. Lessee is not in default under any obligation for borrowed money that would constitute an Event of Default hereunder;
 
(e)      Under all applicable laws, the Equipment consists solely of personal property and not fixtures;
 
(f)      The financial statements of Lessee (copies of which have been furnished to Lessor) have been prepared in accordance with generally accepted accounting principles consistently applied (“GAAP”), and fairly present in all material respects Lessee’s financial condition and the results of its operations as of the date of and for the periods covered by such statements, and since the date of such
 
 
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statements there has been no material adverse change in such conditions or operations that would, in the aggregate, have a Material Adverse Effect; and
 
(g)      Lessee is not a tax exempt entity under the Internal Revenue Code of 1986 as amended.
 
19.      NOTICES:
 
Any notices required or other communications required or expressly authorized to be made by this Master Lease shall be transmitted by registered or certified mail or other form of expedited delivery which requires the signature or acknowledgment of the receiving party.  All such notices shall be issued to the addresses of the parties set forth above, or to such other address as a party may hereafter specify by written notice given in accordance with the requirements of this Section, and shall be deemed given on the earlier of the date received and five (5) business days after the date notice is issued.
 
20.      SOFTWARE:
 
Lessee and Lessor acknowledge that the Equipment may contain or include a description of certain software (“Software”) in which Lessor and Lessee have no ownership or other proprietary rights.  Where required by the Software owner, manufacturer or distributor, Lessee shall enter into a license or other agreement for the use of such Software.  Any Software agreement shall be separate and distinct from this Master Lease and any Schedule, and Lessor and Assignee shall not have any obligations thereunder, but shall have the right to require Lessee to terminate Lessee’s use of the Software if an Event of Default shall occur and shall be continuing hereunder.  In the event Rent specified in a Schedule includes an amount attributable to the financing by Lessor of Lessee’s fee for use of Software, Lessee agrees that such amount shall be deemed Rent and subject to all the provisions of this Master Lease. In the event Lessor has advanced the cost of Software and Lessee has surrendered Equipment to Lessor as described in Section 13, Lessor at its option has the right to take assignment of Lessee’s rights under such software agreements  if loss of Software affects the fair market value of the Equipment.
 
21.      LESSOR’S RIGHT TO CURE:
 
If Lessee fails to perform any obligations hereunder, then Lessor, in addition to all of its rights and remedies hereunder, may perform the same, but shall not be obligated to do so, at the cost and expense of Lessee.  In such event, Lessee shall promptly reimburse Lessor for any such costs and expenses incurred by Lessor together with interest thereon at the Late Payment Rate from the date incurred to the date reimbursement is made.  All payments and advances made by Lessor shall be deemed Rent.
 
22.      INFORMATION:
 
Subject to the Supplemental Terms Rider, during the term of this Master Lease, Lessee covenants and agrees as follows:
 
(a)      Lessee shall provide Lessor prompt notice of the occurrence of any Event of Default or event which, with the passage of time or giving of notice, would be an Event of Default.
 
(b)      Lessee will promptly execute and deliver to Lessor such further documents, instruments and assurances and take such further action as Lessor from time to time may reasonably request in order to carry out the intent and purpose of this Lease and to establish and protect the rights and remedies created or intended to be created in favor of Lessor under the Lease.
 
23.      APPOINTMENT OF COLLATERAL AGENT:
 
23.1      Appointment and Duties of Collateral Agent .  (a)  Lessor, on behalf of itself and any Assignee of Lessor, and each Assignee of Lessor (by its acceptance of the benefits of this Master Lease) (collectively referred to in this Section 23, as "Lessor") hereby irrevocably appoints Société Générale, New York Branch ("SG") (together with any successor collateral agent pursuant to Section 23.9 below) as the collateral agent (the "Collateral Agent") hereunder and under the other CHG Lease
 
 
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Facility Documents (such term as used herein shall have the meaning ascribed to it in the Multiparty Agreement) and authorizes the Collateral Agent to (i) execute and deliver the CHG Lease Facility Documents to which it is a party and accept delivery thereof on its behalf from Lessee or any other grantor under the CHG Lease Security Documents (as defined in the Multiparty Agreement) (collectively, the "Grantors"), (ii) take such action on its behalf and exercise all rights, powers and remedies and perform the duties as are expressly delegated to the Collateral Agent under such CHG Lease Facility Documents, (iii) act as collateral agent for Lessor for purposes of the perfection of all Liens created by such agreements and all other purposes stated therein, (iv) manage, supervise and otherwise deal with the collateral securing this Master Lease (the "Collateral"), (v) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the CHG Lease Facility Documents, (vi) except as may be otherwise specified in any CHG Lease Facility Document (including the Multiparty Agreement), exercise all remedies given to the Collateral Agent and the Lessor with respect to the Collateral, whether under the CHG Lease Facility Documents, applicable law or otherwise (vii) execute any amendment, consent or waiver under the CHG Lease Facility Documents to which the Collateral Agent is a party on behalf of Lessor to the extent Lessor has consented in writing to such amendment, consent or waiver, and (viii) exercise such powers as are reasonably incidental thereto.
 
(b)       Limited Duties .  Under the CHG Lease Facility Documents, the Collateral Agent (i) is acting solely on behalf of the Lessor, with duties that are entirely administrative in nature, notwithstanding the use of the defined term "Collateral Agent" or the terms "agent" and "collateral agent" and similar terms in any CHG Lease Facility Document to refer to the Collateral Agent, which terms are used for title purposes only, (ii) is not assuming any obligation under any CHG Lease Facility Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for Lessor and (iii) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any CHG Lease Facility Document, and Lessor hereby waives and agrees not to assert any claim against the Collateral Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (i) through (iii) above.
 
23.2      Binding Effect .  Lessor agrees that (i) any action taken by the Collateral Agent in accordance with the provisions of the CHG Lease Facility Documents, (ii) any action taken by the Collateral Agent in reliance upon the instructions of Lessor and (iii) the exercise by the Collateral Agent or the Lessor of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon Lessor.
 
23.3      Use of Discretion .
 
(a)        No Action without Instructions .  The Collateral Agent shall not be required to exercise any discretion or take, or omit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit to take (i) under the CHG Lease Facility Documents or (ii) pursuant to instructions from the Lessor.
 
(b)       Right Not to Follow Certain Instructions .  Notwithstanding clause (a) above, the Collateral Agent shall not be required to take, or to omit to take, any action (i) unless, upon demand, the Collateral Agent receives an indemnification satisfactory to it from the Lessor against all liabilities that, by reason of such action or omission, may be imposed on, incurred by or asserted against the Collateral Agent or any Related Person thereof or (ii) that is, in the opinion of the Collateral Agent or its counsel, contrary to any CHG Lease Facility Document or applicable Requirement of Law.
 
23.4     Delegation of Rights and Duties .  The Collateral Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any CHG Lease Facility Document by or through any trustee, co-agent, employee, attorney-in-fact and any other Person (including the Lessor).  Any such Person shall benefit from this Section 23 to the extent provided by the Collateral Agent.
 
23.5     Reliance and Liability .  (a)  The Collateral Agent may, without incurring any liability hereunder, (i) consult with any of its affiliates, directors, officers, employees, agents, counsel, accountants or other advisors (each, a "Related Person") and, whether or not selected by it, any other
 
 
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advisors, accountants and other experts (including advisors to, and accountants and experts engaged by, Lessee) and (ii) rely and act upon any document and information (including those transmitted by electronic transmission) and any telephone message or conversation, in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties.
 
(b)      Neither the Collateral Agent nor any of its Related Persons shall be liable for any action taken or omitted to be taken by any of them under or in connection with any CHG Lease Facility Document, and Lessor and Lessee hereby waives and shall not assert (and Lessee shall cause each other Grantor to waive and agree not to assert) any right, claim or cause of action based thereon, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of the Collateral Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection with the duties expressly set forth herein.  Without limiting the foregoing, the Collateral Agent:
 
(i)      shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Lessor or for the actions or omissions of any of its Related Persons;
 
(ii)      shall not be responsible to Lessor the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any CHG Lease Facility Document;
 
(iii)      makes no warranty or representation, and shall not be responsible, to Lessor for any statement, document, information, representation or warranty made or furnished by or on behalf of any Related Person, any person acting under Section 23.4, Lessee or any other Grantor in connection with any CHG Lease Facility Document or any transaction contemplated therein or any other document or information with respect to any Grantor, whether or not transmitted or (except for documents expressly required under any CHG Lease Facility Document to be transmitted to Lessor) omitted to be transmitted by the Collateral Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by the Collateral Agent in connection with the CHG Lease Facility Documents; and
 
(iv)     shall not have any duty to ascertain or to inquire as to the performance or observance of any provision of any CHG Lease Facility Document, whether any condition set forth in any CHG Lease Facility Document is satisfied or waived, as to the financial condition of any Grantor or as to the existence or continuation or possible occurrence or continuation of any default or Event of Default and shall not be deemed to have notice or knowledge of such occurrence or continuation unless it has received a notice clearly labeled "notice of default" from Lessor describing such default or Event of Default;
 
and, for each of the items set forth in clauses (i) through (iv) above, Lessor and Lessee each waives and agrees not to assert (and Lessee shall cause each other Grantor to waive and agree not to assert) any right, claim or cause of action it might have against the Collateral Agent based thereon.
 
23.6       Collateral Agent Individually; Waiver of Conflicts; Removal of Collateral Agent .  (a)  The Collateral Agent and its affiliates may make loans and other extensions of credit to, acquire stock and stock equivalents of, engage in any kind of business with, Lessor, Lessee, any other Grantor or affiliate thereof as though it were not acting as the Collateral Agent and may receive separate fees and other payments therefor.  To the extent the Collateral Agent or any of its affiliates becomes a Assignee of Lessor hereunder, it shall have and may exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities, pursuant to Section 14 hereof, as any other Assignee and any similar terms shall, except where otherwise expressly provided in any CHG Lease Facility Document, include, without limitation, the Collateral Agent or its affiliate, as the case may be, in its individual capacity as Assignee.
 
(b)      Lessor waives any and all conflicts of interest SG may have in its capacity as Collateral Agent.  Lessor acknowledges and consents to SG serving in other capacities in related transactions and hereby waives any conflicts related thereto.
 
 
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(c)      Lessor may remove the Collateral Agent at any time by delivering notice of such removal to the Collateral Agent and Lessee, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date that is 30 days after such notice is given.  Upon removal, the removed Collateral Agent shall be discharged from its duties and obligations under the CHG Lease Facility Documents, and the Lessor shall assume and perform all of the rights and duties of the Collateral Agent until a successor Collateral Agent shall have accepted a valid appointment hereunder (which successor Collateral Agent shall be subject to the prior written consent of Lessee, which may not be unreasonably withheld but shall not be required during the continuance of a default or Event of Default); provided that subject to its rights under Section 23.3, the removed Collateral Agent shall take such action as may be reasonably necessary to assign to the Lessor or any successor Collateral Agent its rights and Liens as Collateral Agent under the CHG Lease Facility Documents.
 
23.7     Lessor Credit Decision .  Lessor acknowledges that it shall, independently and without reliance upon the Collateral Agent or any of its Related Persons or upon any document solely or in part because such document was transmitted by the Collateral Agent or any of its Related Persons, conduct its own independent investigation of the financial condition and affairs of Lessee and each Grantor and make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under, any CHG Lease Facility Document or with respect to any transaction contemplated in any CHG Lease Facility Document, in each case based on such documents and information as it shall deem appropriate.  Except for documents expressly required by any CHG Lease Facility Document to be transmitted by the Collateral Agent to the Lessor, the Collateral Agent shall have no duty or responsibility to provide Lessor with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of Lessee or any Grantor or any affiliate of any Grantor that may come in to the possession of the Collateral Agent or any of its Related Persons.
 
23.8     Expenses; Indemnities .  (a)  Lessor agrees to reimburse the Collateral Agent and each of its respective Related Persons (to the extent not reimbursed by Lessee or any Grantor) promptly upon demand for any costs and expenses (including fees, charges and disbursements of financial, legal and other advisors and taxes paid in the name of, or on behalf of, any Grantor) that may be incurred by the Collateral Agent or any of its Related Persons in connection with the preparation, execution, delivery, administration, modification, consent, waiver or enforcement (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding or otherwise) of, or legal advice in respect of its rights or responsibilities under, any CHG Lease Facility Document.
 
(b)      Lessor further agrees to indemnify the Collateral Agent and each of its Related Persons (to the extent not reimbursed by any Grantor), from and against all claims, judgments, damages, losses, liabilities, obligations, fines, penalties, sanctions, costs, fees, taxes, commissions, charges, disbursement and expenses (including legal fees), in each case, of any kind or nature (collectively, the "Liabilities") (including taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made to on or for the account of Lessor) that may be imposed on, incurred by or asserted against the Collateral Agent or any of its Related Persons in any matter relating to or arising out of, in connection with or as a result of any CHG Lease Facility Document or any other act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any action taken or omitted to be taken by the Collateral Agent or any of its Related Persons under or with respect to any of the foregoing; provided, however, that Lessor shall not be liable to the Collateral Agent or any of its Related Persons to the extent such liability has resulted primarily from the gross negligence or willful misconduct of the Collateral Agent or, as the case may be, such Related Person, as determined by a court of competent jurisdiction in a final non-appealable judgment or order.
 
23.9     Resignation of Collateral Agent .  (a)  The Collateral Agent may resign at any time by delivering not less than 15 days prior notice of such resignation to the Lessor and the Lessee, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date that is 30 days after such notice is given.  If the Collateral Agent delivers any such notice, the Lessor shall have the right to appoint a successor Collateral Agent.  Each appointment under this clause (a) shall be subject to the prior written consent of Lessee, which may not be unreasonably withheld but shall not be required during the continuance of a default or Event of Default.
 
 
14

 
 
(b)      Effective immediately upon its resignation and the assignment of Liens in favor of the successor Collateral Agent or otherwise for the benefit of the Lessor, (i) the retiring Collateral Agent shall be discharged from its duties and obligations under the CHG Lease Facility Documents, (ii) Lessor shall assume and perform all of the rights and duties of the Collateral Agent until a successor Collateral Agent shall have accepted a valid appointment hereunder, (iii) the retiring Collateral Agent and its Related Persons shall no longer have the benefit of any provision of any CHG Lease Facility Document other than with respect to any actions taken or omitted to be taken while such retiring Collateral Agent was, or because such Collateral Agent had been, validly acting as Collateral Agent under the CHG Lease Facility Documents and (iv) subject to its rights under Section 23.3, the retiring Collateral Agent shall take such action as may be reasonably necessary to assign to the successor Collateral Agent its rights and Liens as Collateral Agent under the CHG Lease Facility Documents.  Effective immediately upon its acceptance of a valid appointment as Collateral Agent and the assignment of Liens from the retiring Collateral Agent, a successor Collateral Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Collateral Agent under the CHG Lease Facility Documents.
 
23.10       Deemed Instructions .  Notwithstanding anything to the contrary herein or in the CHG Lease Security Documents (as defined in the Multiparty Agreement), any instructions relating to the Collateral provided to the Senior Collateral Agent (as defined in the Multiparty Agreement) by the Senior Creditors (as defined in the Multiparty Agreement) in accordance with the Multiparty Agreement in connection with the exercise of their rights and remedies under the Senior Credit Documents (as defined in the Multiparty Agreement) is deemed to be an instruction by the Lessor to the Collateral Agent with respect to the Collateral.
 
24.      COUNTERPARTS; FINANCING STATEMENTS; POWER OF ATTORNEY:
 
24.1     No executed original of this Master Lease or any Schedule shall be deemed to be an “original” for the purposes of perfection of a security interest therein under the Uniform Commercial Code in effect in any applicable jurisdiction, and no security interest may be created or perfected by possession or transfer of any original or counterpart of this Master Lease or Schedule.  Lessee acknowledges that Lessor has or will assign and grant a security interest in this Master Lease and each Schedule to Borrower as provided in the Multiparty Agreement.
 
24.2        Lessee agrees to execute, deliver and file any and all instruments reasonably requested by Lessor to perfect the interest of Lessor, its successors or assigns in this Master Lease, any Schedule, the payments due hereunder or the Equipment.  Lessee authorizes Lessor, at Lessee’s expense, to file a copy of this Master Lease or any Schedule as a financing statement.
 
24.3        Lessee hereby appoints Lessor as its agent and attorney-in-fact to execute, deliver, file and record (a) any and all Uniform Commercial Code Financing Statements and Statements of Amendment as are reasonably deemed necessary or desirable by Lessor or any Assignee, regardless whether for precautionary filing purposes, to indicate the interest of Lessor or any Assignee in this Schedule, the Equipment and any proceeds thereof, and (b) any documents or instruments respecting realization on insurance or any other proceeds of the Equipment.
 
25.        ATTORNEY’S FEES:
 
In the event of any action at law or in equity in relation to this Master Lease or any Schedule, the prevailing party shall be entitled to recover its reasonable out-of-pocket attorney’s fees and costs.
 
26.        SURVIVAL OF REPRESENTATIONS, WARRANTIES, INDEMNITIES AND COVENANTS:
 
All representations, warranties, indemnities and covenants of Lessee contained in this Master Lease or any other document or certificate delivered pursuant hereto or thereto shall continue in full force and effect and shall survive notwithstanding the expiration or earlier termination of this Master Lease in any manner whatsoever.
 
 
15

 
 
27.        EFFECT OF WAIVER:
 
The failure or delay of Lessor in exercising any rights granted hereunder shall not constitute a waiver of any such right and any single or partial exercise of any particular right by Lessor shall not exhaust the same or constitute a waiver of any other right provided herein.
 
28.        GOVERNING LAW:
 
This Master Lease and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 
29.        JURISDICTION:
 
29.1       Submission to Jurisdiction.  Any legal action or proceeding with respect to this Master Lease may be brought in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States for the Southern District of New York and, by execution and delivery of this Master Lease, each party hereto hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.
 
29.2       Service of Process.  Each party hereto hereby irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States with respect to or otherwise arising out of or in connection with this Master Lease by any means permitted by applicable law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of each party hereto specified in the first paragraph hereof (and shall be effective when such mailing shall be effective, as provided therein).  Each party 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.
 
29.3       Non-Exclusive Jurisdiction.  Nothing contained in this Section 29.3 shall affect the right of any party hereto to serve process in any other manner permitted by applicable law or the right of any party hereto to commence legal proceedings or otherwise proceed against any party hereto, or any of the Equipment in any other jurisdiction.
 
29.4        WAIVER OF JURY TRIAL .  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS MASTER LEASE OR THE TRANSACTIONS CONTEMPLATED HEREIN OR RELATED HERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS MASTER LEASE BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS   SECTION 29.4 .
 
 
16

 
 
30.         HEADINGS:
 
Section headings are inserted for convenience only and shall not affect any interpretation of this Master Lease.
 
31.         ENTIRE AGREEMENT; SUPPLEMENTAL TERMS RIDER; MULTIPARTY AGREEMENT; MODIFICATION; BINDING EFFECT:
 
(a)      There are no agreements or understandings, oral or written, between Lessor and Lessee with respect to the Equipment, other than as set forth herein and in the Supplemental Terms Rider hereto, the Multiparty Agreement and the documents referred to therein, the agreements referenced in the Multiparty Agreement and each Schedule, and this Master Lease supersedes any commitment letter, proposal letter, or other writing or agreement previously issued or entered into by Lessor with respect to Lessee and the Equipment.  This Master Lease, each Schedule, the Multiparty Agreement and the documents referred to therein contain the entire agreement between Lessee and Lessor with respect to the subject matter hereof; provided that in the event of a conflict between the terms of this Master Lease or any Schedule, on the one hand, and those of the Multiparty Agreement, on the other hand, the terms of the Multiparty Agreement shall govern. As to any contradiction between the terms of this Master Lease, on the one hand, and the terms of the Supplemental Terms Rider, on the other hand, the terms of the Supplemental Terms Rider shall control. Neither the Master Lease nor any Schedule may be altered, modified, terminated or discharged except by a writing signed by the party against whom enforcement of such alteration, modification, termination or discharge is sought.  This Master Lease and each Schedule shall be binding upon and shall inure to the benefit of Lessor, Lessee and their respective successors and assigns.
 
(b)        Any provision of this Master Lease being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Master Lease or any part of such provision in any other jurisdiction.
 
(c)        The representations, warranties and covenants of Lessee herein shall be deemed to be continuing and to survive the execution and delivery of this Master Lease and each Schedule. Each execution by Lessee of a Schedule shall be deemed a reaffirmation that (i) the representations and warranties of Lessee set forth herein are true and correct in all material respects on and as of such date, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties were true and correct as of such specified earlier date and (ii) no Event of Default has occurred and is continuing. With respect to each Schedule, the obligations of Lessee under this Master Lease (as incorporated therein) which have accrued but not been fully satisfied, performed or complied with prior to the cancellation or termination of such Schedule, shall survive the cancellation or termination thereof to the extent necessary for the full and complete performance of such obligations.

 
32.        MULTIPARTY AGREEMENT .  Notwithstanding anything in this Master Lease to the contrary, the terms of this Master Lease and any Schedule hereto are subject and subordinate in all respects to the terms of the Multiparty Agreement.  Without limiting the foregoing, any payment that is not made as of when due under this Master Lease as a result of the operation of the Multiparty Agreement will be deemed not to be a default hereunder.
 
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17

 

 
IN WITNESS WHEREOF, the parties have caused this Master Lease to be duly executed as set forth below.
 

LESSOR: CHG-MERIDIAN U.S. FINANCE, LTD.
 
 
LESSEE: CDF2 HOLDINGS, LLC
 
 
By:
/s/ John P. Sandoval
 
By:
/s/ Gary S. Loffredo
         
Name:
John P. Sandoval
 
Name:
Gary S. Loffredo
         
Title:
Executive Vice President
 
Title:
President
         
Date:
10/18/11
 
Date:
 10/18/11



 
 
S-1
Master Equipment Lease No. 8463

 


 
Exhibit A
Equipment Lease Schedule

[To be attached]




 
Exhibit A

 

Exhibit B

ACCEPTANCE CERTIFICATE NO. _____ OF ____________
FOR EQUIPMENT LEASE SCHEDULE NO._____
TO MASTER EQUIPMENT LEASE NO. __________ DATED AS OF ___________, ____
BETWEEN CHG-MERIDIAN U.S. FINANCE, LTD. (“LESSOR”)
AND CDF2 HOLDINGS, LLC (“LESSEE”)
 

 
PERMITTED SUBLESSEE:
 
                                                                     
                                                                     
                                                                     
 
Pursuant to the above referenced Schedule and Master Lease, Lessee hereby certifies that the Units of Equipment described in the Schedule and below have been delivered and installed at the location of Lessee or Permitted Sublessee described herein, have been inspected by authorized representatives of Lessee, have been found to be in good repair, condition and working order and are accepted by Lessee as Equipment under the Schedule on the Installation Date(s) set forth below.  On or as of the date set forth below as the Date of Installation/Acceptance, the applicable Permitted Sublessee (i) has executed and delivered a Certificate of Acceptance under its Permitted Sublease, which Permitted Sublessee Certificate of Acceptance is attached hereto or (ii) has been deemed to have accepted such Units pursuant to the terms of the applicable Permitted Sublease; provided that, if later, the Date of Installation/Acceptance shall be the date of purchase of the Equipment by Lessor, as buyer, from Lessee, as seller, under the applicable Sale and Leaseback Agreement.
 

Screen
Number
Projector
Type
Projector
Serial
Number
Server
Type
Server
Serial
Number
Location –
Theater Name
and Address
Installation
Date
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
 
 
Exhibit B
1

 
 
 
             
             
             
             
 


LESSEE: CDF2 HOLDINGS, LLC
 
 
 
BY:
/s/ Gary S. Loffredo
 
 
 
         
NAME:
Gary S. Loffredo
 
 
 
         
TITLE:
President
 
 
 
         
DATE:
10/18/11
 
 
 






 
Exhibit B
2
 
 

 
 
FINAL VERSION
SUPPLEMENTAL TERMS RIDER
TO MASTER EQUIPMENT LEASE NO. 8463
 
This Supplemental Terms Rider (“Rider”) amends and is incorporated into that certain Master Equipment Lease No. 8463 dated as of October 18, 2011 (the “Lease”) between CHG-MERIDIAN U.S. FINANCE, LTD (“Lessor’) and CDF2 HOLDINGS, LLC, a Delaware limited liability company (“Lessee”).
 
In addition to the terms and conditions set forth the Lease and the Schedules thereto, the following terms shall be deemed included in and a part of the Lease.  As to any contradiction between the terms of this Rider and those of the Lease or any schedule thereto, the terms of this Rider shall control.
 
1.           All payments of Rent, Impositions and other amounts payable pursuant to the terms of the Lease shall be payable as provided in the Multiparty Agreement, including without limitation the provisions of Sections 4.4 and 4.5 thereof.
 
2.           Lessor hereby directs Lessee, effective, so long as any CDF2 Loan Obligations (as defined in the Multiparty Agreement) are outstanding, to make payment of all Rent to Cinedigm Digital Funding 2, LLC, for application against the CDF2 Loan Obligations pursuant to the Multiparty Agreement and the CDF2 Loan Documents (as defined in the Multiparty Agreement).  Upon payment in full of the CDF2 Loan Obligations, Lessee shall make payment of all Rent hereunder to Lessor, subject to the terms of the Multiparty Agreement.
 
3.            As a condition precedent to any funding by Lessor under the Lease with respect to the acquisition of any Equipment, Lessor shall have received evidence reasonably satisfactory to it that all conditions to funding of the associated Senior Obligations (as defined in the Multiparty Agreement) sufficient for the acquisition of such Equipment have been or will concurrently be satisfied (or duly waived), including without limitation the release of liens required under clause (u) of Schedule 3.2 to the Senior Credit Agreement (as defined in the Multiparty Agreement) and the acceptance of the terms and conditions by Lessor and the Senior Administrative Agent (as defined in the Multiparty Agreement) of the applicable Exhibitor Approval Schedule (as defined in the Senior Credit Agreement).
 
4.           Lessee hereby acknowledges and agrees that the exercise by any Permitted Sublessee of its right to purchase any of the Equipment pursuant to its Permitted Sublease may be effected only if and to the extent Lessee is permitted to exercise at such time its purchase option under the Lease as to such Equipment and only if Lessee does exercise such purchase option in compliance with the terms of the Lease.
 
5.           One or more of the following events listed on Annex I hereto shall constitute a "Senior Credit Agreement Tier 1 Event of Default".  Lessee and Lessor agree that any Senior Credit Agreement Tier 1 Event of Default shall be an Event of Default.
 
6.            One or more of the following events listed on Annex II hereto shall constitute a "Senior Credit Agreement Tier 2 Event of Default". Lessee and Lessor agree that any Senior Credit Agreement Tier 2 Event of Default shall be an Event of Default.
 

 

 

7.            One or more of the following events listed on Annex III hereto shall constitute a "Senior Credit Agreement Tier 3 Event of Default". Lessee and Lessor agree that any Senior Credit Agreement Tier 3 Event of Default that remains unremedied for 30 days after the occurrence thereof shall be an Event of Default.
 
8.           Lessee and Lessor agree that it shall be an Event of Default if Section 7.9 (Use of Proceeds), or any comparable provision, of the Senior Credit Agreement shall be amended to permit the use of Senior Loans for any purpose other than the acquisition of Equipment and purposes incidental thereto as contemplated by the Senior Credit Agreement as in effect on the date hereof..
 
9.           Lessee and Lessor agree that it shall be an Event of Default if Section 7.12 (Required Hedging), or any comparable provision or defined terms relevant thereto, of the Senior Credit Agreement shall be amended without the consent of Lessor.
 
10.           Lessee shall pay to Lessor the Lease Administration Fee as provided in the Multiparty Agreement.
 

 

 
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  2
 

 

Lessee and Lessor have caused this Rider to be executed as of the date of the Lease.
 
CHG-MERIDIAN U.S. FINANCE, LTD.
(Lessor)
 
 
 
CDF2 HOLDINGS, LLC
(Lessee)
 
 
By:
  /s/ John P. Sandoval  
By:
  /s/ Gary S. Loffredo
Name:
  John P. Sandoval  
Name:
  Gary S. Loffredo
Title:
  Executive Vice President  
Title:
  President

 
 
 

 



S-1
Supplemental Terms Rider to Master Lease
 
 

 

ANNEX I
 
Senior Credit Agreement Tier 1 Events of Default

For purposes of this Annex I, "Senior Credit Agreement Event of Default" means any "Event of Default" as defined in the Senior Credit Agreement.  One or more of the following events shall constitute a "Senior Credit Agreement Tier 1 Event of Default":

(a)           a Senior Credit Agreement Event of Default described in Section 9.1(a) of the Senior Credit Agreement; or
 
(b)           a Senior Credit Agreement Event of Default described in Section 9.1(e) of the Senior Credit Agreement; or
 
(c)           a Senior Credit Agreement Event of Default described in Section 9.1(g)(i) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from the failure of any material provision of the Multiparty Agreement to be valid and binding on, or enforceable against any party thereto) of the Senior Credit Agreement; or
 
(d)           a Senior Credit Agreement Event of Default described in Section 9.1(o) of the Senior Credit Agreement; or
 
(e)           a breach by the Lessor of Section 8.2 or Section 8.3 of the Multiparty Agreement.
 

 

Annex I
 
 

 

ANNEX II
 
Senior Credit Agreement Tier 2 Events of Default

For purposes of this Annex II, (i) "Senior Credit Agreement Event of Default" means any "Event of Default" as defined in the Senior Credit Agreement, (ii) "Senior Loan Party" means any "Loan Party" as defined in the Senior Credit Agreement, (iii) "Senior Group Member" means any "Group Member" as defined in the Senior Credit Agreement, and (iv) "CDF2 Loan Agreement" has the meaning set forth in the Multiparty Agreement.  One or more of the following events shall constitute a "Senior Credit Agreement Tier 2 Event of Default":

(a)           a Senior Credit Agreement Event of Default described in Section 9.1(b) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from a representation, warranty or certification made or deemed made under Section 4.5 or Section 4.6 of the Senior Credit Agreement proving to have been incorrect in any material respect (without duplication of any materiality qualifier contained therein) when made or deemed made); or
 
(b)           a Senior Credit Agreement Event of Default described in Section 9.1(c) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from the failure of any Senior Loan Party to comply with Section 5.2 , Section 5.3 , Section 5.4 , Section 7.5 , Section 7.11 , Section 8.1 or Section 8.2 of the Senior Credit Agreement); or
 
(c)           a Senior Credit Agreement Event of Default described in Section 9.1(f) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from money judgments, orders and decrees that (i) involve an aggregate amount (excluding amounts adequately covered by insurance payable to a Senior Group Member, to the extent the relevant insurer has not denied coverage therefor) in excess of $5,000,000 or (ii) would reasonably be expected to have, in the aggregate, a Material Adverse Effect (as defined in the Senior Credit Agreement); or
 
(d)           a Senior Credit Agreement Event of Default described in Section 9.1(g)(i) or Section 9.1(g)(ii) of the Senior Credit Agreement (other than any such Senior Credit Agreement Event of Default that constitutes a Senior Credit Agreement Tier 1 Event of Default); or
 
(e)           a Senior Credit Agreement Event of Default described in Section 9.1(h) of the Senior Credit Agreement; or
 
(f)           a Senior Credit Agreement Event of Default described in Section 9.1(i) thereof (but only in so far as such Senior Credit Agreement Event of Default results in or from the failure of a Distributor (as defined in the Senior Credit Agreement) party to a Material Digital Cinema Deployment Agreement (as defined in the CDF2 Loan Agreement) to pay, when the same becomes due and payable, amounts owing under such Material Digital Cinema Deployment Agreement; or
 
(g)           a Senior Credit Agreement Event of Default described in Section 9.1(j) thereof (but only in so far as such Senior Credit Agreement Event of Default results in or from the
 
Annex II
 

 
 
 
failure of an Exhibitor (as defined in the Senior Credit Agreement) party to a Material Exhibitor Agreement (as defined in the CDF2 Loan Agreement) to pay, when the same becomes due and payable, amounts owing under such Material Exhibitor Agreement); or
 
(h)           a Senior Credit Agreement Event of Default described in Section 9.1(r) of the Senior Credit Agreement; or
 
(i)           a breach of Section 8.2 or Section 8.3 of the Multiparty Agreement (other that any such breach that constitutes a Senior Credit Agreement Tier 1 Event of Default).
 

 

 

Annex II
 
 

 
POSTED VERSION

ANNEX III
 
Senior Credit Agreement Tier 3 Events of Default

For purposes of this Annex III, (i) "Senior Credit Agreement Event of Default" means any "Event of Default" as defined in the Senior Credit Agreement and (ii) "Senior Loan Party" means any "Loan Party" as defined in the Senior Credit Agreement.  One or more of the following events shall constitute a "Senior Credit Agreement Tier 3 Event of Default":

(a)           a Senior Credit Agreement Event of Default described in Section 9.1(b) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from a representation, warranty or certification made or deemed made under Section 4.1(a) , Section 4.1(d) , Section 4.1(e) , Section 4.2 , Section 4.4 , Section 4.9 , Section 4.11 , Section 4.15 , Section 4.22 , Section 4.23 , Section 4.24 or Section 4.25 of the Senior Credit Agreement proving to have been incorrect in any material respect (without duplication of any materiality qualifier contained therein) when made or deemed made); or
 
(b)           a Senior Credit Agreement Event of Default described in Section 9.1(c) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from the failure of any Senior Loan Party to comply with any of the following covenants in the Senior Credit Agreement: Section 5.1 , Section 6.1(a) , Section 6.1(b) , Section 6.1(c) , Section 6.1(d) , Section 6.1(i) , Section 6.1(j) , Section 7.1 , Section 7.2 , Section 7.9 , Section 7.10 , Section 7.12 through 7.16 , Section 7.18 , Section 7.19 , Sections 8.3 through 8.11 , Section 8.13 or Section 8.16 ; or
 
(c)           a Senior Credit Agreement Event of Default described in Section 9.1(d) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default relates to Indebtedness having a principal amount of $1,000,000 or more); or
 
(d)           a Senior Credit Agreement Event of Default described in Section 9.1(f) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from money judgments, orders and decrees that involve an aggregate amount of $1,000,000 - $5,000,000 (excluding amounts adequately covered by insurance payable to a Senior Group Member, to the extent the relevant insurer has not denied coverage therefor); or
 
(e)           a Senior Credit Agreement Event of Default described in Section 9.1(i) thereof (other than any such Senior Credit Agreement Event of Default that constitutes a Senior Credit Agreement Tier 2 Event of Default); or
 
(f)           a Senior Credit Agreement Event of Default described in Section 9.1(j) thereof (other than any such Senior Credit Agreement Event of Default that constitutes a Senior Credit Agreement Tier 2 Event of Default); or
 
 
3
 

 
 
 
(g)           a Senior Credit Agreement Event of Default described in Section 9.1(k) of the Senior Credit Agreement; or
 
(h)           a Senior Credit Agreement Event of Default described in Section 9.1(l) of the Senior Credit Agreement; or
 
(i)           a Senior Credit Agreement Event of Default described in Section 9.1(p) of the Senior Credit Agreement; or
 
(j)           a Senior Credit Agreement Event of Default described in Section 9.1(t) of the Senior Credit Agreement.
 
 
 
4
 

 
 

 
 
LESSOR HAS ASSIGNED OR GRANTED A SECURITY INTEREST IN THIS EQUIPMENT LEASE SCHEDULE AND THE MASTER EQUIPMENT LEASE TO WHICH IT RELATES TO SOCIETE GENERALE, NEW YORK BRANCH, AS COLLATERAL AGENT FOR CERTAIN SECURED PARTIES






CHG-MERIDIAN
U.S. Finance, Ltd.


EQUIPMENT LEASE SCHEDULE NO. 001
TO MASTER EQUIPMENT LEASE NO. 8463
 DATED AS OF OCTOBER 18, 2011
BETWEEN
CHG-MERIDIAN U.S. FINANCE, LTD. ("LESSOR")
AND CDF2 HOLDINGS, LLC ("LESSEE")


SECTION I - EQUIPMENT DESCRIPTION AND TERMS

PERMITTED SUBLESSEE:
 
MARCUS THEATRES CORPORATION
100 E. Wisconsin Avenue, Suite 1900
Milwaukee, WI 53202
   

 
A.
EQUIPMENT DESCRIPTION :  This Schedule is for certain equipment (the “Equipment”) and more generally described as:

(SEE ATTACHMENT A TO EQUIPMENT SCHEDULE NO. 001)

The Equipment shall be more particularly described on each Certificate of Acceptance executed and delivered by Lessee.  Each Certificate of Acceptance shall be numbered in consecutive order (such as Certificate of Acceptance for Schedule 001 No. 1, Certificate of Acceptance for Schedule 001 No. 2).  Each Certificate of Acceptance shall have attached a Certificate of Acceptance issued by the applicable Permitted Sublessee under its Permitted Sublease, and a confirmation that all conditions to funding have been or shall concurrently be satisfied under the Senior Credit Agreement of the Senior Obligations (as those terms are defined in the Multiparty Agreement) required to fund the acquisition of the Equipment, which shall serve as authorization for Lessor to make payment in accordance with the terms and conditions of the Master Lease.

B.
EQUIPMENT LOCATION :  As specified on Attachment A and in the Certificate of Acceptance

C.
INITIAL TERM :  66 months

D.
COMMENCEMENT DATE :  October 18, 2011

E.
LESSOR COST :  Shall be the total purchase price of the Equipment paid by Lessor pursuant to the applicable Sale and Leaseback Agreement between Lessor, as buyer, and Lessee, as seller.

F.
MONTHLY RENT :

From the Commencement Date until the end of the Availability Period, as defined in the Multiparty Agreement:
15 months (November 18, 2011 to January 18, 2013) at $216,300 (618 units x $350 per unit), including a pro-rated rent for any partial month.

Months 16 to 66 (February 18, 2013 to April 18, 2017) at $482,040 (618 units x $780 per unit).



SECTION II - SPECIAL TERMS AND CONDITIONS

1.
MANDATORY RENEWAL TERM :  At the expiration of the Initial Term of this Schedule, the term of this Schedule shall automatically renew, without further action or election by Lessee or Lessor, for a mandatory renewal term (the “Mandatory Renewal Term”) equal to 6 months, at a rental rate equal to the rental rate during the Initial Term.


 

 
 

 

2.
RENEWAL AND PURCHASE OPTION AT END OF INITIAL TERM (INCLUDING ANY MANDATORY RENEWAL TERM) :   Provided no Event of Default has occurred and is continuing under the terms of this Schedule, and all amounts due are paid, and upon 60 days prior written notice to Lessor, Lessee shall have the option to either:  (a) negotiate with Lessor for the purchase of the Equipment from Lessor at such price as Lessor may determine in its discretion; or (b) renew the term of this Schedule as to all but not less than all of the Equipment at the expiration of any Mandatory Renewal Term, or if no Mandatory Renewal Term, at the expiration of the Initial Term, for a fixed renewal term of at least 42 months, or such shorter period as may be agreed to by Lessor and Lessee (“Renewal Term”), at a rental rate equal to the rental rate during the Initial Term.

3.
FAIR MARKET VALUE PURCHASE OPTION AT END OF RENEWAL TERM :  The purchase price (“Purchase Price”)  shall be equal to the Fair Market Value in place (as determined below)  of the Equipment to be purchased as of the date the Purchase Notice is given to Lessee. In the event all costs have been recouped on a Digital Cinema Projection System as confirmed and verified by the Studios and the Financing Parties, the Existing Cineplex Fee or New Build Cineplex fee originally paid by Exhibitor for that Digital Cinema Projection System may be deducted from the fair market value in place for that Digital Cinema Projection System, provided, no credit or refund in excess of the Fair Market Value in place shall be given in the event the applicable Existing Cineplex Fee or New Build Cineplex Fee exceeds the Fair Market Value in place for that Digital Cinema Projection System. The Fair Market Value in place of the Equipment shall be determined by an independent third party appraiser selected by Exhibitor and reasonably approved by Lessee, provided, Exhibitor may obtain up to three (3) such independent third party appraisals, and in the event all costs have been recouped on Equipment being purchased, Exhibitor may select one of the appraisals as the Fair Market Value in place of the Equipment. If all costs have not been recouped or Exhibitor fails to select an appraisal as the Fair Market Value in place, then the Fair Market Value in place shall be determined by averaging the obtained appraisals. Any Exhibitor enhancements made to the Equipment made in accordance with Section 26 (b), which Exhibitor enhancements were paid for by Exhibitor and were not required to be made by Exhibitor under the terms of this Agreement, shall be excluded from the appraisal. Exhibitor shall be solely responsible to pay the appraisal fee.

4.
RENEWAL OR TERMINATION UPON PREPAYMENT .  In the event that the Senior Obligations are prepaid in full by prepayment prior to the end of the Initial Term and any Mandatory Renewal Term, and the corresponding obligations of Lessee as to payment of Rent under this Schedule during the Initial Term and any Mandatory Renewal Term have been satisfied as well as required under the Multiparty Agreement, then the Initial Term and any then effective Mandatory Renewal Term under this Schedule shall be deemed terminated and Lessee shall have the option to either:  (a) return the Equipment in compliance with Sections 2.1 and 13 of the Master Equipment Lease; or (b) renew the term of this Schedule for a fixed renewal term of at least 42 months, or such shorter period as may be agreed to by Lessor and Lessee, at a rental rate equal to the rental rate during the Initial Term, which renewal term and rental payment obligation shall commence immediately.  If in connection with any such prepayment of the Senior Obligations Lessee wishes to prepay its obligations hereunder and under the Master Lease Agreement in an amount in excess of that which is payable during the Initial Term and any Mandatory Renewal Term, such excess shall be applied to reduce the Rent Balance (calculated to include the Rent due during the renewal term under the foregoing clause (b)) in inverse order of maturity.
 
 
 
 

-2-
 
 

 



The terms and conditions of the Master Lease are hereby incorporated and made a part hereof as if such terms and conditions were fully set forth herein.


LESSOR:
CHG-MERIDIAN U.S. FINANCE, LTD.
 
 
LESSEE:
CDF2 HOLDINGS, LLC
 
 
By:
/s/ John P. Sandoval
 
By:
/s/ Gary S. Loffredo
         
Name:
John P. Sandoval
 
Name:
Gary S. Loffredo
         
Title:
Executive Vice President
 
Title:
President
         
Date:
10/18/11
 
Date:
 10/18/11





EXHIBIT 10.4
 
 
Execution Version

LESSOR HAS ASSIGNED OR GRANTED A SECURITY INTEREST IN THIS MASTER EQUIPMENT LEASE AND EACH SCHEDULE HERETO TO SOCIETE GENERALE, NEW YORK BRANCH, AS COLLATERAL AGENT FOR CERTAIN SECURED PARTIES.

 
 
 
CHG LOGO
 
 
AGREEMENT NO.  8465
CHG-MERIDIAN U.S. Finance, Ltd.
21800 Oxnard Street, Suite 410
Woodland Hills, CA 91367
Phone:  (818) 702-1800
Fax:  (818) 702-1821

MASTER EQUIPMENT LEASE
 
This MASTER EQUIPMENT LEASE (“Master Lease”) is effective as of October 18, 2011 (the "Effective Date"), and is by and between CHG-MERIDIAN U.S. Finance, Ltd., a California corporation (“Lessor”), having its principal office at 21800 Oxnard Street, Suite 410, Woodland Hills, CA  91367, and CDF2 Holdings, LLC, a Delaware limited liability company ("Lessee"), having its principal office at 55 Madison Avenue, Suite 300, Morristown, NJ  07960.
 
IN CONSIDERATION OF the mutual agreements contained in this Master Lease, the parties agree as follows:
 
1.      PROPERTY LEASED; TITLE:
 
1.1                 Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the personal property, together with all replacements, parts, repairs, additions, attachments and accessories incorporated therein (individually called a “Unit” and collectively called the “Equipment”) described in each Equipment Lease Schedule executed from time-to-time pursuant to this Master Lease and substantially in the form attached hereto as Exhibit A (each a “Schedule”).  Each Schedule shall incorporate all of the terms and conditions of this Master Lease, shall contain such additional terms as Lessee and Lessor shall agree upon, but shall not constitute a separate agreement separate and distinct from this Master Lease and any other Schedule.  In other words, each Schedule shall be incorporated into and deemed a part of this Master Lease.  In the event of a conflict between the provisions of this Master Lease and a Schedule, the provisions of the Schedule shall prevail with respect to that Schedule.
 
1.2                 It is expressly understood that the Equipment is, and shall at all times remain, personal property of Lessor.  Lessee shall have no right, title or interest in the Equipment except as expressly provided herein.  If Lessor supplies Lessee with labels, plates or other markings stating that the Equipment is owned by Lessor, Lessee shall attach the same in a prominent place on the Equipment in accordance with Lessor’s reasonable request.
 
2.      TERM; RENT:
 
2.1                 This Master Lease shall commence on the Effective Date and shall continue so long as any Schedule remains in effect. Each Schedule shall set forth the initial term of the Schedule (“Initial Term”), the Monthly Rent for each Unit of equipment (“Monthly Rent”), the date of the purchase by Lessor of each Unit pursuant to the applicable Sale and Leaseback Agreement between Lessor, as buyer, and Lessee, as seller (“Commencement Date”), the installation date of each Unit (“Installation Date”; which shall be the later of (i) the date of acceptance or deemed acceptance of the Unit pursuant to the Acceptance Certificate (Exhibit B) and (ii) the Commencement Date), the installation location of each Unit (“Equipment Location”), the amount of Use Tax attributable to each Unit and all other additional terms.  The Initial Term for a Schedule shall begin on the Commencement Date and shall continue thereafter for the number of months specified therein.

 

 

 
Lessee may terminate any Schedule at the end of any full month effective at the expiration of the Mandatory Renewal Term (as defined in the Schedule), if any, or the Initial Term (if no Mandatory Renewal Term) or any extension thereof, by giving Lessor (i) in the event Lessee elects to return the Equipment pursuant to Section 13 hereof, 180 days prior written notice, and (ii) in the event Lessee elects to renew the lease of the Equipment or to negotiate for the purchase of the Equipment from Lessor, 60 days prior written notice.  If such written notice is not given by Lessee, or if Lessee negotiates for the purchase of the Equipment from Lessor but such purchase is not closed, the Initial Term or any Mandatory Renewal Term, as applicable, shall be automatically extended thereafter on a month-to-month basis at the same Monthly Rent, until terminated by Lessor or Lessee giving the required notice as provided above and upon expiration of the applicable notice period.  Any notice of termination or renewal must relate to all the Equipment under a Permitted Sublease (as hereinafter defined) and may not be unilaterally revoked.
 
2.2                 Subject to the Supplemental Terms Rider to this Lease, beginning on the Commencement Date, Lessee shall accrue payment obligations to Lessor for the Monthly Rent.  Commencing on the earlier of the third calendar month following the Commencement Date or the 15 th calendar month following the Effective Date, such Monthly Rent shall be payable on the 15 th day of each month during the Initial Term or any extension thereof (or if that day is not a business day, the next business day thereafter).  Monthly Rent for the Equipment shall be as specified in the Schedule, and shall be payable at Lessor’s address set forth above, or at such other address as Lessor may designate in writing, without further notice or demand therefor. Whenever any payment due hereunder is not made when due, Lessee shall pay interest on such amount at the rate of two (2) percentage points (200 basis points) per annum above the implied rate of interest payable as a component of Rent, or the maximum interest rate legally permissible in the state specified in Section 29, whichever is less (“Late Payment Rate”).
 
2.3                 In the event any amounts are payable under Section 4.4(l)(C) or Section 4.5(l)(A)(z) or (B) of the Multiparty Agreement dated as of October 18, 2011, among Lessor, Lessee and the other parties thereto (the “Multiparty Agreement”) as a prepayment of Specified Senior Obligations (as defined in the Multiparty Agreement), such amounts shall be payable to Lessor as "Variable Rent" hereunder.  If applicable, Variable Rent corresponding to amounts payable under Section 4.4(l)(C) of the Multiparty Agreement shall be payable monthly on the 15 th day of each month in which any such Variable Rent is payable under the Multiparty Agreement (or if that day is not a business day, the next business day thereafter) and Variable Rent corresponding to amounts payable under Section 4.5(l)(A)(z) or (B) of the Multiparty Agreement shall be payable in quarterly installments on the 15 th day of every January, April, July and October (or if that day is not a business day, the next business day thereafter).  Variable Rent shall be applied to reduce the Rent Balance (as hereinafter defined) in inverse order of maturity.
 
2.4                 On the Installation Date of each Unit, Lessee shall deliver to Lessor a prepaid reserve in the amount of One Thousand Four Hundred Dollars ($1,400) per Unit (the "Prepaid Reserve") to be held by Lessor as security for Lessee's failure to make any payment of Monthly Rent or Variable Rent (such amount, a "Rent Shortfall"), or for any other payment obligations of Lessee under this Master Lease.  In the event of a Rent Shortfall, Lessor may, but shall not be required to, use, apply or retain all or any part of the Prepaid Reserve for the payment of the Rent Shortfall or for any other payment obligations of Lessee.  Lessor shall be permitted to withhold the Prepaid Reserve from payment proceeds under the applicable Sale and Leaseback Agreement.
 
3.      NET LEASE:
 
Each Schedule executed hereunder shall constitute a net lease and Lessee agrees to pay all Monthly Rent, Variable Rent and any and all monies due and payable hereunder (collectively, “Rent” and the total amount thereof as determined as of a given date, the “Rent Balance”). Other sums may include but are not limited to casualty value, late fees, tax reimbursements, and end of lease payments, etc., shall be absolute and unconditional and shall not be subject to any abatement, reduction, set-off, defense, counterclaim or recoupment (“Abatements”) whatsoever, including without limitation, Abatements due to any past, present or future claims arising under this Master Lease regardless whether an invoice has been received in a form acceptable to Lessee, any Schedule or otherwise of

 

 

 
Lessee against Lessor or any assignee of Lessor permitted under Section 14 hereof (each, an “Assignee”), or against the manufacturer or seller of any Unit or against any other person or entity.
 
4.      ACCEPTANCE:
 
Lessee represents and warrants that: (a) it or a Permitted Sublessee (as defined in Section 15) has selected each Unit based on such party’s own judgment and expressly disclaims any reliance upon statements made by Lessor, and (b) as of the Installation Date, as between Lessee and Lessor, Lessee shall have unconditionally accepted such Unit.  On any Installation Date, Lessee and the Permitted Sublessee will execute and deliver an Acceptance Certificate, substantially in the form attached hereto as Exhibit B, with respect to each Unit then being installed, which Acceptance Certificate shall constitute conclusive evidence of the foregoing. Lessee shall execute a final Acceptance Certificate if requested for Equipment that is delivered on multiple Installation Dates.  Lessee hereby authorizes Lessor to complete the Unit’s serial number and/or Installation Date on Lessee’s behalf if an Acceptance Certificate has been returned incomplete. In the event Lessee or a Permitted Sublessee rejects any of the Equipment for any reason, Lessor shall assign to Lessee all of Lessor’s interest therein and Lessee or a Permitted Sublessee shall reimburse and indemnify Lessor for any reasonable, out-of-pocket costs, expenses, fees, charges or other items incurred by Lessor in connection therewith.
 
5.      WARRANTIES; DISCLAIMER OF WARRANTIES:
 
5.1                 Lessor warrants that so long as no Event of Default (as defined in Section 9 hereof) has occurred and is continuing hereunder, (i) Lessee and each Permitted Sublessee shall have the right of quiet and peaceful use, possession and enjoyment of the Equipment, subject to and in accordance with the provisions of this Master Lease, and (ii) notwithstanding any assignment, transfer, or grant of security interest by Lessor, neither Lessor nor any Assignee (as hereinafter defined) shall interfere with Lessee’s or any Permitted Sublessee’s right of quiet enjoyment of the Equipment.
 
5.2                 LESSOR MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY OR ITS FITNESS OR CAPACITY OR DURABILITY FOR ANY PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT OR CONFORMITY OF THE EQUIPMENT TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE ORDER OR ORDERS RELATING THERETO, AND LESSOR EXPRESSLY DISCLAIMS THE SAME, AND, AS TO LESSOR, LESSEE LEASES THE EQUIPMENT “AS IS”. LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY, INDIRECTLY, INCIDENTALLY OR CONSEQUENTIALLY BY THE EQUIPMENT, OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN, BY ANY INCIDENT WHATSOEVER IN CONNECTION THEREWITH, ARISING IN STRICT LIABILITY, NEGLIGENCE OR OTHERWISE.  Notwithstanding the foregoing, provided no Event of Default shall have occurred and is continuing hereunder, Lessee shall be entitled to the benefit of any applicable manufacturer’s warranties and such warranties are hereby assigned by Lessor for the benefit of Lessee, to the extent held by Lessor and to the extent assignable.  Lessee acknowledges that the Equipment was ordered from the supplier by Lessee or a Permitted Sublessee, and either (a) Lessee received a copy of the contract by which the Equipment was acquired, or (b) Lessor has informed Lessee in writing of (i) the identity of the supplier, (ii) that Lessee may have rights under said contract and may be entitled, under the version of Uniform Commercial Code Article 2A (“UCC 2A”) as in effect in the state specified in Section 29, to the benefit of warranties provided to Lessor by such supplier, and (iii) that Lessee may and should contact the supplier to receive an accurate and complete description of such rights including any disclaimers or limitations on them or of the remedies thereunder. Lessee makes this acknowledgment so that such each Schedule shall qualify as and be a “finance lease” under UCC 2A.

 

 

 
6.      LIENS; TAXES:
 
6.1                 Lessee shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, lien, security interest, charge, encumbrance or claim (each a “Lien”) on or with respect to this Master Lease or any Schedule, the Equipment, title thereto or any interest therein except a Lien contemplated under the Multiparty Agreement or the Senior Credit Agreement or created by Lessor or Assignee, and Lessee shall immediately at its own expense take all actions as may be necessary to discharge any Lien not permitted hereby.
 
6.2                 Subject to the Supplemental Terms Rider, Lessee or a Permitted Sublessee shall file and pay all income, ad valorem, value added, leasing, leasing use, stamp or other taxes, levies, imposts, duties, charges or withholdings of any nature arising out of the transactions contemplated herein and imposed against Lessor, Lessee, or the Equipment by any federal, state, local, or foreign government or taxing authority upon or with respect to the Equipment or upon the sale, purchase, ownership, delivery, leasing, possession, use, operation, return or other disposition thereof, or upon the Rent, receipts or earnings arising therefrom, or upon or with respect to this Master Lease (“Impositions”), excluding, however, Impositions on, or measured solely by, the gross or net income of Lessor (other than sales or use taxes) and franchise or similar taxes based on Lessor’s business existence or status (“Excluded Impositions”).  Lessee or a Permitted Sublessee shall reimburse Lessor for all Impositions (other than Excluded Impositions) to the extent paid by Lessor.  Lessee or a Permitted Sublessee shall also reimburse Lessor for all sales or use taxes assessed on Rent, property tax assessed on Equipment, installation, transportation or other services relating to the Equipment to the extent Lessor does not withdraw the same from the Use Tax Account (as defined in the Multiparty Agreement).  In the event Lessee or a Permitted Sublessee either self assesses sales or use tax or is required to pay directly sales tax or use tax or any Imposition relating to any charge made by Lessor to Lessee, Lessee or such Permitted Sublessee promptly shall forward copies of all pertinent returns or audit documents to Lessor.  Lessee shall not report any Equipment as directly assessable to Lessee without the prior consent of Lessor, which consent shall not be unreasonably withheld.  Any penalties, fines, or interest relating to returns to be filed by Lessee or payments to be made by Lessee directly to any taxing authority and later assessed to Lessor shall be paid by Lessee. Lessee or a Permitted Sublessee may contest, in good faith, any Impositions, but such contest shall not relieve Lessee of its indemnification and reimbursement obligations to Lessor hereunder, provided, that Lessor shall reasonably cooperate with the Lessee, at Lessee’s expense, in contesting any such Impositions. All payments and advances made by Lessor on behalf of Lessee shall be added to Lessee’s Rent Balance and shall be reimbursed by Lessee, including but not limited to, all Impositions owed directly by Lessor for which Lessee has responsibility for reimbursement hereunder and all amounts advanced by Lessor to pay Impositions (other than Excluded Impositions) otherwise owed by Lessee.
 
7.      INDEMNIFICATION:
 
Except for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify and hold harmless Lessor, Assignees, and their respective successors, employees, officers and/or agents (herein “Indemnified Persons”), from and against any loss (including any loss of tax benefits or creation of tax liability  arising as a result of an act, omission or misrepresentation of Lessee), liabilities, damages, penalties, claims, suits, out-of-pocket costs and expenses and disbursements at law or in equity, including reasonable attorney’s fees, imposed on, incurred by or asserted against the Indemnified Persons arising out of the leasing, ownership, use, possession, control, maintenance, operation and transportation of the Equipment, including but not limited to, claims for patent, trademark or copyright infringement and claims for property damage, personal injury or wrongful death arising in strict liability or negligence.  All indemnities contained in any section of this Master Lease, including this Section 7, shall survive, unless waived, the expiration or other termination of this Master Lease or any Schedule with respect to acts or events occurring or alleged to occur prior to return of any Unit to Lessor and are expressly made for the benefit of, and shall be enforceable by any or all of the Indemnified Persons.
 
8.      USE; INSTALLATION; MAINTENANCE; INSPECTION:

 

 

 
8.1                 Lessee shall comply with in all material respects all applicable laws, regulations and orders of any governmental branch or agency which relate to the installation, use, possession or operation of the Equipment, and shall use the Equipment in the regular course of its business only, within its normal capacity, without abuse; provided that compliance by a Permitted Sublessee of the applicable Equipment with its use, installation and maintenance obligations under any agreement between Lessee and a Permitted Sublessee permitted by or contemplated under the Multiparty Agreement (“Permitted Sublease”) shall be deemed to be compliance by Lessee with such obligations under this Section.
 
8.2                 Lessee or the applicable Permitted Sublessee shall pay or cause to be paid all installation, transportation, rigging, unpacking and repacking, drayage, handling and insurance charges on the Equipment upon delivery to Lessee or the Permitted Sublessee and upon redelivery to Lessor upon the expiration or earlier termination of the Initial Term or any extension thereof, to such destination as is specified by Lessor within the continental United States of America (“Return Location”); provided Lessor hereby agrees that the Return Location shall be no more than 500 miles from the installed location of the Equipment.  Lessee or the applicable Permitted Sublessee pursuant to its Permitted Sublease shall furnish appropriate installation facilities for the Equipment.
 
8.3                 Lessee or the applicable Permitted Sublessee, at its own expense, shall maintain the Equipment in good operating condition, repair and appearance, and protect the same from deterioration other than normal wear and tear, and shall enter into, and keep in force a maintenance agreement with the manufacturer of the Equipment.  Lessee or the applicable Permitted Sublessee shall cause the manufacturer, or other Lessor authorized warranty maintenance provider, in accordance with the manufacturers standards so as not to void any manufacturer warranty to keep the Equipment in good and efficient working order, less normal wear and tear, in full compliance and in accordance with the provisions of such maintenance agreement and shall furnish evidence of such agreement to Lessor upon request; provided that compliance by the applicable Permitted Sublessee with the maintenance and servicing standards and covenants imposed by the applicable Permitted Sublease shall be deemed to be compliance by Lessee with the foregoing requirements of this Section.
 
8.4                 Upon prior written notice to Lessee and subject to reasonable security procedures, Lessee shall permit, or use commercially reasonable efforts to cause the applicable Permitted Sublessee to permit, Lessor or its designee to inspect the Equipment, equipment logs and maintenance records; provided that compliance with the inspection rights and access set forth in the applicable Permitted Sublease shall be deemed to be compliance with the requirements of this Section.
 
9.      DEFAULT:
 
Subject to the Supplemental Terms Rider, the occurrence of any of the following events hereunder or under any Schedule shall constitute a default by Lessee under this Master Lease (“Event of Default”):
 
(a)      Lessee shall fail to pay when due any Rent and such failure continues unremedied for a period of three (3) business days;
 
(b)      Except for defaults covered by Paragraph (a) above, Lessee shall fail to perform or observe any covenant, condition or agreement to be performed or observed by it hereunder or under any Schedule and such failure continues unremedied for thirty (30) days after the earlier of (A) the date on which a responsible officer of Lessee becomes aware of such failure and (B) the date on which notice thereof shall have been given to the Lessee by the Lessor; provided that Lessee shall only be allowed one 30-day grace period in any 12-month period and four 30-day grace periods during the term of this Master Lease, including grace periods extended under clause (g) below;
 
(c)      Lessee shall have made any representation or warranty herein, or in any document or certificate executed by Lessee incident herein, which is found to have been false in any material respect at the time such representation or warranty was made;
 
(d)      Lessee shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors, (ii) any proceeding shall be instituted by or against Lessee seeking to adjudicate it a bankrupt or insolvent or

 

 

 
seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, composition of it or its debts or any similar order, in each case under any applicable aw relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the entry of an order for relief or the appointment of a custodian, receiver, trustee, conservator, liquidating agent, liquidator, other similar official or other official with similar powers, in each case for it or for any substantial part of its property and, in the case of any such proceedings instituted against (but not by or with the consent of) Lessee, either such proceedings shall remain undismissed or unstayed for a period of 60 days or more or any action sought in such proceedings shall occur or (iii) Lessee shall take any corporate or similar action or any other action to authorize any action described in clause (i) or (ii) above;
 
(e)      Lessee shall attempt to remove, sell, transfer, encumber, part with possession or sublet the Equipment or any Unit, except as expressly permitted hereunder or under a Permitted Sublease;
 
(f)      Lessee shall fail to obtain and maintain the insurance required herein and such failure continues unremedied for thirty (30) days after the earlier of (A) the date on which a responsible officer of Lessee becomes aware of such failure and (B) the date on which notice thereof shall have been given to the Lessee by the Lessor; provided that Lessee shall only be allowed one such 30-day grace period in any 12-month period and only four such 30-day grace periods during the term of this Master Lease, including grace periods extended under clause (b) above;
 
(g) Lessee shall be in default under any other loan, lease, guaranty, or other financing contract which, if accelerated, would require a payment in excess of $250,000 and any applicable grace period shall have expired;
 
(h)                 Lessee shall have terminated its corporate, partnership, or limited liability company (as applicable) existence, consolidated with, or merged into, or conveyed or leased substantially all of its assets as an entirety to any person; or if effective voting control of the ownership interests in Lessee is not retained by the present share holders thereof; or
 
(i)      Lessee shall be in default under that certain Master Equipment Lease between Lessor and Lessee dated on or about October 18, 2011, including any Schedule thereto; or
 
(j)      the occurrence of any of the following:  (a) Cinedigm Digital Cinema Corp., a Delaware corporation, shall cease to own and control a majority of the economic and voting rights associated with ownership of the outstanding Voting Stock (as defined in the Senior Credit Agreement) of all classes of Voting Stock of Access Digital Cinema Phase 2, Corp., a Delaware corporation, (b) Access Digital Cinema Phase 2, Corp., a Delaware corporation, shall cease to own and control a majority of the economic and voting rights associated with ownership of the outstanding Voting Stock of all classes of Voting Stock of Lessee, (c) Lessee shall cease to own and control a majority of the economic and voting rights associated with ownership of the outstanding Voting Stock of all classes of Voting Stock of Cinedigm Digital Funding 2, LLC, a Delaware limited liability company, or (d) any "change in control" or similar event shall occur under the terms of any Material Digital Cinema Deployment Agreement (as defined in the Senior Credit Agreement) that results in the termination of any Material Digital Cinema Deployment Agreement by the distributor party thereto; provided, that, any of the foregoing which is consented to in advance in writing by the Required Lenders (as defined in the Senior Credit Agreement), in their sole discretion, shall not constitute an Event of Default.
 
10.                 REMEDIES:
 
Subject to the Multiparty Agreement, upon the occurrence and during the continuance of any Event of Default, Lessor may, with or without terminating this Master Lease, in its sole discretion, do any one or more of the following:
 
(a)      proceed by appropriate court action to enforce performance by Lessee of the applicable covenants of this Master Lease or any Schedule;
 
(b)      declare immediately payable all sums due and to become due hereunder for the full term of any and all Schedules to this Master Lease;

 

 

 
(c)  recover from Lessee damages, not as a penalty, but herein liquidated for all purposes and in an amount equal to Casualty Value defined as the sum of (i) any then accrued charges and unpaid Rent plus interest thereon at the Late Payment Rate, (ii) the present value of all remaining Rent contracted to be paid over the unexpired portion of the Initial Term and Mandatory Renewal Term, if any, discounted at an interest rate (the "Default Rate") equal to the yield to maturity on the  three-year (3 yr) Treasury Note published in the Federal Reserve Banks H.15 report on the applicable Commencement Date plus 325 basis points, plus interest thereon at the Late Payment Rate until paid and any additional break funding costs, (iii) all commercially reasonable out-of-pocket costs and expenses incurred by Lessor in any repossession, recovery, storage, or repair, sale, re-lease or other disposition of the Equipment, including reasonable attorney’s fees and costs incurred in connection therewith or otherwise resulting from Lessee’s default, and (iv) the present value of the fair market in-place residual value of the Equipment as of the expiration of the Initial Term or Mandatory Renewal Term, if any, or any extension thereof (as applicable), determined by Lessor in a commercially reasonable manner (taking into account the present value of all VPF (as defined in the Multiparty Agreement) payments, and other alternate content fees and like amounts payable or reasonably expected to be payable under the applicable Permitted Sublease over the expected life of the Equipment discounted at the Default Rate), in each case, net of all costs, expenses, and other deductions from revenues and earnings provided in Sections 4.4 and 4.5 of the Multiparty Agreement, such determination to be conclusive absent manifest error.  In the event Lessor recovers from Lessee the full measure of damages under this Section 10(c), Lessor shall transfer title to the Equipment to Lessee, on an as-is, where-is basis, without representation or warranty.
 
(d)      re-lease or sell any or all of the Equipment at a public or private sale, with the privilege of becoming the purchaser or lessee thereof, on such terms and notice as Lessor shall deem reasonable, and thereafter Lessor shall apply the proceeds derived therefrom as follows, Lessee remaining liable for any deficiency: first, to reimburse Lessor for all reasonable out-of-pocket costs and expenses incurred by Lessor in any repossession, recovery, storage, repair, sale, re-lease, or other disposition for the Equipment, including reasonable attorneys' fees, commissions, and brokers' fees, and costs incurred in connection therewith or otherwise resulting from Lessee's default; second, to pay Lessor any amounts owing hereunder; and third, any surplus remaining thereafter to Lessee;
 
(e)      take possession (by summary proceedings or otherwise) of the Equipment without prejudice to any other remedy or claim referred to herein, subject to any subordination, non-disturbance and attornment agreements with Permitted Sublessees; and
 
(f)      exercise any other right or remedy which may be available to it under the Uniform Commercial Code or any other applicable law.
 
Subject to the Multiparty Agreement and any subordination, non-disturbance and attornment agreements with Permitted Sublessees, a termination hereunder shall occur only upon notice by Lessor and only as to such Equipment as Lessor specifically elects to terminate and this Master Lease and all Schedules hereto shall continue in full force and effect as to the remaining Equipment, if any.  No remedy referred to in this Section is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity.  No express or implied waiver by Lessor of any default shall constitute a waiver of any other default by Lessee or a waiver of any of Lessor’s rights.
 
11.                 DAMAGE; DESTRUCTION OR LOSS:
 
11.1 Upon delivery of the Equipment to Lessee or a Permitted Sublessee until the Equipment is redelivered to Lessor, Lessee shall bear the entire risk of loss, damage, or destruction with respect to the Equipment resulting from any cause whatsoever.
 
11.2                  If any Unit becomes damaged, partially damaged or damaged beyond repair, lost, stolen, destroyed or permanently rendered unfit, or in the event of any condemnation or requisition of title or use of any Unit by any governmental authority (any such occurrence being hereinafter referred to as an “Event of Loss”), then Lessee shall promptly notify Lessor with a loss certificate and shall do

 

 

 
either of the following within thirty (30) days after the Lessee  has actual knowledge of the occurrence of an Event of Loss:
 
(a)       In Lessor’s sole discretion, it shall direct Lessee at Lessee’s own expense to either (i) promptly repair the affected Unit to its original capacity and condition or  (ii) replace the affected Unit with a newer unit of identical make, model, configuration, capacity and condition, in good repair, free and clear of all Liens in which case any such replacement unit shall become the property of Lessor and for all purposes of this Master Lease shall be deemed to be the Unit which it replaced; or
 
(b)      Terminate the Schedule with respect to the affected Unit and pay to Lessor on the next payment date, an amount equal to the Casualty Value as set forth in Section 10(c); or
 
(c)      Cause any Permitted Sublessee of any such Unit to replace or repair such Unit in compliance with its obligations under its Permitted Sublease.
 
12.                 INSURANCE:
 
Lessee shall, at its expense, insure the Equipment against all risks and in such amounts as Lessor shall reasonably require (but not less than the greater of  (i) the Casualty Value or (ii) full replacement value with carriers reasonably acceptable to Lessor, shall maintain a loss payable endorsement in favor of Lessor and Assignee affording to Lessor and Assignee such additional protection as Lessor and Assignee shall reasonably require, and Lessee shall maintain liability insurance of no less than $1,000,000.00 per occurrence.  All such insurance policies shall name Lessee, Lessor and Assignee as additional insureds and loss payees, and shall provide that insurance coverage shall not be canceled without at least thirty (30) days’ prior written notice to Lessor and Assignee, and that no breach of warranty by Lessee shall invalidate such insurance with respect to any additional insured.  Lessee shall furnish appropriate evidence of such insurance to Lessor and Assignee. In the case Lessee fails to provide adequate insurance as described above, Lessor may obtain insurance on Lessee’s behalf, the cost of which will be immediately reimbursed to Lessor by Lessee.  Lessee shall be deemed to have complied with this Section 12 if the applicable Permitted Sublessee shall be in compliance with its comparable obligations to Lessee under its Permitted Sublease. Notwithstanding anything herein to the contrary, compliance by Lessee with the insurance requirements of the Exhibitor Agreements (as defined in the Senior Credit Agreement) shall constitute compliance with the insurance requirements under this Master Lease.
 
13.                 SURRENDER OF EQUIPMENT:
 
Upon the expiration or earlier termination of any Schedule with respect to any Unit, Lessee shall, unless Lessee has paid Lessor in cash the Casualty Value of the Unit plus any accrued Rent and any other payments due, at Lessee’s expense, deinstall, repackage and return the Equipment to Lessor to the Return Location, in the condition described in Section 8 hereof within ten (10) calendar days and failure to do so shall be deemed an Event of Loss as defined in Section 11.2.  Lessee shall arrange and pay for all such repairs and work required as to any Unit in order to comply with the requirements of Section 8 hereof.  Lessee shall bear the risk of damage or loss until delivery of the Equipment to the Return Location.
 
14.                 ASSIGNMENT BY LESSOR:
 
LESSOR MAY ASSIGN OR TRANSFER THIS MASTER LEASE OR ANY SCHEDULE HERETO OR LESSOR’S INTEREST IN THE EQUIPMENT OR GRANT A SECURITY INTEREST THEREIN TO ONE OR MORE ASSIGNEES AS PROVIDED IN THE MULTIPARTY AGREEMENT OR WITH THE PRIOR WRITTEN CONSENT OF LESSEE (UNLESS AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING), WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.  Unless otherwise agreed in writing, (a) any Assignee of Lessor shall have all of the rights, and none of the obligations, of Lessor that arise on or after the time the assignment becomes effective other than the obligation to permit quiet enjoyment of the Equipment pursuant to the terms of this Master Lease, (b) any Assignee of Lessor shall have none of the obligations of Lessor that arose prior to the time the assignment becomes effective, (c) no assignment shall relieve Lessor from any of its

 

 

 
obligations, and (d) Lessee agrees that it will not assert against any Assignee any defense, counterclaim or offset that Lessee may have against Lessor arising from the acts or omissions of Lessor before such assignment becomes effective, or arising from acts or omissions of Lessor after such assignment becomes effective other than, except in the  case of a collateral assignment by Lessor as security for its financing relating to the purchase of Equipment (and subsequent collateral assignments by its lender and any foreclosures or transfers in lieu of foreclosure in connection with any of the foregoing) for a breach by Lessor of the obligation to permit quiet enjoyment of the Equipment pursuant to the terms of this Master Lease.  Lessee shall have no greater obligations to any Assignee than it had to Lessor at the time of assignment, and such assignment shall not limit or otherwise restrict the rights afforded Lessee hereunder. Lessee hereby agrees to promptly execute and deliver, or use commercially reasonable efforts to cause the applicable Permitted Sublessee to execute and deliver, such further acknowledgments, agreements and other instruments as may be reasonably requested by Lessor or Assignee to effect such assignments and/or grants from time-to-time as each Schedule is executed.  Lessee acknowledges that any assignment or transfer by Lessor made in accordance with the provisions of this Section shall not change Lessee’s duties or obligations under this Master Lease or any Schedules nor increase the burdens or risks imposed on Lessee.  In the event of an assignment, all references herein to Lessor shall include Assignee.
 
15.                 ASSIGNMENT OR SUBLEASE BY LESSEE; PERMITTED SUBLEASES:
 
LESSEE SHALL NOT, EXCEPT AS PROVIDED IN THE MULTIPARTY AGREEMENT, ASSIGN OR IN ANY WAY DISPOSE OF ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER THIS MASTER LEASE OR ANY SCHEDULES OR ENTER INTO ANY SUBLEASE OF ALL OR ANY UNIT WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.
 
Notwithstanding the foregoing, Lessee may enter into subleases or licenses of its rights in the Equipment with Exhibitors (as defined in the Multiparty Agreement; hereunder, “Permitted Sublessees”)  pursuant to Exhibitor Agreements (hereunder, “Permitted Subleases”).
 
As to any assignment or sublease permitted hereunder, the following additional conditions shall apply:
 
(a)      Equipment shall not be relocated outside of the United States of America;
 
(b)      Lessee shall give to Lessor prior written notice of the location of the Equipment and the identity of the lessee thereof (“Subsequent Lessee”) thirty (30) days prior to installation of the Equipment at Subsequent Lessee’s location;
 
(c)      No sublease or assignment shall in any way discharge or diminish any of Lessee’s obligations to Lessor under the Master Lease or any Schedule thereto; and
 
(d)      Any sublease or assignment shall be expressly subject and subordinate to the terms and conditions of this Master Lease and the applicable Schedule, the terms and conditions thereof shall be subject to Lessor’s reasonable approval (Permitted Sublessees being deemed approved), and Lessee shall assign its rights thereunder to Lessor and Assignee as additional collateral and security for the performance of Lessee’s obligations hereunder.
 
16.                 RELOCATION:
 
Except as otherwise permitted under the Permitted Subleases, Lessee shall not move or permit to be moved any Equipment from the Equipment Location without the prior written consent of Lessor, which consent shall not be unreasonably withheld; provided, however, in no event shall any Equipment be moved to a location outside the United States of America.  Risk of loss and all costs and expenses incurred in connection with any movement of Equipment including any costs incurred by Lessor to preserve its security interest or title in the equipment, shall be the responsibility of Lessee.
 
17.                 ALTERATIONS AND MODIFICATIONS:

 

 

 
Except as otherwise permitted under the Permitted Subleases, Lessee shall not make modifications, alterations or additions to Equipment (other than normal operating accessories or controls) without the prior written consent of Lessor, which consent shall not be unreasonably withheld.  Notwithstanding the foregoing, Lessee shall be entitled to acquire and install, at Lessee’s expense, such additional features or options (“Modifications”) which (i) will not impair the originally intended function or use of the Equipment in which the Modifications are installed, (ii) will not require removal of any part of the Equipment, (iii) will not interfere with Lessee’s ability to obtain and maintain the maintenance contract required by Section 8.3, and (iv) the addition of which will not have an adverse impact upon the value of the underlying Equipment or Lessor’s rights therein.  Except as otherwise permitted under the Permitted Subleases, such Modifications shall be of the type which are readily installed and removed without damage to the Equipment so as to restore the Equipment to the condition in which it existed prior to the installation of such Modifications; provided, however, that if Lessor so agrees in writing, Lessee shall not be required to remove such Modifications.  Any Modifications not so removed shall become the property of Lessor.  All Modifications must be maintained in accordance with Section 8 hereof.
 
18.                 REPRESENTATIONS AND WARRANTIES OF LESSEE:
 
Lessee will provide as of the Effective Date: (i) an Incumbency Certificate or other document identifying the signatures and establishing the authority of the signers of the lease documents, and (ii) an opinion of counsel in form and substance reasonably satisfactory to Lessor.
 
Lessee represents and warrants for the benefit of Lessor and any Assignee, that as of the time of execution and delivery of this Master Lease and each Schedule:
 
(a)      Lessee (i) is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (ii) is in good standing in each jurisdiction where the Equipment will be located, except where the failure to be in good standing would not, in the aggregate, have a material adverse effect on the business or financial condition of Lessee or ability of Lessee to satisfy its obligations hereunder (a “Material Adverse Effect”), and (iii) has adequate limited liability company power to enter into and perform this Master Lease and each Schedule;
 
(b)      This Master Lease and each Schedule have been duly authorized, executed and delivered by Lessee and constitute a valid, legal and binding agreement of Lessee, enforceable in accordance with their terms, subject to enforcement limitations imposed by state or federal laws generally affecting the rights of creditors and general equitable principles;
 
(c)      Subject to Section 6.1 of this Master Lease, the execution and delivery of and the performance by Lessee of its obligations under this Master Lease and each Schedule will not violate any judgment, order, law or governmental regulation applicable to Lessee or any provision of Lessee’s articles of incorporation, by-laws or other organizational documents or result in any breach of or constitute a default under any instrument or agreement to which Lessee is a party or by which Lessee or its assets may be bound or result in the creation of any Lien, except as contemplated herein or as would not, in the aggregate, have a Material Adverse Effect;
 
(d)      There are no pending actions or proceedings to which Lessee is a party, and there are no other pending or threatened actions or proceedings of which Lessee has knowledge, before any court, arbitrator or administrative agency, which, either individually or in the aggregate, would have a Material Adverse Effect. Lessee is not in default under any obligation for borrowed money that would constitute an Event of Default hereunder;
 
(e)                 Under all applicable laws, the Equipment consists solely of personal property and not fixtures;
 
(f)      The financial statements of Lessee (copies of which have been furnished to Lessor) have been prepared in accordance with generally accepted accounting principles consistently applied (“GAAP”), and fairly present in all material respects Lessee’s financial condition and the results of its operations as of the date of and for the periods covered by such statements, and since the date of such statements

 
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there has been no material adverse change in such conditions or operations that would, in the aggregate, have a Material Adverse Effect; and
 
(g)                 Lessee is not a tax exempt entity under the Internal Revenue Code of 1986 as amended.
 
19.                 NOTICES:
 
Any notices required or other communications required or expressly authorized to be made by this Master Lease shall be transmitted by registered or certified mail or other form of expedited delivery which requires the signature or acknowledgment of the receiving party.  All such notices shall be issued to the addresses of the parties set forth above, or to such other address as a party may hereafter specify by written notice given in accordance with the requirements of this Section, and shall be deemed given on the earlier of the date received and five (5) business days after the date notice is issued.
 
20.                 SOFTWARE:
 
Lessee and Lessor acknowledge that the Equipment may contain or include a description of certain software (“Software”) in which Lessor and Lessee have no ownership or other proprietary rights.  Where required by the Software owner, manufacturer or distributor, Lessee shall enter into a license or other agreement for the use of such Software.  Any Software agreement shall be separate and distinct from this Master Lease and any Schedule, and Lessor and Assignee shall not have any obligations thereunder, but shall have the right to require Lessee to terminate Lessee’s use of the Software if an Event of Default shall occur and shall be continuing hereunder.  In the event Rent specified in a Schedule includes an amount attributable to the financing by Lessor of Lessee’s fee for use of Software, Lessee agrees that such amount shall be deemed Rent and subject to all the provisions of this Master Lease. In the event Lessor has advanced the cost of Software and Lessee has surrendered Equipment to Lessor as described in Section 13, Lessor at its option has the right to take assignment of Lessee’s rights under such software agreements  if loss of Software affects the fair market value of the Equipment.
 
21.                 LESSOR’S RIGHT TO CURE:
 
If Lessee fails to perform any obligations hereunder, then Lessor, in addition to all of its rights and remedies hereunder, may perform the same, but shall not be obligated to do so, at the cost and expense of Lessee.  In such event, Lessee shall promptly reimburse Lessor for any such costs and expenses incurred by Lessor together with interest thereon at the Late Payment Rate from the date incurred to the date reimbursement is made.  All payments and advances made by Lessor shall be deemed Rent.
 
22.                 INFORMATION:
 
Subject to the Supplemental Terms Rider, during the term of this Master Lease, Lessee covenants and agrees as follows:
 
(a)      Lessee shall provide Lessor prompt notice of the occurrence of any Event of Default or event which, with the passage of time or giving of notice, would be an Event of Default.
 
(b)      Lessee will promptly execute and deliver to Lessor such further documents, instruments and assurances and take such further action as Lessor from time to time may reasonably request in order to carry out the intent and purpose of this Lease and to establish and protect the rights and remedies created or intended to be created in favor of Lessor under the Lease.
 
23.                 APPOINTMENT OF COLLATERAL AGENT:
 
23.1                  Appointment and Duties of Collateral Agent .  (a)  Lessor, on behalf of itself and any Assignee of Lessor, and each Assignee of Lessor (by its acceptance of the benefits of this Master Lease) (collectively referred to in this Section 23, as "Lessor") hereby irrevocably appoints Société Générale, New York Branch ("SG") (together with any successor collateral agent pursuant to Section 23.9 below) as the collateral agent (the "Collateral Agent") hereunder and under the other CHG Lease

 
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Facility Documents (such term as used herein shall have the meaning ascribed to it in the Multiparty Agreement) and authorizes the Collateral Agent to (i) execute and deliver the CHG Lease Facility Documents to which it is a party and accept delivery thereof on its behalf from Lessee or any other grantor under the CHG Lease Security Documents (as defined in the Multiparty Agreement) (collectively, the "Grantors"), (ii) take such action on its behalf and exercise all rights, powers and remedies and perform the duties as are expressly delegated to the Collateral Agent under such CHG Lease Facility Documents, (iii) act as collateral agent for Lessor for purposes of the perfection of all Liens created by such agreements and all other purposes stated therein, (iv) manage, supervise and otherwise deal with the collateral securing this Master Lease (the "Collateral"), (v) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the CHG Lease Facility Documents, (vi) except as may be otherwise specified in any CHG Lease Facility Document (including the Multiparty Agreement), exercise all remedies given to the Collateral Agent and the Lessor with respect to the Collateral, whether under the CHG Lease Facility Documents, applicable law or otherwise (vii) execute any amendment, consent or waiver under the CHG Lease Facility Documents to which the Collateral Agent is a party on behalf of Lessor to the extent Lessor has consented in writing to such amendment, consent or waiver, and (viii) exercise such powers as are reasonably incidental thereto.
 
(b)       Limited Duties .  Under the CHG Lease Facility Documents, the Collateral Agent (i) is acting solely on behalf of the Lessor, with duties that are entirely administrative in nature, notwithstanding the use of the defined term "Collateral Agent" or the terms "agent" and "collateral agent" and similar terms in any CHG Lease Facility Document to refer to the Collateral Agent, which terms are used for title purposes only, (ii) is not assuming any obligation under any CHG Lease Facility Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for Lessor and (iii) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any CHG Lease Facility Document, and Lessor hereby waives and agrees not to assert any claim against the Collateral Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (i) through (iii) above.
 
23.2                  Binding Effect .  Lessor agrees that (i) any action taken by the Collateral Agent in accordance with the provisions of the CHG Lease Facility Documents, (ii) any action taken by the Collateral Agent in reliance upon the instructions of Lessor and (iii) the exercise by the Collateral Agent or the Lessor of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon Lessor.
 
23.3                  Use of Discretion .
 
(a)   No Action without Instructions .  The Collateral Agent shall not be required to exercise any discretion or take, or omit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit to take (i) under the CHG Lease Facility Documents or (ii) pursuant to instructions from the Lessor.
 
(b)       Right Not to Follow Certain Instructions .  Notwithstanding clause (a) above, the Collateral Agent shall not be required to take, or to omit to take, any action (i) unless, upon demand, the Collateral Agent receives an indemnification satisfactory to it from the Lessor against all liabilities that, by reason of such action or omission, may be imposed on, incurred by or asserted against the Collateral Agent or any Related Person thereof or (ii) that is, in the opinion of the Collateral Agent or its counsel, contrary to any CHG Lease Facility Document or applicable Requirement of Law.
 
23.4                  Delegation of Rights and Duties .  The Collateral Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform
 
any of its duties or any other action with respect to, any CHG Lease Facility Document by or through any trustee, co-agent, employee, attorney-in-fact and any other Person (including the Lessor).  Any such Person shall benefit from this Section 23 to the extent provided by the Collateral Agent.
 
23.5                  Reliance and Liability .  (a)  The Collateral Agent may, without incurring any liability hereunder, (i) consult with any of its affiliates, directors, officers, employees, agents, counsel, accountants or other advisors (each, a "Related Person") and, whether or not selected by it, any other

 
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advisors, accountants and other experts (including advisors to, and accountants and experts engaged by, Lessee) and (ii) rely and act upon any document and information (including those transmitted by electronic transmission) and any telephone message or conversation, in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties.
 
(b)      Neither the Collateral Agent nor any of its Related Persons shall be liable for any action taken or omitted to be taken by any of them under or in connection with any CHG Lease Facility Document, and Lessor and Lessee hereby waives and shall not assert (and Lessee shall cause each other Grantor to waive and agree not to assert) any right, claim or cause of action based thereon, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of the Collateral Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection with the duties expressly set forth herein.  Without limiting the foregoing, the Collateral Agent:
 
(i)      shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Lessor or for the actions or omissions of any of its Related Persons;
 
(ii)      shall not be responsible to Lessor the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any CHG Lease Facility Document;
 
(iii)      makes no warranty or representation, and shall not be responsible, to Lessor for any statement, document, information, representation or warranty made or furnished by or on behalf of any Related Person, any person acting under Section 23.4, Lessee or any other Grantor in connection with any CHG Lease Facility Document or any transaction contemplated therein or any other document or information with respect to any Grantor, whether or not transmitted or (except for documents expressly required under any CHG Lease Facility Document to be transmitted to Lessor) omitted to be transmitted by the Collateral Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by the Collateral Agent in connection with the CHG Lease Facility Documents; and
 
(iv)                 shall not have any duty to ascertain or to inquire as to the performance or observance of any provision of any CHG Lease Facility Document, whether any condition set forth in any CHG Lease Facility Document is satisfied or waived, as to the financial condition of any Grantor or as to the existence or continuation or possible occurrence or continuation of any default or Event of Default and shall not be deemed to have notice or knowledge of such occurrence or continuation unless it has received a notice clearly labeled "notice of default" from Lessor describing such default or Event of Default;
 
and, for each of the items set forth in clauses (i) through (iv) above, Lessor and Lessee each waives and agrees not to assert (and Lessee shall cause each other Grantor to waive and agree not to assert) any right, claim or cause of action it might have against the Collateral Agent based thereon.
 
23.6                  Collateral Agent Individually; Waiver of Conflicts; Removal of Collateral Agent .  (a)  The Collateral Agent and its affiliates may make loans and other extensions of credit to, acquire stock and stock equivalents of, engage in any kind of business with, Lessor, Lessee, any other Grantor or affiliate thereof as though it were not acting as the Collateral Agent and may receive separate fees and other payments therefor.  To the extent the Collateral Agent or any of its affiliates becomes a Assignee of Lessor hereunder, it shall have and may exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities, pursuant to Section 14 hereof, as any other Assignee and any similar terms shall, except where otherwise expressly provided in any CHG Lease Facility Document, include, without limitation, the Collateral Agent or its affiliate, as the case may be, in its individual capacity as Assignee.
 
(b)      Lessor waives any and all conflicts of interest SG may have in its capacity as Collateral Agent.  Lessor acknowledges and consents to SG serving in other capacities in related transactions and hereby waives any conflicts related thereto.

 
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(c)      Lessor may remove the Collateral Agent at any time by delivering notice of such removal to the Collateral Agent and Lessee, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date that is 30 days after such notice is given.  Upon removal, the removed Collateral Agent shall be discharged from its duties and obligations under the CHG Lease Facility Documents, and the Lessor shall assume and perform all of the rights and duties of the Collateral Agent until a successor Collateral Agent shall have accepted a valid appointment hereunder (which successor Collateral Agent shall be subject to the prior written consent of Lessee, which may not be unreasonably withheld but shall not be required during the continuance of a default or Event of Default); provided that subject to its rights under Section 23.3, the removed Collateral Agent shall take such action as may be reasonably necessary to assign to the Lessor or any successor Collateral Agent its rights and Liens as Collateral Agent under the CHG Lease Facility Documents.
 
23.7                  Lessor Credit Decision .  Lessor acknowledges that it shall, independently and without reliance upon the Collateral Agent or any of its Related Persons or upon any document solely or in part because such document was transmitted by the Collateral Agent or any of its Related Persons, conduct its own independent investigation of the financial condition and affairs of Lessee and each Grantor and make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under, any CHG Lease Facility Document or with respect to any transaction contemplated in any CHG Lease Facility Document, in each case based on such documents and information as it shall deem appropriate.  Except for documents expressly required by any CHG Lease Facility Document to be transmitted by the Collateral Agent to the Lessor, the Collateral Agent shall have no duty or responsibility to provide Lessor with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of Lessee or any Grantor or any affiliate of any Grantor that may come in to the possession of the Collateral Agent or any of its Related Persons.
 
23.8                  Expenses; Indemnities .  (a)  Lessor agrees to reimburse the Collateral Agent and each of its respective Related Persons (to the extent not reimbursed by Lessee or any Grantor) promptly upon demand for any costs and expenses (including fees, charges and disbursements of financial, legal and other advisors and taxes paid in the name of, or on behalf of, any Grantor) that may be incurred by the Collateral Agent or any of its Related Persons in connection with the preparation, execution, delivery, administration, modification, consent, waiver or enforcement (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding or otherwise) of, or legal advice in respect of its rights or responsibilities under, any CHG Lease Facility Document.
 
(b)      Lessor further agrees to indemnify the Collateral Agent and each of its Related Persons (to the extent not reimbursed by any Grantor), from and against all claims, judgments, damages, losses, liabilities, obligations, fines, penalties, sanctions, costs, fees, taxes, commissions, charges, disbursement and expenses (including legal fees), in each case, of any kind or nature (collectively, the "Liabilities") (including taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made to on or for the account of Lessor) that may be imposed on, incurred by or asserted against the Collateral Agent or any of its Related Persons in any matter relating to or arising out of, in connection with or as a result of any CHG Lease Facility Document or any other act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any action taken or omitted to be taken by the Collateral Agent or any of its Related Persons under or with respect to any of the foregoing; provided, however, that Lessor shall not be liable to the Collateral Agent or any of its Related Persons to the extent such liability has resulted primarily from the gross negligence or willful misconduct of the Collateral Agent or, as the case may be, such Related Person, as determined by a court of competent jurisdiction in a final non-appealable judgment or order.
 
23.9                  Resignation of Collateral Agent .  (a)  The Collateral Agent may resign at any time by delivering not less than 15 days prior notice of such resignation to the Lessor and the Lessee, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date that is 30 days after such notice is given.  If the Collateral Agent delivers any such notice, the Lessor shall have the right to appoint a successor Collateral Agent.  Each appointment under this clause (a) shall be subject to the prior written consent of Lessee, which may not be unreasonably withheld but shall not be required during the continuance of a default or Event of Default.

 
14 

 

 
(b)      Effective immediately upon its resignation and the assignment of Liens in favor of the successor Collateral Agent or otherwise for the benefit of the Lessor, (i) the retiring Collateral Agent shall be discharged from its duties and obligations under the CHG Lease Facility Documents, (ii) Lessor shall assume and perform all of the rights and duties of the Collateral Agent until a successor Collateral Agent shall have accepted a valid appointment hereunder, (iii) the retiring Collateral Agent and its Related Persons shall no longer have the benefit of any provision of any CHG Lease Facility Document other than with respect to any actions taken or omitted to be taken while such retiring Collateral Agent was, or because such Collateral Agent had been, validly acting as Collateral Agent under the CHG Lease Facility Documents and (iv) subject to its rights under Section 23.3, the retiring Collateral Agent shall take such action as may be reasonably necessary to assign to the successor Collateral Agent its rights and Liens as Collateral Agent under the CHG Lease Facility Documents.  Effective immediately upon its acceptance of a valid appointment as Collateral Agent and the assignment of Liens from the retiring Collateral Agent, a successor Collateral Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Collateral Agent under the CHG Lease Facility Documents.
 
23.10                  Deemed Instructions .  Notwithstanding anything to the contrary herein or in the CHG Lease Security Documents (as defined in the Multiparty Agreement), any instructions relating to the Collateral provided to the Senior Collateral Agent (as defined in the Multiparty Agreement) by the Senior Creditors (as defined in the Multiparty Agreement) in accordance with the Multiparty Agreement in connection with the exercise of their rights and remedies under the Senior Credit Documents (as defined in the Multiparty Agreement) is deemed to be an instruction by the Lessor to the Collateral Agent with respect to the Collateral.
 
24.                 COUNTERPARTS; FINANCING STATEMENTS; POWER OF ATTORNEY:
 
24.1                  No executed original of this Master Lease or any Schedule shall be deemed to be an “original” for the purposes of perfection of a security interest therein under the Uniform Commercial Code in effect in any applicable jurisdiction, and no security interest may be created or perfected by possession or transfer of any original or counterpart of this Master Lease or Schedule.  Lessee acknowledges that Lessor has or will assign and grant a security interest in this Master Lease and each Schedule to Borrower as provided in the Multiparty Agreement.
 
24.2 Lessee agrees to execute, deliver and file any and all instruments reasonably requested by Lessor to perfect the interest of Lessor, its successors or assigns in this Master Lease, any Schedule, the payments due hereunder or the Equipment.  Lessee authorizes Lessor, at Lessee’s expense, to file a copy of this Master Lease or any Schedule as a financing statement.
 
24.3 Lessee hereby appoints Lessor as its agent and attorney-in-fact to execute, deliver, file and record (a) any and all Uniform Commercial Code Financing Statements and Statements of Amendment as are reasonably deemed necessary or desirable by Lessor or any Assignee, regardless whether for precautionary filing purposes, to indicate the interest of Lessor or any Assignee in this Schedule, the Equipment and any proceeds thereof, and (b) any documents or instruments respecting realization on insurance or any other proceeds of the Equipment.
 
25.                 ATTORNEY’S FEES:
 
In the event of any action at law or in equity in relation to this Master Lease or any Schedule, the prevailing party shall be entitled to recover its reasonable out-of-pocket attorney’s fees and costs.
 
26.                 SURVIVAL OF REPRESENTATIONS, WARRANTIES, INDEMNITIES AND COVENANTS:
 
All representations, warranties, indemnities and covenants of Lessee contained in this Master Lease or any other document or certificate delivered pursuant hereto or thereto shall continue in full force and effect and shall survive notwithstanding the expiration or earlier termination of this Master Lease in any manner whatsoever.

 
15 

 

 
27.                 EFFECT OF WAIVER:
 
The failure or delay of Lessor in exercising any rights granted hereunder shall not constitute a waiver of any such right and any single or partial exercise of any particular right by Lessor shall not exhaust the same or constitute a waiver of any other right provided herein.
 
28.                 GOVERNING LAW:
 
This Master Lease and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.
 
29.                 JURISDICTION:
 
29.1                 Submission to Jurisdiction.  Any legal action or proceeding with respect to this Master Lease may be brought in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States for the Southern District of New York and, by execution and delivery of this Master Lease, each party hereto hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.
 
29.2                 Service of Process.  Each party hereto hereby irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States with respect to or otherwise arising out of or in connection with this Master Lease by any means permitted by applicable law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of each party hereto specified in the first paragraph hereof (and shall be effective when such mailing shall be effective, as provided therein).  Each party 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.
 
29.3                 Non-Exclusive Jurisdiction.  Nothing contained in this Section 29.3 shall affect the right of any party hereto to serve process in any other manner permitted by applicable law or the right of any party hereto to commence legal proceedings or otherwise proceed against any party hereto, or any of the Equipment in any other jurisdiction.
 
29.4                  WAIVER OF JURY TRIAL .  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS MASTER LEASE OR THE TRANSACTIONS CONTEMPLATED HEREIN OR RELATED HERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS MASTER LEASE BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS   SECTION 29.4 .

 
16 

 

 
30.                 HEADINGS:
 
Section headings are inserted for convenience only and shall not affect any interpretation of this Master Lease.
 
31.                 ENTIRE AGREEMENT; SUPPLEMENTAL TERMS RIDER; MULTIPARTY AGREEMENT; MODIFICATION; BINDING EFFECT:
 
(a)      There are no agreements or understandings, oral or written, between Lessor and Lessee with respect to the Equipment, other than as set forth herein and in the Supplemental Terms Rider hereto, the Multiparty Agreement and the documents referred to therein, the agreements referenced in the Multiparty Agreement and each Schedule, and this Master Lease supersedes any commitment letter, proposal letter, or other writing or agreement previously issued or entered into by Lessor with respect to Lessee and the Equipment.  This Master Lease, each Schedule, the Multiparty Agreement and the documents referred to therein contain the entire agreement between Lessee and Lessor with respect to the subject matter hereof; provided that in the event of a conflict between the terms of this Master Lease or any Schedule, on the one hand, and those of the Multiparty Agreement, on the other hand, the terms of the Multiparty Agreement shall govern. As to any contradiction between the terms of this Master Lease, on the one hand, and the terms of the Supplemental Terms Rider, on the other hand, the terms of the Supplemental Terms Rider shall control. Neither the Master Lease nor any Schedule may be altered, modified, terminated or discharged except by a writing signed by the party against whom enforcement of such alteration, modification, termination or discharge is sought.  This Master Lease and each Schedule shall be binding upon and shall inure to the benefit of Lessor, Lessee and their respective successors and assigns.
 
(b) Any provision of this Master Lease being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Master Lease or any part of such provision in any other jurisdiction.
 
(c) The representations, warranties and covenants of Lessee herein shall be deemed to be continuing and to survive the execution and delivery of this Master Lease and each Schedule. Each execution by Lessee of a Schedule shall be deemed a reaffirmation that (i) the representations and warranties of Lessee set forth herein are true and correct in all material respects on and as of such date, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties were true and correct as of such specified earlier date and (ii) no Event of Default has occurred and is continuing. With respect to each Schedule, the obligations of Lessee under this Master Lease (as incorporated therein) which have accrued but not been fully satisfied, performed or complied with prior to the cancellation or termination of such Schedule, shall survive the cancellation or termination thereof to the extent necessary for the full and complete performance of such obligations.

 
32.   MULTIPARTY AGREEMENT .  Notwithstanding anything in this Master Lease to the contrary, the terms of this Master Lease and any Schedule hereto are subject and subordinate in all respects to the terms of the Multiparty Agreement.  Without limiting the foregoing, any payment that is not made as of when due under this Master Lease as a result of the operation of the Multiparty Agreement will be deemed not to be a default hereunder.
 
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17 

 

 

LESSOR:  CHG-MERIDIAN U.S. FINANCE, LTD.
 
LESSEE:  CDF2 HOLDINGS, LLC
 
By:
/s/ John P. Sandoval
 
By:
/s/ Gary S. Loffredo
         
Name:
John P. Sandoval
 
Name:
Gary S. Loffredo
         
Title:
Executive Vice President
 
Title:
President
         
Date:
10/18/11
 
Date:
10/18/11
 

 


 
S-1
Master Equipment Lease No. 8465 

 


 
Exhibit A
Equipment Lease Schedule

[To be attached]




 
Exhibit A 

 

Exhibit B

ACCEPTANCE CERTIFICATE NO. _____ OF ____________
FOR EQUIPMENT LEASE SCHEDULE NO._____
TO MASTER EQUIPMENT LEASE NO. __________ DATED AS OF ___________, ____
BETWEEN CHG-MERIDIAN U.S. FINANCE, LTD. (“LESSOR”)
AND CDF2 HOLDINGS, LLC (“LESSEE”)
 

 
PERMITTED SUBLESSEE:
 
_____________________________
_____________________________
_____________________________

 
Pursuant to the above referenced Schedule and Master Lease, Lessee hereby certifies that the Units of Equipment described in the Schedule and below have been delivered and installed at the location of Lessee or Permitted Sublessee described herein, have been inspected by authorized representatives of Lessee, have been found to be in good repair, condition and working order and are accepted by Lessee as Equipment under the Schedule on the Installation Date(s) set forth below.  On or as of the date set forth below as the Date of Installation/Acceptance, the applicable Permitted Sublessee (i) has executed and delivered a Certificate of Acceptance under its Permitted Sublease, which Permitted Sublessee Certificate of Acceptance is attached hereto or (ii) has been deemed to have accepted such Units pursuant to the terms of the applicable Permitted Sublease; provided that, if later, the Date of Installation/Acceptance shall be the date of purchase of the Equipment by Lessor, as buyer, from Lessee, as seller, under the applicable Sale and Leaseback Agreement.
 

Screen Number
Projector Type
Projector Serial Number
Server Type
Server Serial Number
Location – Theater Name and Address
Installation Date
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             


 
Exhibit B

 


             
             
             
             
             
 
 
 
 
 

LESSEE:  CDF2 HOLDINGS, LLC
 
BY:
 
   
NAME:
 
   
TITLE:
 
   
DATE:
 

 
 
 


 
Exhibit B

 

SUPPLEMENTAL TERMS RIDER
TO MASTER EQUIPMENT LEASE NO. 8465
 
This Supplemental Terms Rider (“Rider”) amends and is incorporated into that certain Master Equipment Lease No. 8465 dated as of October 18, 2011 (the “Lease”) between CHG-MERIDIAN U.S. FINANCE, LTD (“Lessor’) and CDF2 HOLDINGS, LLC, a Delaware limited liability company (“Lessee”).
 
In addition to the terms and conditions set forth the Lease and the Schedules thereto, the following terms shall be deemed included in and a part of the Lease.  As to any contradiction between the terms of this Rider and those of the Lease or any schedule thereto, the terms of this Rider shall control.
 
1.           All payments of Rent, Impositions and other amounts payable pursuant to the terms of the Lease shall be payable as provided in the Multiparty Agreement, including without limitation the provisions of Sections 4.4 and 4.5 thereof.
 
2.           Lessor hereby directs Lessee, effective, so long as any CDF2 Loan Obligations (as defined in the Multiparty Agreement) are outstanding, to make payment of all Rent to Cinedigm Digital Funding 2, LLC, for application against the CDF2 Loan Obligations pursuant to the Multiparty Agreement and the CDF2 Loan Documents (as defined in the Multiparty Agreement).  Upon payment in full of the CDF2 Loan Obligations, Lessee shall make payment of all Rent hereunder to Lessor, subject to the terms of the Multiparty Agreement.
 
3.             As a condition precedent to any funding by Lessor under the Lease with respect to the acquisition of any Equipment, Lessor shall have received evidence reasonably satisfactory to it that all conditions to funding of the associated Senior Obligations (as defined in the Multiparty Agreement) sufficient for the acquisition of such Equipment have been or will concurrently be satisfied (or duly waived), including without limitation the release of liens required under clause (u) of Schedule 3.2 to the Senior Credit Agreement (as defined in the Multiparty Agreement) and the acceptance of the terms and conditions by Lessor and the Senior Administrative Agent (as defined in the Multiparty Agreement) of the applicable Exhibitor Approval Schedule (as defined in the Senior Credit Agreement).
 
4.           Lessee hereby acknowledges and agrees that the exercise by any Permitted Sublessee of its right to purchase any of the Equipment pursuant to its Permitted Sublease may be effected only if and to the extent Lessee is permitted to exercise at such time its purchase option under the Lease as to such Equipment and only if Lessee does exercise such purchase option in compliance with the terms of the Lease.
 
5.           One or more of the following events listed on Annex I hereto shall constitute a "Senior Credit Agreement Tier 1 Event of Default".  Lessee and Lessor agree that any Senior Credit Agreement Tier 1 Event of Default shall be an Event of Default.
 
6.            One or more of the following events listed on Annex II hereto shall constitute a "Senior Credit Agreement Tier 2 Event of Default". Lessee and Lessor agree that any Senior Credit Agreement Tier 2 Event of Default shall be an Event of Default.
 

 

 

7.             One or more of the following events listed on Annex III hereto shall constitute a "Senior Credit Agreement Tier 3 Event of Default". Lessee and Lessor agree that any Senior Credit Agreement Tier 3 Event of Default that remains unremedied for 30 days after the occurrence thereof shall be an Event of Default.
 
8.           Lessee and Lessor agree that it shall be an Event of Default if Section 7.9 (Use of Proceeds), or any comparable provision, of the Senior Credit Agreement shall be amended to permit the use of Senior Loans for any purpose other than the acquisition of Equipment and purposes incidental thereto as contemplated by the Senior Credit Agreement as in effect on the date hereof..
 
9.           Lessee and Lessor agree that it shall be an Event of Default if Section 7.12 (Required Hedging), or any comparable provision or defined terms relevant thereto, of the Senior Credit Agreement shall be amended without the consent of Lessor.
 
10.           Lessee shall pay to Lessor the Lease Administration Fee as provided in the Multiparty Agreement.
 

 

 
[ Remainder of page left intentionally blank ]
 

 

 

Lessee and Lessor have caused this Rider to be executed as of the date of the Lease.
 
 

CHG-MERIDIAN U.S. FINANCE, LTD.
Lessor
 
CDF2 HOLDINGS, LLC
Lessee
 
By:
/s/ John P. Sandoval
 
By:
/s/ Gary S. Loffredo
Name:
John P. Sandoval
 
Name:
Gary S. Loffredo
Title:
Executive Vice President
 
Title:
President

 

 

S-1
Supplemental Terms Rider to Master Lease

 
 

 

ANNEX I

Senior Credit Agreement Tier 1 Events of Default

For purposes of this Annex I, "Senior Credit Agreement Event of Default" means any "Event of Default" as defined in the Senior Credit Agreement.  One or more of the following events shall constitute a "Senior Credit Agreement Tier 1 Event of Default":

(a)           a Senior Credit Agreement Event of Default described in Section 9.1(a) of the Senior Credit Agreement; or
 
(b)           a Senior Credit Agreement Event of Default described in Section 9.1(e) of the Senior Credit Agreement; or
 
(c)           a Senior Credit Agreement Event of Default described in Section 9.1(g)(i) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from the failure of any material provision of the Multiparty Agreement to be valid and binding on, or enforceable against any party thereto) of the Senior Credit Agreement; or
 
(d)           a Senior Credit Agreement Event of Default described in Section 9.1(o) of the Senior Credit Agreement; or
 
(e)           a breach by the Lessor of Section 8.2 or Section 8.3 of the Multiparty Agreement.
 

 

Annex I

 
 

 

ANNEX II

Senior Credit Agreement Tier 2 Events of Default

For purposes of this Annex II, (i) "Senior Credit Agreement Event of Default" means any "Event of Default" as defined in the Senior Credit Agreement, (ii) "Senior Loan Party" means any "Loan Party" as defined in the Senior Credit Agreement, (iii) "Senior Group Member" means any "Group Member" as defined in the Senior Credit Agreement, and (iv) "CDF2 Loan Agreement" has the meaning set forth in the Multiparty Agreement.  One or more of the following events shall constitute a "Senior Credit Agreement Tier 2 Event of Default":

(a)           a Senior Credit Agreement Event of Default described in Section 9.1(b) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from a representation, warranty or certification made or deemed made under Section 4.5 or Section 4.6 of the Senior Credit Agreement proving to have been incorrect in any material respect (without duplication of any materiality qualifier contained therein) when made or deemed made); or
 
(b)           a Senior Credit Agreement Event of Default described in Section 9.1(c) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from the failure of any Senior Loan Party to comply with Section 5.2 , Section 5.3 , Section 5.4 , Section 7.5 , Section 7.11 , Section 8.1 or Section 8.2 of the Senior Credit Agreement); or
 
(c)           a Senior Credit Agreement Event of Default described in Section 9.1(f) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from money judgments, orders and decrees that (i) involve an aggregate amount (excluding amounts adequately covered by insurance payable to a Senior Group Member, to the extent the relevant insurer has not denied coverage therefor) in excess of $5,000,000 or (ii) would reasonably be expected to have, in the aggregate, a Material Adverse Effect (as defined in the Senior Credit Agreement); or
 
(d)           a Senior Credit Agreement Event of Default described in Section 9.1(g)(i) or Section 9.1(g)(ii) of the Senior Credit Agreement (other than any such Senior Credit Agreement Event of Default that constitutes a Senior Credit Agreement Tier 1 Event of Default); or
 
(e)           a Senior Credit Agreement Event of Default described in Section 9.1(h) of the Senior Credit Agreement; or
 
(f)           a Senior Credit Agreement Event of Default described in Section 9.1(i) thereof (but only in so far as such Senior Credit Agreement Event of Default results in or from the failure of a Distributor (as defined in the Senior Credit Agreement) party to a Material Digital Cinema Deployment Agreement (as defined in the CDF2 Loan Agreement) to pay, when the same becomes due and payable, amounts owing under such Material Digital Cinema Deployment Agreement; or
 
(g)           a Senior Credit Agreement Event of Default described in Section 9.1(j) thereof (but only in so far as such Senior Credit Agreement Event of Default results in or from the
 

Annex II

 
 

 

failure of an Exhibitor (as defined in the Senior Credit Agreement) party to a Material Exhibitor Agreement (as defined in the CDF2 Loan Agreement) to pay, when the same becomes due and payable, amounts owing under such Material Exhibitor Agreement); or
 
(h)           a Senior Credit Agreement Event of Default described in Section 9.1(r) of the Senior Credit Agreement; or
 
(i)           a breach of Section 8.2 or Section 8.3 of the Multiparty Agreement (other that any such breach that constitutes a Senior Credit Agreement Tier 1 Event of Default).
 

 

 

Annex II

 
 

 

ANNEX III
 
Senior Credit Agreement Tier 3 Events of Default

For purposes of this Annex III, (i) "Senior Credit Agreement Event of Default" means any "Event of Default" as defined in the Senior Credit Agreement and (ii) "Senior Loan Party" means any "Loan Party" as defined in the Senior Credit Agreement.  One or more of the following events shall constitute a "Senior Credit Agreement Tier 3 Event of Default":

(a)           a Senior Credit Agreement Event of Default described in Section 9.1(b) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from a representation, warranty or certification made or deemed made under Section 4.1(a) , Section 4.1(d) , Section 4.1(e) , Section 4.2 , Section 4.4 , Section 4.9 , Section 4.11 , Section 4.15 , Section 4.22 , Section 4.23 , Section 4.24 or Section 4.25 of the Senior Credit Agreement proving to have been incorrect in any material respect (without duplication of any materiality qualifier contained therein) when made or deemed made); or
 
(b)           a Senior Credit Agreement Event of Default described in Section 9.1(c) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from the failure of any Senior Loan Party to comply with any of the following covenants in the Senior Credit Agreement: Section 5.1 , Section 6.1(a) , Section 6.1(b) , Section 6.1(c) , Section 6.1(d) , Section 6.1(i) , Section 6.1(j) , Section 7.1 , Section 7.2 , Section 7.9 , Section 7.10 , Section 7.12 through 7.16 , Section 7.18 , Section 7.19 , Sections 8.3 through 8.11 , Section 8.13 or Section 8.16 ; or
 
(c)           a Senior Credit Agreement Event of Default described in Section 9.1(d) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default relates to Indebtedness having a principal amount of $1,000,000 or more); or
 
(d)           a Senior Credit Agreement Event of Default described in Section 9.1(f) of the Senior Credit Agreement (but only in so far as such Senior Credit Agreement Event of Default results from money judgments, orders and decrees that involve an aggregate amount of $1,000,000 - $5,000,000 (excluding amounts adequately covered by insurance payable to a Senior Group Member, to the extent the relevant insurer has not denied coverage therefor); or
 
(e)           a Senior Credit Agreement Event of Default described in Section 9.1(i) thereof (other than any such Senior Credit Agreement Event of Default that constitutes a Senior Credit Agreement Tier 2 Event of Default); or
 
(f)           a Senior Credit Agreement Event of Default described in Section 9.1(j) thereof (other than any such Senior Credit Agreement Event of Default that constitutes a Senior Credit Agreement Tier 2 Event of Default); or
 
(g)           a Senior Credit Agreement Event of Default described in Section 9.1(k) of the Senior Credit Agreement; or
 

Supplemental Terms Rider to Master Equipment Lease No.8465
 

 
 
 

 

(h)           a Senior Credit Agreement Event of Default described in Section 9.1(l) of the Senior Credit Agreement; or
 
(i)           a Senior Credit Agreement Event of Default described in Section 9.1(p) of the Senior Credit Agreement; or
 
(j)           a Senior Credit Agreement Event of Default described in Section 9.1(t) of the Senior Credit Agreement.
 

 

 

 

Supplemental Terms Rider to Master Equipment Lease No.8465
 

 
 
 

 

 
 

 
EXHIBIT 10.5
 
EXECUTION VERSION

Agreement Number:________
CHG LOGO
CHG-MERIDIAN
U.S. Finance, Ltd.

SALE AND LEASEBACK AGREEMENT

This Sale and Leaseback Agreement is entered into on October 18, 2011 by and between CDF2 Holdings, LLC, a Delaware limited liability company ("Seller"), and CHG-MERIDIAN U.S. Finance, Ltd., a California corporation ("Buyer").

WHEREAS, Buyer is purchasing from Seller the equipment listed in Exhibit A attached hereto and made a part hereof (the "Equipment"); and

WHEREAS, Seller desires to use the Equipment under the terms and conditions of Master Equipment Lease Agreement Number 8463 (the "Master Lease") between the parties, dated as of October 18, 2011, as it relates to Equipment Lease Schedule Number 001 (the "Equipment Schedule") thereto (the Master Lease and the Equipment Schedules are referred to collectively as the "Lease"); and

WHEREAS, Seller, Buyer and the other parties thereto have entered into the Multiparty Agreement, dated as of October 18, 2011 (the “Multiparty Agreement”) with respect to the Lease and the Equipment.

NOW THEREFORE, it is agreed as follows:

1.   On or before the date hereof, Seller has purchased and acquired the Equipment from the manufacturers or vendors (the "Vendors") described on Exhibit A.  Seller agrees to sell and convey to Buyer and Buyer agrees to purchase from Seller the Equipment.  Subject to the terms and conditions of the Lease, Buyer, as Lessor, agrees to lease and Seller, as Lessee, agrees to lease from Lessor the Equipment.

2.   The aggregate purchase price payable by Buyer for the Equipment is the amount  set forth on Exhibit A or as provided in the Systems Financing Notice delivered in connection herewith, and on or before the date hereof, Seller has acquired the Equipment from the Vendors for such amount; provided, however , that the Buyer may retain an amount equal to $1400 per unit of Equipment to be held as a Prepaid Reserve pursuant to the Master Lease.

3.   On or after the date hereof, Seller shall deliver to Buyer copies of the Vendor invoice(s) marked paid or other evidence reasonably satisfactory to Buyer of payment of the Vendors for the Equipment, a Bill of Sale and invoice(s) from Seller to Buyer with respect to the Equipment, an Acceptance Certificate, and a release of any liens held by the Vendor on the Equipment as required under the Lease.  Buyer will, upon receipt of such documents from Seller and upon satisfaction of all conditions precedent under the Lease applicable to the Equipment, remit to Seller the Purchase Price for the Equipment
 
 
 
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by deposit thereof into the Equipment Purchase Account or Holdings Operating Account, as applicable, pursuant to (and as defined in) the Multiparty Agreement.

4.   Seller hereby represents and warrants to Buyer that the Equipment is in good order and repair, and that except for any claims, liens, or security interests on or relating to the Equipment created or granted by Seller and permitted or contemplated under the Multiparty Agreement and the documents referenced therein to survive Buyer's payment in full of the Purchase Price, there are no such claims, liens or security interests.

5.   The warranties, representations, and agreements herein contained shall survive the passage of title to the Equipment from Seller to Buyer.

6.   Subject to the terms and conditions of the Lease and the Multiparty Agreement, Seller shall pay all applicable taxes or other government charges levied upon or arising from this sale of the Equipment, including sales, use, gross receipts or occupation taxes due upon the purchase by Buyer; provided that Seller shall have no liability for taxes which are based solely upon or measured by the gross or net income of Buyer.

7.   To induce Buyer to enter into this Sale and Leaseback Agreement, Seller represents and warrants to Buyer that: (i) it has the authority to enter into this Sale and Leaseback Agreement; (ii) the person who has executed this Sale and Leaseback Agreement and who shall execute the Bill of Sale has the authority to bind Seller; (iii) the Lease, the sale of the Equipment by Seller to Buyer, and the execution of this Sale and Leaseback Agreement will not violate any material agreement to which Seller is a party or any applicable law or any organizational document of Seller; (iv) this Sale and Leaseback Agreement and the Bill of Sale, when executed and delivered to Buyer, will be a duly-authorized, valid and binding agreement of Seller enforceable against Seller in accordance with the respective terms thereof, and (v) that Seller has and is transferring to Buyer title to the Equipment free and clear of all liens, claims and encumbrances, except as set forth in Schedule A , if any, attached hereto.

8.   Seller hereby assigns to Buyer all of its right, title and interest in and to the Supply Agreements (as defined in the Multiparty Agreement) to the extent such agreements relate to any Equipment hereunder, and rights and warranties thereunder applicable to such Equipment, and Seller warrants that all warranties are assignable to Buyer and are enforceable by Buyer directly and by Seller as Lessee under the Lease, and that this assignment will enable Buyer to comply with its warranties as Lessor under the Lease.

9.   This Sale and Leaseback Agreement and all documents referred to herein shall inure to the benefit of and shall be binding upon Seller and Buyer, and their respective successors and assigns.  This Sale and Leaseback Agreement cannot be assigned, delegated or otherwise transferred in any manner without the prior express written consent of the other party, or as provided in the Multiparty Agreement.  Any transfer in contravention of the preceding sentence shall be null and void.

 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Sale and Leaseback Agreement to be signed by their respective duly-authorized representatives.

CDF2 HOLDINGS, LLC
(SELLER)
 
 
CHG-MERIDIAN U.S. FINANCE, LTD.
(BUYER)
BY:
  /s/ Gary S. Loffredo  
BY:
  /s/ John P. Sandoval
         
NAME:
  Gary S. Loffredo  
NAME:
  John P. Sandoval
         
TITLE:
  President  
TITLE:
  Executive Vice President
         
DATE:
  10/18/11  
DATE:
  10/18/11

 
 
 
 
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EXHIBIT 10.6
 
EXECUTION VERSION
 
SALE AND CONTRIBUTION AGREEMENT
 

 

 

 
among
 

 

 
CINEDIGM DIGITAL CINEMA, CORP., Cinedigm
 
ACCESS DIGITAL CINEMA PHASE 2, CORP., Parent
 

 
 
 
 
CDF2 HOLDINGS, LLC, as Seller
 
and
 
CINEDIGM DIGITAL FUNDING 2, LLC, as Purchaser
 
 
 
 

 

 

 

 

 

 
Dated as of  October 18, 2011
 
 
 
 

 
 
 

 
 
Table of Contents
 
Page
 
 
ARTICLE I
 
Definitions
 
Section 1.01.
Definitions
Section 1.02.
Other Definitional Provisions
 
 
ARTICLE II
 
Contribution and Sale of Transferred Assets
 
Section 2.01.
Contribution and Sale of Transferred Assets
Section 2.02.
Sale Consideration
 
ARTICLE III
 
Conditions Precedent
 
Section 3.01.
Conditions Precedent to the Purchaser’s Acquisition of Transferred Assets on the Initial Transfer Date
Section 3.02.
Conditions Precedent to the Seller’s Obligation to Accept the Cinedigm Contribution and the Parent Contribution, Make the Seller Contribution and Sell the Transferred Assets
Section 3.03.
Conditions Precedent to the Parent’s Obligation to Make the Parent Contribution
Section 3.04.
Conditions Precedent to Purchaser’s Acquisition of Assets Subsequent to the Initial Transfer Date
Section 3.05.
Conditions Precedent to the Seller’s Acceptance of Capital Contributions from the Parent or Sale of Assets to the Purchaser Subsequent to the Initial Transfer Date
Section 3.06.
Conditions Precedent to the Parent’s Contribution of Assets Subsequent to the Initial Transfer Date
 
ARTICLE IV
 
Representations and Warranties of the Seller
 
Section 4.01.
Organization and Good Standing
   9
Section 4.02.
Due Qualification
Section 4.03.
Power and Authority
Section 4.04.
Binding Obligation
Section 4.05.
No Violation
Section 4.06.
No Proceedings
 
 
 
 
i

 
 
 
Section 4.07.
Approvals
Section 4.08.
Financial Condition
Section 4.09.
No Fraudulent Transfer
Section 4.10.
The Transferred Assets
Section 4.11.
True and Complete Disclosure
 
ARTICLE V
 
Representations and Warranties of the Purchaser
 
Section 5.01.
Organization and Good Standing
Section 5.02.
Due Qualification
Section 5.03.
Power and Authority
Section 5.04.
Binding Obligation
Section 5.05.
Certain Liabilities
 
ARTICLE VI
 
Representations and Warranties of Cinedigm and the Parent
 
Section 6.01.
Organization and Good Standing
Section 6.02.
Due Qualification
Section 6.03.
Power and Authority
Section 6.04.
Binding Obligation
Section 6.05.
No Violation
Section 6.06.
No Proceedings
Section 6.07.
Approvals
Section 6.08.
No Fraudulent Transfer
Section 6.09.
The Transferred Assets
Section 6.10.
True and Complete Disclosure
 
ARTICLE VII
 
Covenants of the Seller, Cinedigm and the Parent
 
Section 7.01.
Notices
Section 7.02.
Compliance with Law
Section 7.03.
Accounting
Section 7.04.
Collections Received after the Initial Transfer Date
 
 
 
ii

 
 
ARTICLE VIII
 
Seller Indemnities
 
 
ARTICLE IX
 
Miscellaneous Provisions
 
 
Section 9.01.
Amendment
Section 9.02.
Notices
Section 9.03.
Successors and Assigns
Section 9.04.
Survival of Agreement
Section 9.05.
GOVERNING LAW
Section 9.06.
Entire Agreement
Section 9.07.
Waivers of Jury Trial
Section 9.08.
Severability
Section 9.09.
Separate Counterparts
Section 9.10.
Headings
Section 9.11.
Jurisdiction; Consent to Service of Process
Section 9.12.
Confidentiality
Section 9.13.
Non-petition Covenants
Definitions Annex
   

 
 
iii

 
 
SCHEDULES

Schedule 2.01(A)                                Cinedigm Assets

Schedule 2.01(B)                                Parent Assets

Schedule 2.01(C)                                Transferred Assets

Schedule 2.01(D)                                Purchaser Borrowings

 
 
iv

 
 
SALE AND CONTRIBUTION AGREEMENT (this “ Agreement ”), dated as of October 18, 2011, among CINEDIGM DIGITAL CINEMA, CORP., a Delaware corporation (“ Cinedigm ”), ACCESS DIGITAL CINEMA PHASE 2, CORP., a Delaware corporation (the “ Parent ”),  CDF2 HOLDINGS, LLC, a Delaware limited liability company (the “ Seller ”), and CINEDIGM DIGITAL FUNDING 2, LLC, a Delaware limited liability company (the “ Purchaser ”).
 
WHEREAS, on the Initial Transfer Date (as defined below) Cinedigm desires to assign to the Seller certain of its rights, title and interests in certain of its assets; and
 
WHEREAS, on the Initial Transfer Date (as defined below) the Parent desires to make a capital contribution to the Seller and assign to the Seller certain of its rights, title and interests in certain of its assets; and
 
WHEREAS, on the Initial Transfer Date the Seller desires to contribute cash to the Purchaser, and on the Initial Transfer Date and each subsequent Sale Date (as defined below), the Seller desires to sell to the Purchaser such rights, title and interests together with all of its rights, title and interests in certain other assets; and
 
WHEREAS, Purchaser desires to assume all of the Seller’s rights, title and interests in the assets to be sold to Purchaser hereunder.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:
 
ARTICLE I
 
Definitions
 
Section 1.01 .   Definitions .  Except as otherwise specified herein or as the context may otherwise require, capitalized terms used in this Agreement have the respective meanings assigned to them in the Definitions Annex attached hereto , and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms.
 
Section 1.02 .   Other Definitional Provisions .  The Rules of Construction set forth in the Definition Annex attached hereto shall apply to this Agreement.
 
ARTICLE II
 
Contribution and Sale of Transferred Assets
 
Section 2.01 .   Contribution and Sale of Transferred Assets .
 
(a)     Subject to the terms of this Agreement, on  October 18, 2011 (the “ Initial Transfer Date ”), Cinedigm agrees to, and as of the Initial Transfer Date does hereby, transfer, assign, convey, and contribute (the “ Cinedigm Contribution ”) to the Seller,  without recourse (except for a breach of the representations and warranties set forth herein), the Assets set forth on
 
 
 
 

 
 
 Part A of Schedule 2.01 . Cinedigm shall have no obligation to contribute any assets to the Seller after the Initial Transfer Date.
 
(b)     Subject to the terms of this Agreement, on  the Initial Transfer Date, the Parent agrees to, and as of the Initial Transfer Date does hereby, transfer, assign, convey, and contribute (the “ Parent Contribution ”) to the Seller $1,010,000 in cash and $990,000 in prepaid fees and, without recourse (except for a breach of the representations and warranties set forth herein), the Assets set forth on Part B of Schedule 2.01 , (together with the Assets set forth on Part A of Schedule 2.01 , the “ Transferred Assets ”) all as a capital contribution to Seller in consideration of the issuance of membership interests in the Seller, and the Seller agrees to accept such cash and Assets, and to credit to the Parent’s capital account represented by such membership interests an amount equal to the sum of (i) $2,000,000.00 plus (ii) the fair market value of the Digital Cinema Deployment Agreements (to the extent such Digital Cinema Deployment Agreements relate to Digital Systems financed under the Credit Agreement and the CHG Lease Facility Documents) set forth on Part B of Schedule 2.01 , as determined by the Managers of the Seller. The Parent shall have no obligation to contribute any assets to the Seller after the Initial Transfer Date. If the Parent shall elect to make additional capital contributions (of Digital Cinema Deployment Agreements or otherwise) after the Initial Transfer Date, such contributions shall be credited to the Parent’s capital account represented by such membership interests in an amount equal to the fair market value of such contributed Digital Cinema Deployment Agreements or other assets on the date of such contribution.
 
(c)     Subject to the terms of this Agreement, (i) on the Initial Transfer Date, the Seller agrees to, and as of the Initial Transfer Date does, hereby (A) transfer, assign, convey, and contribute (the “ Seller Contribution ”, and together with Cinedigm and Parent Contribution, the “ Contributions ”) to the Purchaser $1,010,000 in cash and $990,000 in prepaid fees as a capital contribution to Purchaser in consideration of the issuance of membership interests in the Purchaser, and the Purchaser agrees to accept such cash and prepaid fees and (B) sell, transfer, assign and convey (the “ Sale ”) without recourse (except for a breach of the representations and warranties set forth herein) to the Purchaser the Transferred Assets set forth on Part C of Schedule 2.01 and the Purchaser agrees to purchase such Transferred Assets from the Seller in consideration of the Purchaser’s agreement to borrow the amount set forth on Part D of Schedule 2.01 under the Credit Agreement and lend such amount to CHG for the purchase of Digital Systems in accordance with the CDF2 Loan Documents and the CHG Lease Facility Documents (together with any consideration delivered by the Purchaser pursuant to clause (ii) of this Section 2.01(b) , the “ Sale Consideration ”) and (ii) from time to time on any Business Day subsequent to the Initial Transfer Date designated by Seller and Purchaser (each such Business Day, together with the Initial Transfer Date, a “ Sale Date ”), the Seller may sell, transfer, assign and convey without recourse (except for a breach of the representations and warranties set forth herein) to the Purchaser, and the Purchaser may purchase rights and interests to additional Digital Cinema Deployment Agreements, Exhibitor Agreements or Supply Agreements in consideration of the Purchaser’s agreement to borrow additional funds under the Credit Agreement and lend such funds to CHG for the purchase of Digital Systems in accordance with the CDF2 Loan Documents and the CHG Lease Facility Documents.
 
(d)     The Seller agrees to assume from Cinedigm and the Parent all of  Cinedigm’s and the Parent’s obligations under the Digital Cinema Deployment Agreements
 
 
 
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 contributed to the Seller hereunder and perform all of Cinedigm’s and the Parent’s obligations thereunder to the extent such Digital Cinema Deployment Agreements relate to Digital Systems financed under the Credit Agreement and the CHG Lease Facility Documents.
 
(e)     The Purchaser agrees to (i) assume from the Seller all of the Seller’s obligations under the Digital Cinema Deployment Agreements which the Seller has assumed from Cinedigm and the Parent, the Exhibitor Agreements and the Supply Agreements relating to the Digital Systems and perform all of the Seller’s obligations thereunder, and (ii) assume all other contracts and liabilities relating to the Transferred Assets and perform all obligations of the Seller under such Phase 2 Agreements (all of the foregoing referred to in clause (i) and (ii), collectively, the “ Assumed Obligations ”).  Notwithstanding the foregoing, the Purchaser does not assume and shall have no obligation to perform any liabilities of the Seller under the Phase 2 Agreements relating to periods prior to the Initial Transfer Date (collectively, the “ Non-Assumed Obligations ”).
 
(f)     As between the Seller, on one hand, and Cinedigm or the Parent, on the other hand, the Seller shall not have any obligation to pay or perform any obligations with respect to the Digital Cinema Deployment Agreements relating to periods prior to the Initial Transfer Date. However, the parties acknowledge and agree that the Seller may be required to pay or perform such obligations by the counterparty to any such Digital Cinema Deployment Agreement that has not released Cinedigm or the Parent from its obligations under such Digital Cinema Deployment Agreement.  If the Seller pays any amount with respect to such Digital Cinema Deployment Agreement, each of Cinedigm and the Parent hereby agrees to pay the Seller in cash such amount promptly upon receiving written notice thereof from the Seller.
 
(g)     As between the Purchaser, on one hand, and the Seller, on the other hand, the Purchaser shall not have any obligation to pay or perform any Non-Assumed Obligations with respect to the Transferred Assets. However the parties acknowledge and agree that the Purchaser may be required to pay or perform such obligations by the counterparty to any Phase 2 Agreement that has not released Seller from its obligations under such Phase 2 Agreement.  If the Purchaser pays any amount with respect to such Non-Assumed Obligations, the Seller hereby agrees to pay the Purchaser in cash such amount promptly upon receiving written notice thereof from the Purchaser.
 
(h)     As between the Seller, on one hand, and Cinedigm or the Parent, on the other hand, neither Cinedigm nor the Parent shall have any obligation to pay or perform any obligations with respect to the Digital Cinema Deployment Agreements to the extent contributed to the Seller hereunder relating to periods on or after the Initial Transfer Date.  However, the parties hereto acknowledge and agree that Cinedigm or the Parent may be required to pay or perform such obligations by the counterparty to any such Digital Cinema Deployment Agreement that has not released Cinedigm or the Parent from its obligations under such Digital Cinema Deployment Agreement.  If Cinedigm or the Parent pays any amount with respect to such obligations, the Seller hereby agrees to pay to the Parent in cash such amount promptly upon receiving written notice thereof from Cinedigm or the Parent.
 
(i)     As between the Purchaser, on one hand, and the Seller and Cinedigm or the Seller and the Parent on the other hand, none of the Seller, Cinedigm or the Parent shall have
 
 
3

 
 
any obligation to pay or perform any Assumed Obligations with respect to the Transferred Assets.  However, the parties acknowledge and agree that the Seller, Cinedigm or the Parent may be required to pay or perform such obligations by the counterparty to any Phase 2 Agreement that has not released the Seller, Cinedigm or the Parent from its obligations under such Phase 2 Agreement.  If the Seller, Cinedigm or the Parent pays any amount with respect to such Assumed Obligations, the Purchaser hereby agrees to pay to the Seller, Cinedigm or the Parent, as the case may be, in cash such amount set forth in the Cash Expense Report (as defined in the Credit Agreement) and at such times as permitted pursuant to Sections 4.4(a) and 4.5(a) of the Multiparty Agreement, as applicable.  To the extent sufficient funds are not then so permitted to be paid, payment shall be deferred, without interest, until such funds are permitted to be paid in accordance with Sections 4.4(a) and 4.5(a) of the Multiparty Agreement.  All receipts of Transferred Assets that the Seller, Cinedigm or the Parent may receive after the Initial Transfer Date shall be paid within two (2) Business Days after receipt thereof by the Seller, Cinedigm or the Parent to an account (the “ Designated Account ”) specified in writing to the Seller, Cinedigm and the Parent by the Purchaser.
 
(j)     It is the intention of Cinedigm, the Parent and the Seller that the Contributions will constitute the immediate and absolute and irrevocable contribution, transfer and assignment from Cinedigm to Seller and Parent to the Seller, as the case may be of all of Cinedigm’s and Parent’s right, title and interest in and to the Transferred Assets subject to the Contributions.  The Seller will be entitled to all incidents, benefits and risks of ownership of such Transferred Assets, including, without limitation, the right to sell, exploit and otherwise transfer and dispose of such Transferred Assets.
 
(k)     It is the intention of the Seller and the Purchaser that the Sale will constitute the immediate and absolute and irrevocable sale, transfer and assignment from the Seller to the Purchaser of all of the Seller’s right, title and interest in and to the Transferred Assets subject to the Sale.  The Purchaser will be entitled to all incidents, benefits and risks of ownership of such Transferred Assets, including, without limitation, the sole right to sell, exploit and otherwise transfer and dispose of such Transferred Assets.
 
(l)     In connection with the Sale and the Contributions, each of the Seller, Cinedigm and the Parent shall, as applicable, (i) relinquish all power to sell, pledge, assign, transfer, license, or otherwise exploit or dispose of any Transferred Assets, (ii) have no further obligation to the Purchaser with respect to any such Transferred Assets (except as expressly set forth in this Section 2.01 and Article VIII hereof) and (iii) have no right or obligation under this Agreement, by implication or otherwise, to repurchase from the Seller, in the case of Cinedigm and the Parent, and the Purchaser, in the case of the Seller, any such Transferred Assets or to rescind or otherwise effect retroactively any purchase of any such Transferred Assets after the Initial Transfer Date or a subsequent Sale Date, as the case may be.  The Sale Consideration may not be altered or otherwise changed after delivery thereof from the Purchaser to the Seller.
 
(m)     Cinedigm and the Parent hereby grant to the Seller an irrevocable power of attorney (coupled with an interest) to take any and all steps in Cinedigm’s or the Parent’s name necessary or desirable, in the reasonable opinion of the Seller to collect all amounts due to the Seller in connection with the rights in the Digital Cinema Deployment Agreements contributed hereunder, including enforcing such rights and exercising all rights and remedies in
 
 
 
4

 
 
 respect thereof.  Cinedigm or the Parent shall from time to time take whatever steps are reasonably requested in writing by the Seller in order to enforce such rights in the Digital Cinema Deployment Agreements.
 
(n)     The Seller hereby grants to the Purchaser an irrevocable power of attorney (coupled with an interest) to take any and all steps in the Seller’s name necessary or desirable, in the reasonable opinion of the Purchaser or the Administrative Servicer (as defined in the Credit Agreement), as the case may be, to collect all amounts due to the Seller in connection with the Transferred Assets, including enforcing the Phase 2 Agreements and exercising all rights and remedies in respect thereof.  The Seller shall from time to time take whatever steps are reasonably requested in writing by the Purchaser in order to enforce its rights in the Transferred Assets.
 
(o)     Neither the Seller nor the Parent intends the Seller Contribution to be, or for any purpose to be characterized as, a loan from the Seller to the Parent.  It is, further, not the intention of Cinedigm, the Parent or the Seller that the conveyance of the Transferred Assets by Cinedigm or the Parent be deemed a grant of a security interest in such Transferred Assets by Cinedigm or the Parent to the Seller to secure a debt or obligation of Cinedigm or the Parent.  However, in the event that, notwithstanding the intent of the parties to this Agreement, any portion of such Transferred Assets is considered to be the property of Cinedigm’s or the Parent’s estate, then (i) this Agreement shall be deemed to be a security agreement within the meaning of Article 9 of the UCC and (ii) the conveyance by Cinedigm or the Parent provided for in this Agreement shall be deemed to be a grant by Cinedigm or the Parent to the Seller of, and each of Cinedigm and the Parent hereby grants to the Seller, a security interest in and to all of Cinedigm’s or the Parent’s right, title and interest in, to and under such Transferred Assets, whether then or thereafter existing or created, to secure (A) the rights of the Seller thereunder and (B) the payment and performance of Cinedigm’s or the Parent’s obligations (whether monetary or otherwise) under this Agreement.
 
(p)     Neither the Seller nor the Purchaser intends the transactions contemplated by this Agreement to be, or for any purpose to be characterized as, loans from the Purchaser to the Seller.  It is, further, not the intention of the Purchaser or the Seller that the conveyance of the Transferred Assets by the Seller be deemed a grant of a security interest in the Transferred Assets by the Seller to the Purchaser to secure a debt or obligation of the Seller.  However, in the event that, notwithstanding the intent of the parties to this Agreement, any portion of the Transferred Assets is considered to be the property of the Seller’s estate, then (i) this Agreement shall be deemed to be a security agreement within the meaning of Article 9 of the UCC and (ii) the conveyance by the Seller provided for in this Agreement shall be deemed to be a grant by the Seller to the Purchaser of, and the Seller thereby grants to the Purchaser, a security interest in and to all of the Seller’s right, title and interest in, to and under the Transferred Assets, whether then or thereafter existing or created, to secure (A) the rights of the Purchaser thereunder and (B) the payment and performance of the Seller’s obligations (whether monetary or otherwise) under this Agreement.
 
Section 2.02 .   Sale Consideration .  Subject to the terms of this Agreement, the Purchaser agrees to (a) provide Sale Consideration for the Transferred Assets sold hereunder on
 
 
 
5

 
 
the Initial Transfer Date and (b) provide the Sale Consideration for additional assets on each Sale Date after the Initial Transfer Date.
 
ARTICLE III
 
Conditions Precedent
 
Section 3.01 .   Conditions Precedent to the Purchaser’s Acquisition of Transferred Assets on the Initial Transfer Date .  The obligation of the Purchaser to acquire the Transferred Assets on the Initial Transfer Date from the Seller is subject to the satisfaction of the following conditions precedent (unless waived by the Purchaser):
 
(a)     the Purchaser shall have received a copy of (i) the duly adopted consent of the Board of Directors of each of Cinedigm and the Parent authorizing this Agreement, the documents to be delivered by Cinedigm and the Parent hereunder and the transactions contemplated hereby, certified by an officer of each of Cinedigm and the Parent and (ii) the duly adopted approval of the managers and Member of the Seller authorizing this Agreement, the documents to be delivered by the Seller hereunder and the transactions contemplated hereby, certified by an officer of the Seller;
 
(b)     the Purchaser shall have received duly executed certificates of the secretaries of the Seller, Cinedigm and the Parent certifying the names and true signatures of the officers authorized on its behalf to sign this Agreement and the other documents to be delivered by Seller and the Parent hereunder;
 
(c)     each of the representations and warranties made by the Seller in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date; and
 
(d)     each of the representations and warranties made by the Parent in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date.
 
(e)     Each of the representations and warranties made by Cinedigm in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date.
 
Section 3.02 .   Conditions Precedent to Cinedigm’s Obligation to Make the Cinedigm Contribution and the Seller’s Obligation to Accept the Cinedigm Contribution and the Parent Contribution, Make the Seller Contribution and Sell the Transferred Assets .  The obligation of Cinedigm to make the Cinedigm Contribution and the obligation of the Seller to accept the Cinedigm Contribution and Parent Contribution, to make the Seller Contribution and to transfer the Transferred Assets to the Purchaser on the Initial Transfer Date shall be subject to the satisfaction of the following conditions precedent:
 
(a)     the Seller shall have received (i) a copy of the duly adopted consent of the managers and Member of the Purchaser authorizing this Agreement, the documents to be delivered by the Purchaser hereunder and the transactions contemplated hereby, certified by an officer of the Purchaser and (ii) the duly adopted consent of the Board of Directors of each of Cinedigm and the Parent authorizing this Agreement, the documents to be delivered by
 
 
6

 
 
Cinedigm and the Parent hereunder and the transactions contemplated hereby, certified by an officer of each of Cinedigm and the Parent;
 
(b)     Cinedigm shall have received (i) a copy of the duly adopted consent of the managers and Member of the Purchaser authorizing this Agreement, the documents to be delivered by the Purchaser hereunder and the transactions contemplated hereby, certified by an officer of the Purchaser and (ii) the duly adopted consent of the Board of Directors of each of the Seller and the Parent authorizing this Agreement, the documents to be delivered by the Seller and the Parent hereunder and the transactions contemplated hereby, certified by an officer of each of the Seller and the Parent;
 
(c)     the Seller shall have received duly executed certificates of the secretaries of the Purchaser, Cinedigm and the Parent certifying the names and true signatures of the officers authorized on its behalf to sign this Agreement and the other documents to be delivered by the Purchaser, Cinedigm and the Parent hereunder;
 
(d)     Cinedigm shall have received duly executed certificates of the secretaries of the Purchaser, the Seller and the Parent certifying the names and true signatures of the officers authorized on its behalf to sign this Agreement and the other documents to be delivered by the Purchaser, the Seller and the Parent hereunder;
 
(e)     each of the representations and warranties made by the Purchaser in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date;
 
(f)     with respect to Cinedigm, each of the representations and warranties made by the Seller in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date;
 
(g)     with respect to Seller, each of the representations and warranties made by Cinedigm in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date; and
 
(h)     each of the representations and warranties made by the Parent in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date.
 
Section 3.03 .   Conditions Precedent to the Parent’s Obligation to Make the Parent Contribution .  The obligation of the Parent to make the Parent Contribution to the Seller on the Initial Transfer Date shall be subject to the satisfaction of the following conditions precedent:
 
(a)     the Parent shall have received (i) a copy of the duly adopted consent of the managers and Member of the Purchaser authorizing this Agreement, the documents to be delivered by the Purchaser hereunder and the transactions contemplated hereby, certified by an officer of the Purchaser, (ii) the duly adopted consent of the managers and Member of the Seller authorizing this Agreement, the documents to be delivered by the Seller hereunder and the transactions contemplated hereby, certified by an officer of the Seller; and (iii) the duly adopted consent of the Board of Directors of Cinedigm authorizing this Agreement, the documents to be delivered by Cinedigm hereunder and the transactions contemplated hereby, certified by an officer of Cinedigm;
 
 
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(b)     the Parent shall have received a duly executed certificate of the secretaries of the Purchaser, Cinedigm and the Seller certifying the names and true signatures of the officers authorized on its behalf to sign this Agreement and the other documents to be delivered by  the Purchaser, Cinedigm and the Seller hereunder;
 
(c)     each of the representations and warranties made by the Purchaser and the Seller in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date;
 
(d)     each of the representations and warranties made by the Seller in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date; and
 
(e)     each of the representations and warranties made by Cinedigm in this Agreement shall be true and correct in all material respects on and as of the Initial Transfer Date.
 
Section 3.04 .   Conditions Precedent to Purchaser’s Acquisition of Assets Subsequent to the Initial Transfer Date .  The obligation of the Purchaser to purchase and assume assets from the Seller on each Sale Date other than the Initial Transfer Date shall be subject to the satisfaction of the following conditions precedent:
 
(a)     each of the representations and warranties made by the Seller in this Agreement shall be true and correct in all material respects on and as of such Sale Date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);
 
(b)     the Seller shall have performed in all material respects all of its obligations to be performed hereunder on or before such Sale Date; and
 
(c)     the sale being made on such Sale Date has been documented in form and substance reasonably satisfactory to the Purchaser.
 
Section 3.05 .   Conditions Precedent to the Seller’s Acceptance of Capital Contributions from the Parent or Sale of Assets to the Purchaser Subsequent to the Initial Transfer Date .  (a) The obligation of the Seller to accept capital contributions from the Parent after the Initial Transfer Date shall be subject to the satisfaction of the following conditions precedent:
 
(i)     each of the representations and warranties made by the Parent in this Agreement shall be true and correct in all material respects on and as of the date of such contribution (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);
 
(ii)     the Parent shall have performed in all material respects all of its obligations to be performed hereunder on or before such date; and
 
 
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(iii)     the contribution being made on such date has been documented in form and substance reasonably satisfactory to the Seller.
 
(b) The obligation of the Seller to sell, transfer, assign and convey assets to the Purchaser after the Initial Transfer Date shall be subject to the satisfaction of the following conditions precedent:
 
(i)     each of the representations and warranties made by the Purchaser in this Agreement shall be true and correct in all material respects on and as of such Sale Date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);
 
(ii)     the Purchaser shall have performed in all material respects all of its obligations to be performed hereunder on or before such Sale Date; and
 
(iii)     the sale being made on such Sale Date has been documented in form and substance reasonably satisfactory to the Seller.
 
Section 3.06 .   Conditions Precedent to the Parent’s Contribution of Assets Subsequent to the Initial Transfer Date .  The obligation of the Parent to make capital contributions to the Seller after the Initial Transfer Date shall be subject to the satisfaction of the following conditions precedent:
 
(a)     each of the representations and warranties made by the Seller in this Agreement shall be true and correct in all material respects on and as of such date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);
 
(b)     the Seller shall have performed in all material respects all of its obligations to be performed hereunder on or before such date; and
 
(c)     the contribution being made on such date has been documented in form and substance reasonably satisfactory to the Purchaser.
 
ARTICLE IV
 
Representations and Warranties of the Seller
 
The Seller makes the following representations and warranties as of the Initial Transfer Date and each Sale Date:
 
Section 4.01 .   Organization and Good Standing .  The Seller is duly organized and validly existing as a limited liability company in good standing under the laws of the State of Delaware, with the power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the power, authority and legal right to acquire, own and, to sell and license the
 
 
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exploitation of the Transferred Assets.  No action has been taken by the Seller or is pending, no proceedings have been commenced or are threatened or are pending against the Seller for (i) the winding-up, liquidation, dissolution, examinership or reorganization of the Seller; or (ii) the Seller to enter into any composition or arrangement with its creditors generally; or (iii) the appointment of a receiver, examiner, liquidator, trustee or similar officer in respect of the Seller or any of its property, undertaking or assets.
 
Section 4.02 .   Due Qualification .  The Seller is in good standing as a foreign entity in all jurisdictions where (a) the nature of its properties or business so requires or (b) the failure to be so qualified or be in good standing could not have a Material Adverse Effect on the Seller.
 
Section 4.03 .   Power and Authority .  The Seller (i) has duly executed and delivered this Agreement,  (ii) has the power and authority to execute and deliver this Agreement and to perform and observe its terms, (iii) has full power and authority to sell the Transferred Assets to be sold to the Purchaser, and (iv) the execution, delivery and performance of this Agreement has been duly authorized by the Seller by all necessary action.
 
Section 4.04 .   Binding Obligation .  This Agreement constitutes a legal, valid and binding obligation of the Seller enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
 
Section 4.05 .   No Violation .  The execution, delivery and performance by the Seller of this Agreement and the fulfillment of the terms hereof (a) do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time or both) a default under, any provision of, or require the consent of any third party under (i) the constitutive documents of the Seller, (ii) any indenture, credit agreement or other financing agreement to which the Seller is a party or by which it shall be bound, (iii) the Phase 2 Agreements and any other material agreement to which the Seller is a party or by which it shall be bound, except insofar as any conflict, default or breach of any such agreement under this clause (iii) would not result in a Material Adverse Effect on the Seller, (b) will not result in the creation or imposition of any Lien (other than any Permitted Lien) upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument and (c) will not violate any law or statute or any order, rule or regulation applicable to the Seller of any Governmental Authority having jurisdiction over the Seller or its properties if such violation is reasonably likely to have a Material Adverse Effect on the Seller.
 
Section 4.06 .   No Proceedings .  There are no proceedings or investigations pending or, to the Seller’s knowledge, threatened, before any Governmental Authority having jurisdiction over the Seller or its properties:  (i) asserting the invalidity of this Agreement or any of the Phase 2 Agreements to which the Seller is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the Phase 2 Agreements to which the Seller is a party or (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, this Agreement or any of the other Loan Documents, the CHG Lease Facility Documents or the Phase 2 Agreements to which the Seller is a party.
 
 
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Section 4.07 .   Approvals .  No approval, authorization, consent, order or other action of, or filing with, any Governmental Authority by the Seller is required in connection with the execution and delivery by the Seller of this Agreement, the performance by the Seller of the transactions contemplated hereby or the fulfillment by the Seller of the terms hereof, except those that have been obtained, effected or made.
 
Section 4.08 .   Financial Condition .  On and as of the date hereof, on a pro forma basis after giving effect to the transactions contemplated hereby, the Seller is Solvent.
 
Section 4.09 .   No Fraudulent Transfer .  The Seller has neither entered, nor is entering, into this Agreement with the intent (whether actual or constructive) to hinder, delay, or defraud its present or future creditors and is receiving reasonably equivalent value and fair consideration for the Transferred Assets being transferred hereunder.
 
Section 4.10 .   The Transferred Assets .
 
(a)     Ownership .  As of the Initial Transfer Date, the Transferred Assets constitute all of the assets of the Seller other than the Management Services Agreement, Software License Agreements, and the CHG Lease Documents. As of the Initial Transfer Date (and each subsequent Sale Date) and immediately prior to the transfer of any Transferred Assets to the Purchaser, (i) the Seller will be the sole and legal beneficial owner of the Transferred Assets that are the subject of the Sale from the Seller free and clear of all Liens and rights of others (other than Permitted Liens, Liens created under the CHG Lease Facility Documents and Liens and rights of others expressly permitted pursuant to this Agreement) and (ii) there shall be no effective UCC financing statement (or any equivalent instrument) covering such Transferred Assets (other than with respect to Permitted Liens or Liens created pursuant to the CHG Lease Facility Documents).
 
(b)     Agreements .  At the Initial Transfer Date, each Exhibitor Agreement and each Supply Agreement that constitute Transferred Assets is in full force and effect, and there is no, and the Seller has received no notice, after due inquiry, of any default under any such agreement by the Seller.
 
(c)     Transfer Taxes . There is no tax payable by the Purchaser in connection with the conveyance of the Transferred Assets to the Purchaser.
 
Section 4.11 .   True and Complete Disclosure .  (a) Neither this Agreement nor any Phase 2 Agreements to which the Seller is a party nor any agreement, document, certificate or statement furnished to the Purchaser, the Collateral Agent and/or the Lenders by or on behalf of the Seller in connection with the transactions contemplated by the Phase 2 Agreements, including, without limitation, information relating to the Transferred Assets and the operations of the Seller, at the time it was furnished, contained any untrue statement of a material fact or omitted to state a material fact, under the circumstances under which it was made, necessary in order to make the statements contained herein or therein not misleading (considered in the context of all other information provided to such parties), it being understood that for purposes of this Section 4.11 , such factual information and data shall not include pro forma financial
 
 
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information or projections (including financial estimates, forecasts and other forward looking information or information of a general economic or general industry nature).
 
(b)           The projections (including any financial estimates, forecasts and other forward-looking information) contained in the information and data referred to in paragraph (a) above were based on good faith estimates and assumptions believed by such Person to be reasonable at the time made, it being recognized by the Purchaser that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results.

ARTICLE V
 
Representations and Warranties of the Purchaser
 
The Purchaser makes the following representations and warranties as of the Initial Transfer Date and each Sale Date:
 
Section 5.01 .   Organization and Good Standing .  The Purchaser is duly organized and validly existing as a limited liability company in good standing under the laws of the State of Delaware, with the power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the power, authority and legal right to acquire, own, sell and license the exploitation of the Transferred Assets. No action has been taken by the Purchaser or is pending, no proceedings have been commenced or are threatened or are pending against the Purchaser for (i) the winding-up, liquidation, dissolution, examinership or reorganization of the Purchaser; or (ii) the Purchaser to enter into any composition or arrangement with its creditors generally; or (iii) the appointment of a receiver, examiner, liquidator, trustee or similar officer in respect of the Purchaser or any of its property, undertaking or assets.
 
Section 5.02 .   Due Qualification .  The Purchaser is in good standing as a foreign entity in all jurisdictions where (a) the nature of its properties or business so requires or (b) the failure to be so qualified or be in good standing could not have a Material Adverse Effect on the Purchaser.
 
Section 5.03 .   Power and Authority .  The Purchaser (i) has duly executed and delivered this Agreement, (ii) has the power and authority to execute and deliver this Agreement and to perform and observe its terms; (iii) has full power and authority to purchase the property to be purchased by it hereunder, and (iv) has duly authorized the execution, delivery and performance of this Agreement has been duly authorized by the Purchaser by all necessary action.
 
Section 5.04 .   Binding Obligation .  This Agreement constitutes a legal, valid and binding obligation of the Purchaser enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
 
 
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Section 5.05 .   Certain Liabilities .  After giving effect to the transactions contemplated by the Loan Documents, the CDF2 Loan Documents and the Phase 2 Agreements, the Purchaser believes that it will be able to pay and perform its obligations as they become due, including, without limitation, its obligations to pay the Assumed Obligations.
 
ARTICLE VI
 
Representations and Warranties of Cinedigm and the Parent
 
Each of Cinedigm and the Parent makes the following representations and warranties as of the Initial Transfer Date and on the date of each subsequent contribution to the Seller:
 
Section 6.01 .   Organization and Good Standing .  Each of Cinedigm and the Parent is duly organized and validly existing as a corporation in good standing under the laws of the State of Delaware, with the power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the power, authority and legal right to acquire, own and, to contribute and license the exploitation of the Transferred Assets.  No action has been taken by Cinedigm or the Parent or is pending, no proceedings have been commenced or are threatened or are pending against Cinedigm or the Parent for (i) the winding-up, liquidation, dissolution, examinership or reorganization of Cinedigm or the Parent; or (ii) Cinedigm or the Parent to enter into any composition or arrangement with its creditors generally; or (iii) the appointment of a receiver, examiner, liquidator, trustee or similar officer in respect of Cinedigm or the Parent or any of its property, undertaking or assets.
 
Section 6.02 .   Due Qualification .  Each of Cinedigm and the Parent is in good standing as a foreign entity in all jurisdictions where (a) the nature of its properties or business so requires and (b) the failure to be so qualified or be in good standing could have a Material Adverse Effect on Cindegm or the Parent.
 
Section 6.03 .   Power and Authority .  Each of Cinedigm or the Parent (i) has duly executed and delivered this Agreement; (ii) has the power and authority to execute and deliver this Agreement and to perform and observe its terms, (iii) has full power and authority to contribute the Transferred Assets to be contributed to the Seller, and (iv) the execution, delivery and performance of this Agreement has been duly authorized by Cinedigm and the Parent by all necessary action.
 
Section 6.04 .   Binding Obligation .  This Agreement constitutes a legal, valid and binding obligation of Cinedigm and the Parent enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
 
Section 6.05 .   No Violation .  The execution, delivery and performance by Cinedigm or the Parent of this Agreement and the fulfillment of the terms hereof (a) do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time or both) a default under, any provision of, or require the consent of any third
 
 
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party under (i) the constitutive documents of Cinedigm or the Parent, (ii) any indenture, credit agreement or other financing agreement to which Cinedigm or the Parent is a party or by which it shall be bound, (iii) any Phase 2 Agreement or other material agreement to which Cinedigm or the Parent is a party or by which it shall be bound, except insofar as any conflict, default or breach of any such agreement under this clause (iii) would not result in a Material Adverse Effect on Cinedigm or the Parent, (b) will not result in the creation or imposition of any Lien (other than any Permitted Lien) upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument and (c) will not violate any law or statute or any order, rule or regulation applicable to Cinedigm or the Parent of any Governmental Authority having jurisdiction over Cinedigm or the Parent or its properties if such violation is reasonably likely to have a Material Adverse Effect on Cinedigm or the Parent.
 
Section 6.06 .   No Proceedings .  There are no proceedings or investigations pending or, to Cinedigm’s or the Parent’s knowledge, threatened, before any Governmental Authority having jurisdiction over Cinedigm or the Parent or its properties:  (i) asserting the invalidity of this Agreement or any of the Phase 2 Agreements to which Cinedigm or the Parent is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the Phase 2 Agreements to which Cinedigm or the Parent is a party or (iii) seeking any determination or ruling that might materially and adversely affect the performance by Cinedigm or the Parent of its obligations under, or the validity or enforceability of, this Agreement or any of the Phase 2 Agreements to which Cinedigm or the Parent is a party.
 
Section 6.07 .   Approvals .  No approval, authorization, consent, order or other action of, or filing with, any Governmental Authority by Cinedigm or the Parent is required in connection with the execution and delivery by Cinedigm or the Parent of this Agreement, the performance by Cinedigm or the Parent of the transactions contemplated hereby or the fulfillment by Cinedigm or the Parent of the terms hereof, except those that have been obtained, effected or made.
 
Section 6.08 .   No Fraudulent Transfer .  Neither Cinedigm nor the Parent has entered, or is entering, into this Agreement with the intent (whether actual or constructive) to hinder, delay, or defraud its present or future creditors and is receiving reasonably equivalent value and fair consideration for the Transferred Assets being transferred hereunder.
 
Section 6.09 .   The Transferred Assets .
 
(a)     Ownership .  As of the Initial Transfer Date (and as of the date of any subsequent contribution) and immediately prior to the contribution of any Transferred Assets to the Seller, (i) each of Cinedigm and Parent will be the sole and legal beneficial owner of the Transferred Assets that are the subject of the Cinedigm Contribution and Parent Contribution from Cinedigm and Parent, respectively, free and clear of all Liens and rights of others (other than Permitted Liens and Liens and rights of others expressly permitted pursuant to this Agreement), and (ii) there shall be no effective UCC financing statement (or any equivalent instrument) covering such Transferred Assets (other than with respect to Permitted Liens).
 
(b)     Agreements .  At the Initial Transfer Date and the date of any subsequent contribution to the Seller, each Digital Cinema Deployment Agreement in which rights are
 
 
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contributed to the Seller is in full force and effect, and there is no, nor has Cinedigm nor Parent received notice, after due inquiry, of any default under any such agreement by Cinedigm or the Parent.
 
Section 6.10 .   True and Complete Disclosure .  Neither this Agreement nor any Phase 2 Agreement to which Cinedigm or Parent is a party nor any agreement, document, certificate or statement furnished to the Seller, the Collateral Agent and/or the Lenders by or on behalf of Cinedigm or the Parent in connection with the transactions contemplated by the Phase 2 Agreements, including, without limitation, information relating to the Transferred Assets and the operations of  Cinedigm or the Parent, at the time it was furnished, contained any untrue statement of a material fact or omitted to state a material fact, under the circumstances under which it was made, necessary in order to make the statements contained herein or therein not misleading (considered in the context of all other information provided to such parties), it being understood that for purposes of this Section 6.11 , such factual information and data shall not include pro forma financial information or projections (including financial estimates, forecasts and other forward looking information or information of a general economic or general industry nature).
 
ARTICLE VII
 
Covenants of the Seller , Cinedigm and the Parent
 
Section 7.01 .   Notices .  Each of the Seller, Cinedigm and the Parent, as the case may be, shall notify the Purchaser promptly after becoming aware of:  (a) any Lien or writ of attachment on any Transferred Asset other than Permitted Liens, Liens created under the CHG Lease Facility Documents and the conveyances hereunder, and (b) any litigation, investigation or proceeding affecting the Seller, Cinedigm, the Parent or any of their respective subsidiaries which could reasonably be expected, in the reasonable good faith business judgment of the Seller or the Parent, as the case may be, to result in a Material Adverse Effect on the Seller, Cinedigm or the Parent, as the case may be.
 
Section 7.02 .   Compliance with Law .  Each of the Seller, Cinedigm and the Parent hereby agrees to comply in all material respects with its organizational or governing documents and all laws, treaties, rules, regulations and determinations of any Governmental Authority applicable to the Seller, Cinedigm or the Parent, as the case may be, except to the extent that the failure to comply therewith, in the aggregate, could not reasonably be expected to have a Material Adverse Effect on the Seller, Cinedigm or the Parent, as the case may be.
 
Section 7.03 .   Accounting .  The Seller, Cinedigm or the Parent shall indicate in its consolidated financial statements and computer records assigned that the Transferred Assets have been absolutely transferred, sold and assigned to the Purchaser, and neither the Seller nor the Parent nor Cinedigm will otherwise claim in its records ownership of the Transferred Assets or the proceeds thereof.  Neither the Seller, Cinedigm nor the Parent shall take any action that is inconsistent with Purchaser’s ownership of the Transferred Assets.
 
Section 7.04 .   Collections Received after the Initial Transfer Date .  In the event the Seller or the Parent receives any Collections after the Initial Transfer Date, it shall cause such
 
 
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amounts to be deposited in the Collection Account within two (2) Business Days after receipt thereof; provided that, for purposes of this Section 7.04 , any Collections received by the Seller or the Parent after 3:00 p.m. (New York time) on any Business Day shall be deemed to have been received on the next succeeding Business Day.

ARTICLE VIII
 
Seller Indemnities
 
Cinedigm, the Seller and the Parent, severally not jointly, agree (a) to pay, indemnify and hold the Purchaser harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, any stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement and any such other documents and (b) to pay, indemnify and hold the Purchaser harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever arising out of, relating to or resulting from any of the following (collectively, the “ Purchaser Indemnified Liabilities ”):
 
(i)     the transfer by the Seller, Cinedigm or Parent of any interest in any Transferred Asset to any Person other than the Purchaser;
 
(ii)     the failure of any representation or warranty or statement made or deemed made by the Seller, Cinedigm or Parent under or in connection with this Agreement or in any certificate or report delivered pursuant hereto to be true and correct in any material respect when made or deemed made;
 
(iii)     any third-party claim (other than any third-party claim based on any acts or omissions of the Purchaser not consistent with the manner in which the Transferred Assets were exploited by the Seller, Cinedigm or the Parent prior to the date hereof) that the exploitation of any Transferred Assets sold hereunder infringes upon, misappropriates or otherwise violates any patent, copyright, trademark, trade secret, right of publicity or privacy, moral right or other proprietary right of any Person, or any claim that any such furnished materials are defamatory or otherwise tortious;
 
(iv)     the failure by the Seller, Cinedigm or Parent to perform its contractual duties or obligations under this Agreement;
 
(v)     the failure by the Seller, Cinedigm or Parent to comply with any Applicable Law, rule or regulation of any governmental authority with respect to the transfer of any Transferred Assets;
 
(vi)     any Non-Assumed Obligations; or
 
 
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(vii)     the failure to pay to the Purchaser any amount with respect to the Transferred Assets received by the Seller, Cinedigm or Parent.
 
ARTICLE IX
 
Miscellaneous Provisions
 
Section 9.01 .   Amendment .  Neither this Agreement nor any terms hereof may be amended, supplemented or modified except in a writing signed by the Seller, Cinedigm, Parent and the Purchaser.
 
Section 9.02 .   Notices .  All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or five (5) Business Days after being deposited in the mail, by U.S. first class mail postage prepaid, one (1) Business Day after being sent by nationally recognized overnight courier, or, in the case of telecopy notice, when received, addressed to the applicable party at its address set forth on the signature pages hereto.
 
Section 9.03 .   Successors and Assigns .  This Agreement shall be binding upon and inure to the benefit of the Parent, Cinedigm, the Seller and the Purchaser and their respective successors (whether by merger, consolidation or otherwise) and assigns.  The provisions of this Agreement are for the benefit of the Seller, Cinedigm, the Parent and the Purchaser and such respective successors and assigns, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Transferred Assets or under or in respect of this Agreement or any covenants, conditions or provisions contained herein, except as provided in the last sentence of this Section 9.03 .  Each of the Seller, Cinedigm and the Parent agrees that it will not assign or transfer all or any portion of its rights or obligations hereunder without the prior written consent of the Purchaser.  Each of the Seller, Cinedigm and the Parent understands that the Purchaser will grant a security interest in the Transferred Assets (including the right to all revenues and proceeds of the Transferred Assets), and its rights under this Agreement, to secure the Obligations of the Purchaser to the Secured Parties.  Each of the Seller, Cinedigm and Parent hereby consents to the grant of such security interest and, in connection therewith, (w) agrees that the Collateral Agent shall be a third party beneficiary of this Agreement, (x) agrees that the Collateral Agent may have the right to exercise the Purchaser’s rights and remedies hereunder, (y) agrees that the Collateral Agent may have the right to foreclose on its security interest in the Purchaser’s rights under this Agreement and to exercise the Purchaser’s rights and remedies hereunder, and (z) acknowledges and agrees that it will upon the reasonable request of the Purchaser agree with Collateral Agent that neither this Agreement nor any of the terms hereof may be amended, supplemented, modified or waived without the written consent of such party.
 
 
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Section 9.04 .   Survival of Agreement .  All covenants, agreements, representations and warranties made by the Seller herein and/or in the appendices, certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any Phase 2 Agreement shall be considered to have been relied upon by the Purchaser and shall survive the Sales and Contributions of the Transferred Assets to the Purchaser and the Seller, respectively, regardless of any investigation made by the Purchaser, the Seller or any party providing financing to the Purchaser or the Seller or on their behalf, and shall continue in full force and effect so long as this Agreement and the Loan Documents have not been terminated.
 
Section 9.05 .   GOVERNING LAW .  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THEREOF WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.
 
Section 9.06 .   Entire Agreement .  This Agreement, the Phase 2 Agreements, the Loan Documents, the CHG Lease Facility Documents and the CDF2 Loan Documents constitute the entire contract among the parties relative to the subject matter hereof.  Any previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement, the Phase 2 Agreements, the Loan Documents, the CHG Lease Facility Documents and the other CDF2 Loan Documents.
 
Section 9.07 .   Waivers of Jury Trial .  EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION OR ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS.  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 AND THE OTHER TRANSACTION DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS OF THIS SECTION 9.07 .
 
Section 9.08 .   Severability .  In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby.  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 9.09 .   Separate Counterparts .  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by
 
 
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facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
 
Section 9.10 .   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 9.11 .   Jurisdiction; Consent to Service of Process .
 
(a)     Each of Cinedigm, the Parent, the Seller and the Purchaser hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement 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.
 
(b)     Each of Cinedigm, the Parent, the Seller and the Purchaser hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that 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 in any New York State or Federal court.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
 
(c)     Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.02 .  Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
 
Section 9.12 .   Confidentiality .  Each party hereto agrees to keep confidential (and (a) to cause its respective officers, directors and employees to keep confidential and (b) to use commercially reasonable efforts to cause its respective agents and representatives to keep confidential) the Information (as defined below) and all copies thereof, extracts therefrom and analyses or other materials based thereon, except that the parties hereto shall be permitted to disclose Information (i) to the extent required by Applicable Laws and regulations or by any subpoena or similar legal or judicial process or (ii) as requested by rating agencies.  For the purposes of this Section 9.12 , the term “Information” shall mean all information that is subject to the confidentiality provisions contained in the Phase 2 Agreements.  The provisions of this Section 9.12 shall remain operative and in full force and effect regardless of the expiration and term of this Agreement.  Notwithstanding the foregoing, the parties hereto agree that the filing of any of the Phase 2 Agreements, the Loan Documents, the CHG Lease Facility Documents or CDF2 Loan Documents (to the extent necessary in the reasonable judgment of the Purchaser after consulting with the Collateral Agent) with the Securities and Exchange Commission (the
 
 
19

 
 
SEC ”) in accordance with the SEC rules and regulations will not result in a violation of the foregoing confidentiality provisions.
 
Section 9.13 .   Non-petition Covenants .  Notwithstanding any prior termination of this Agreement, neither Cinedigm, the Parent nor the Seller shall (in the case of the Purchaser) and Cinedigm or the Parent  shall not (in the case of the Seller), prior to the date which is one year and one day after the repayment of any third party debt under any Loan Document or CHG Lease Facility Document acquiesce, petition or otherwise invoke or cause the Purchaser or the Seller, as applicable to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against the Purchaser or the Seller, as applicable under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Purchaser or the Seller, as applicable or any substantial part of the property of the Purchaser or the Seller, as applicable, or ordering the winding up or liquidation of the affairs of the Purchaser or the Seller, as applicable.
 
 
20

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
 
   
CINEDIGM DIGITAL FUNDING 2, LLC
       
   
By:
/s/ Gary S. Loffredo
   
Name:
Gary S. Loffredo
   
Title:
General Counsel and Secretary
       
   
Address:
   
55 Madison Avenue
   
Morristown, NJ  07960
   
 
      CDF2 HOLDINGS, LLC
       
   
By:
/s/ Gary S. Loffredo
   
Name:
Gary S. Loffredo
   
Title:
President
       
   
Address:
   
55 Madison Avenue
   
Morristown, NJ  07960
     
      ACCESS DIGITAL CINEMA PHASE 2, CORP.
       
   
By:
/s/ Gary S. Loffredo
   
Name:
Gary S. Loffredo
   
Title:
Secretary
       
   
Address:
   
55 Madison Avenue
   
Morristown, NJ  07960
     
      CINEDIGM DIGITAL CINEMA CORP.
       
   
By:
/s/ Gary S. Loffredo
   
Name:
Gary S. Loffredo
   
Title:
General Counsel and Secretary
       
   
Address:
   
55 Madison Avenue
   
Morristown, NJ  07960
 
 
 
 
 
 
Signature Page to the Sale and Contribution Agreement

 
 
 
DEFINITIONS ANNEX
 
General .  The definitions and rules of construction set forth herein are intended for use in connection with the Sale and Contribution Agreement to which this Definitions Annex is attached and are made a part of such Sale and Contribution Agreement.
 
Defined Terms .  The following terms shall have the following meanings:
 
Applicable Law ” means all provisions of statutes, rules, regulations and orders of the United States of America, any state thereof or municipality therein or of any foreign governmental body or of any regulatory agency applicable to the Person in question, and all orders and decrees of all courts and arbitrators in proceedings or actions in which the Person in question is a party.
 
Business Day ” means any day that is not a Saturday, a Sunday or other day on which commercial banking institutions in the City of New York or in the State of New Jersey are authorized or obligated by law or executive order to be closed.
 
CDF2 Loan Documents ” means the CDF2 Loan Documents as defined in the Credit Agreement.
 
CHG ” means CHG as defined in the Credit Agreement.
 
CHG Lease Facility Documents ” means the CHG Lease Facility Documents as defined in the Credit Agreement.
 
Collateral Agent ” means Société Générale, New York Branch, as Collateral Agent under the Credit Agreement and the Guaranty and Security Agreement (as defined in the Credit Agreement), and any successor Collateral Agent under such agreements.
 
Collection Account ” means the Collection Account as defined in the Credit Agreement.
 
Collections ” means, without duplication, (i) virtual print fees paid to or for the benefit of the Parent and as assigned to the Seller in respect of the Digital Systems financed under the Credit Agreement and the CHG Lease Facility Documents, including, without limitation any such fees paid pursuant to the Digital Cinema Deployment Agreements with respect to such Digital Systems, (ii) any other payments to or for the benefit of the Parent and as assigned to the Seller in respect of the Digital Systems financed under the Credit Agreement and the CHG Lease Facility Documents under the Digital Cinema Deployment Agreements and (iii) any other payments to or for the benefit of the Seller the other Phase 2 Agreements.
 
Credit Agreement ” means that certain Credit Agreement dated as of October 18, 2011, among the Purchaser, as the Borrower, Société Générale, New York Branch, as Collateral Agent and Administrative Agent, and the lenders party thereto.
 
Digital Cinema Deployment Agreement ” means each Digital Cinema Deployment Agreement as defined in the Credit Agreement.
 
 
 
 

 
 
Digital Systems ” means the Digital Systems as defined in the Credit Agreement.
 
Dollars ” and “ $ ”means the lawful currency of the United States.
 
Exhibitor Agreement ” means each Exhibitor Agreement as defined in the Credit Agreement.
 
Governmental Authority ” means any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, or any court, in each case whether of the United States of America or any foreign jurisdiction.
 
Lien ” means any lien, security interest or other charge, encumbrance, or other type of preferential arrangement having the practical effect of a lien or security interest, of or on any assets or properties of any Person in favor of any other Person; provided , that in no event shall a license of other grant of rights to intellectual property or a license to use Digital Systems pursuant to a Exhibitor Agreement constitute a Lien.
 
Loan Documents ” means the Loan Documents as defined in the Credit Agreement.
 
Management Services Agreement ” means the Management Services Agreement as defined in the Credit Agreement.
 
Material Adverse Effect ” means with respect to any Person, any event that would individually or in the aggregate, reasonably be expected to have a material adverse effect on (x) the ability of such Person to perform its obligations under this Agreement, the Loan Documents, the CHG Lease Facility Documents or the CDF2 Loan Documents, (y) the rights and remedies of the other parties under this Agreement or (z) the Transferred Assets.
 
Multiparty Agreement ” means that certain Multiparty Agreement dated as October 18, 2011 by and among Purchaser, as Borrower, Parent, Seller, Cinedigm, CHG, Société Générale, New York Branch, as Senior Agent and Ballantyne Strong, Inc.
 
Parent ” has the meaning set forth in the preamble of this Agreement.
 
Permitted Lien ” means Permitted Lien as defined in the Credit Agreement.
 
Person ” means Person as defined in the Credit Agreement.
 
Phase 2 Agreements” means the Exhibitor Agreements, the Digital Cinema Deployment Agreements and the Supply Agreements.
 
Purchaser ” has the meaning set forth in the preamble of this Agreement.
 
Purchaser Indemnified Liabilities ” has the meaning specified in Article VIII of this Agreement.
 
 
 
 

 
 
Software License Agreements ” means (i) the Software License Agreement dated as of October 18, 2011 between Seller, Purchaser and Access Digital Media, Inc., and (ii) the Software License Agreement dated as of October 18, 2011 between Seller, Purchaser and Hollywood Software, Inc.
 
Solvent ” means Solvent as defined in the Credit Agreement.
 
 “ Supply Agreement ” means each Supply Agreement as defined in the Credit Agreement.
 
Transferred Assets ” means the Phase 2 Agreements set forth in Schedule 2.01 of this Agreement.
 
UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York, provided , however , that, in the event that, by reason of mandatory provisions of law, any of the attachment, perfection or priority of the Collateral Agent’s and the Secured Parties’ security interest in any Collateral under any Loan Document is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions of such Loan Document relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.
 
U.S. ” or “ United States ” means the United States of America.
 
 
 
 
 

 
 
SCHEDULE 2.01(A)
To the Sale and Contribution Agreement
Cinedigm Assets
 
Rights in and to Digital Cinema Deployment Agreements relating to Digital Systems financed (whether on or after the Initial Transfer Date) under the Credit Agreement and the CHG Lease Facility Documents:


1.     Digital Cinema Deployment Agreement, dated as of March 7, 2008, by and among Twentieth Century Fox Film Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Deployment Agreement dated February 25, 2009, and as further amended by Amendment No. 2 to Digital Cinema Deployment Agreement dated June 17, 2010.
 
2.     Digital Cinema Deployment Agreement, dated as of February 16, 2009, by and among Columbia Pictures Industries, Inc., Sony Pictures Releasing Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp., as amended and restated by First Amended and Restated Digital Cinema Deployment Agreement dated as of July 28, 2011, by and among Columbia Pictures Industries, Inc., Sony Pictures Releasing Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp.
 
3.     Digital Cinema Domestic Deployment Agreement, dated as of March 10, 2008, among Walt Disney Studios Motion Pictures, Access Digital Cinema Phase 2, Corp. and Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.), as amended by Amendment  No. 1 to Digital Cinema Domestic Deployment Agreement dated as of January 30, 2009, as further amended by Amendment  No. 2 to Digital Cinema Domestic Deployment Agreement dated as of May 21, 2010, as further amended by Amendment No. 3 to Digital Cinema Domestic Deployment Agreement dated as of September 14, 2010.
 
Together with all virtual print fees accrued with respect to such Digital Systems prior to the Initial Transfer Date.
 
 
 
 

 
 
SCHEDULE 2.01(B)
To the Sale and Contribution Agreement
Parent Assets

Rights in and to Digital Cinema Deployment Agreements relating to Digital Systems financed (whether on or after the Initial Transfer Date) under the Credit Agreement and the CHG Lease Facility Documents:

1.     Digital Cinema Deployment Agreement, dated as of March 7, 2008, by and among Twentieth Century Fox Film Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Deployment Agreement dated February 25, 2009, and as further amended by Amendment No. 2 to Digital Cinema Deployment Agreement dated June 17, 2010.
 
2.     Digital Cinema Deployment Agreement, dated as of March 10, 2008, by and between Paramount Pictures Corporation and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Deployment Agreement dated July 8, 2010.
 
3.     Digital Cinema Deployment Agreement, dated as of February 16, 2009, by and among Columbia Pictures Industries, Inc., Sony Pictures Releasing Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp., as amended and restated by First Amended and Restated Digital Cinema Deployment Agreement dated as of July 28, 2011, by and among Columbia Pictures Industries, Inc., Sony Pictures Releasing Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp.
 
4.     Digital Cinema Deployment Agreement, dated as of October 23, 2009, by and between Warner Bros. Entertainment Inc. and Access Digital Cinema Phase 2, Corp.
 
5.     Digital Cinema Screen Management Agreement, dated as of March 10, 2008, by and between Universal Film Exchanges LLLP and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Screen Management Agreement dated February 12, 2009, and as further amended by Amendment No. 2 to Digital Cinema Screen Management Agreement dated August 30, 2010, and as further amended by Amendment No. 3 to Digital Cinema Screen Management Agreement dated April 15, 2011.
 
6.     Digital Cinema Domestic Deployment Agreement, dated as of March 10, 2008, among Walt Disney Studios Motion Pictures, Access Digital Cinema Phase 2, Corp. and Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.), as amended by Amendment  No. 1 to Digital Cinema Domestic Deployment Agreement dated as of January 30, 2009, as further amended by Amendment  No. 2 to Digital Cinema Domestic Deployment Agreement dated as of May 21, 2010, as further amended by Amendment No. 3 to Digital Cinema Domestic Deployment Agreement dated as of September 14, 2010.
 
 
 

 
 
7.     Digital Cinema Deployment Agreement, dated as of October 13, 2008, by and between Lion’s Gate Films Inc. and Access Digital Cinema Phase 2, Corp.
 
8.     Digital Cinema Deployment Agreement, dated as of October 23, 2009, by and between Overture Films, LLC and Access Digital Cinema Phase 2, Corp.
 
Together with all virtual print fees accrued with respect to such Digital Systems prior to the Initial Transfer Date.
 
 
 
 

 
 
SCHEDULE 2.01(C)
To the Sale and Contribution Agreement
Transferred Assets

Digital Cinema Deployment Agreements

Rights in and to Digital Cinema Deployment Agreements relating to Digital Systems financed under the Credit Agreement and the CHG Lease Facility Documents:

1.     Digital Cinema Deployment Agreement, dated as of March 7, 2008, by and among Twentieth Century Fox Film Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Deployment Agreement dated February 25, 2009, and as further amended by Amendment No. 2 to Digital Cinema Deployment Agreement dated June 17, 2010.
 
2.     Digital Cinema Deployment Agreement, dated as of March 10, 2008, by and between Paramount Pictures Corporation and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Deployment Agreement dated July 8, 2010.
 
3.     Digital Cinema Deployment Agreement, dated as of February 16, 2009, by and among Columbia Pictures Industries, Inc., Sony Pictures Releasing Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp., as amended and restated by First Amended and Restated Digital Cinema Deployment Agreement dated as of July 28, 2011, by and among Columbia Pictures Industries, Inc., Sony Pictures Releasing Corporation, Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.) and Access Digital Cinema Phase 2, Corp.
 
4.     Digital Cinema Deployment Agreement, dated as of October 23, 2009, by and between Warner Bros. Entertainment Inc. and Access Digital Cinema Phase 2, Corp.
 
5.     Digital Cinema Screen Management Agreement, dated as of March 10, 2008, by and between Universal Film Exchanges LLLP and Access Digital Cinema Phase 2, Corp., as amended by Amendment No. 1 to Digital Cinema Screen Management Agreement dated February 12, 2009, and as further amended by Amendment No. 2 to Digital Cinema Screen Management Agreement dated August 30, 2010, and as further amended by Amendment No. 3 to Digital Cinema Screen Management Agreement dated April 15, 2011.
 
6.     Digital Cinema Domestic Deployment Agreement, dated as of March 10, 2008, among Walt Disney Studios Motion Pictures, Access Digital Cinema Phase 2, Corp. and Cinedigm Digital Cinema Corp. (f/k/a Access Integrated Technologies, Inc.), as amended by Amendment  No. 1 to Digital Cinema Domestic Deployment Agreement dated as of January 30, 2009, as further amended by Amendment  No. 2 to Digital Cinema Domestic Deployment Agreement dated as of May 21, 2010, as further amended by Amendment No. 3 to Digital Cinema Domestic Deployment Agreement dated as of September 14, 2010.
 
 
 
 

 
 
 
7.     Digital Cinema Deployment Agreement, dated as of October 13, 2008, by and between Lion’s Gate Films Inc. and Access Digital Cinema Phase 2, Corp.
 
8.     Digital Cinema Deployment Agreement, dated as of October 23, 2009, by and between Overture Films, LLC and Access Digital Cinema Phase 2, Corp.
 
Exhibitor Agreements
 
1.     Master License Agreement dated as of August 10, 2011 between CDF2 Holdings, LLC and Storyteller Theatres Corporation.
 
2.     Master License Agreement dated as of July 5, 2011 between CDF2 Holdings, LLC and Marcus Theatres Corporation.
 
3.     Master License Agreement dated as of August 17, 2011 between CDF2 Holdings, LLC and Dickinson Theatres, Inc., as amended and restated by Amended and Restated Master License Agreement dated as of September 28, 2011 between CDF2 Holdings, LLC and Dickinson Theatres, Inc.
 
4.     Master License Agreement dated as of July 11, 2011 between CDF2 Holdings, LLC and Meadville Cinema LP.
 
5.     Master License Agreement dated as of October 7, 2011 between CDF2 Holdings, LLC and Muller Family Theatres, LLC.
 
Supply Agreement
 
The Digital System Supply Agreement, dated as of August 16, 2011, between CDF2 Holdings, LLC and Ballantyne Strong, Inc., as amended by Amendment to Digital System Supply Agreement, dated as of October 14, 2011.
 
 
 
 
 

 
SCHEDULE 2.01(D)
To the Sale and Contribution Agreement
Borrowings

Purchaser Borrowings under the Credit Agreement to lend to CHG under that certain Non-Recourse Loan Agreement dated as of October 18, 2011 between CHG-MERIDIAN U.S. FINANCE, LTD, as Borrower and Cinedigm Digital Funding 2, LLC, as Lender.
EXHIBIT 99.1
 
 
 
CINEDIGM DIGITAL CINEMA CORP. ANNOUNCES CLOSING OF NON-RECOURSE FINANCING
 
$100 MILLION FACILITY TO IMMEDIATELY SUPPORT DIGITAL DEPLOYMENT FOR NEARLY 1,000 DIGITAL SCREENS, WITH OTHERS IN PIPELINE
 
Woodland Hills, CA, October 20, 2011 – Cinedigm Digital Cinema Corp.   (NASDAQ: CIDM), the global leader in digital cinema, today announced the closing of its previously announced non-recourse financing facility as well as the commitment to immediately deploy approximately 1,000 Cinedigm-Certified™ screens across four exhibitor partners.  The funding is provided by Cinedigm’s $77.5 million non-recourse financing facility with Joint Bookrunners Soci é t é G é n é rale Corporate and Investment Banking and Natixis Corporate and Investment Bank Americas and Joint Lead Arranger ING Capital, together with $23.0 million junior lease capital provided by CHG-MERIDIAN US Finance, Ltd.  The total facility size is $100.5 million.
 
Cinedigm can offer the non-recourse borrowing facility to exhibitors to provide a complete off-balance sheet financing solution for the conversion to digital systems.  Under the terms of the facility, Cinedigm will be the servicer for the billing and collection of virtual print fees (VPFs) revenues for the digital systems and will work closely with exhibitors, equipment vendors and the lenders to oversee the smooth deployment and the ongoing operations management of these digital systems.
 
Exhibitors who have executed license agreements with Cinedigm to participate in this financing facility thus far include:
 
·
Marcus Theatres for 628 screens
 
·
Muller Family Theatres for 65 screens
 
·
Dickinson Theatres for 187 screens
 
·
Storyteller Theatres for 56 screens
 
 
·
Total 936 screens
 
 
 
 

 
  “With only 11 months remaining before the end of our rollout period per our studio agreements, we are pleased to see more exhibitors finalizing their license agreements and rollout plans and especially taking advantage of the Cinedigm financing option,” said Gary Loffredo, President of Digital Cinema Services & General Counsel of Cinedigm.   “We are committed to continuing to do everything we can to ensure exhibitors have every opportunity to be included in the digital future.”
 
“Société Générale and Natixis continued commitment to Cinedigm’s non-recourse Phase Two facility and their ongoing commitments to our Phase One facility, is a strong vote of confidence in the digital cinema industry,” said Adam M. Mizel, Chief Operating Officer & CFO of Cinedigm. “By adding partners at CHG and ING, this new facility will provide a simple, turnkey solution for the many interested exhibitors seeking the significant advantages of digital cinema, including 3D movie releases and exciting alternative content offerings.”
 
“We are pleased to have successfully syndicated this facility, together with Joint Bookrunner and Syndication Agent, Natixis, and Documentation Agent, ING Capital,” echoed Richard Knowlton, Managing Director, Société Générale Corporate and Investment Banking.   “The strength of the digital cinema business model attracted lenders to oversubscribe the transaction in a challenging market.”
 
In the combined Phase One and Phase Two digital cinema deployment program, Cinedigm has:
 
·
Signed close to 9,800 screens overall
 
·
Installed over 8,000 digital screens
 
·
Signed 100 Cinema Buying Group exhibitors, representing close to 1,800 screens
 
·
Signed exhibitor buyer deals representing more than 4,000 screens
 
·
Signed Phase Two Cinedigm-financed deals representing just over 2,000 screens
 
About Cinedigm
 
Cinedigm offers a new business model to exhibitors by enabling theatres to present engaging alternative programming including live 2D and 3D sporting events and concerts, shorts, cartoons, live Q&As, as well as branded entertainment.  Recent releases by Cinedigm include the groundbreaking, LIVE 3D broadcast of The Foo Fighters performance, the worldwide LIVE 3D broadcast of the FIFA World Cup Championship, the BCS Championship in LIVE 3D, the Dave
 
 

 
Matthews Band 3D concerts, and the sold out 3D PHISH concerts. Cinedigm has also released the KIDTOONS series for the past six years, a weekly family friendly matinee series that runs in over 165 theatres across the country.  Cinedigm also provides a number of powerful software applications that enable exhibitors to enhance and streamline their daily operations.  Additionally, Cinedigm offers precision marketing tools to dramatically increase exhibitor marketing effectiveness, including social media initiatives, targeted advertising and strategic public relations.  Cinedigm™ and Cinedigm Digital Cinema Corp™ are trademarks of Cinedigm Digital Cinema Corp.  www.cinedigm.com  [CIDM-G]
 
For Cinedigm Digital Cinema:

Press Contact :
Maggie Begley
Office:  310-301-1785
Mobile:  310-749-3055
Maggie@mbcprinc.com

Investor Relations :
David Walke
646.728.2298
davidwalke1@gmail.com