AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT

Exhibit 10.41

AMENDMENT NO. 2
TO
SECURITIES PURCHASE AGREEMENT

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

R E C I T A L S

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“...(B) if to the Collateral Agent, to Union Bank of California, N.A., Entertainment Finance Group, 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000, Attention: Xxxx Xxx, Tel: 000.000.0000, Fax: 000.000.0000, with a copy to Akin Gump Xxxxxxx Xxxxx & Xxxx LLP, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000, Attention: P. Xxxx Xxxxx, Esq., Tel: 000.000.0000, Fax: 000.000.0000...”

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

“Section 11.19 Use of Name.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[signature pages follow]

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


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


	By:	/s/ Xxxx Xxxxxx
		Xxxx Xxxxxx, President & Chief Operating Officer


	THE FILM DEPARTMENT HOLDINGS LLC
	By:	/s/ Xxxx Xxxxxx
		Xxxx Xxxxxx, President & Chief Operating Officer


	TFD LITERARY ACQUISITIONS, LLC


	By:	THE FILM DEPARTMENT HOLDINGS LLC,
	its sole Member


	By:	/s/ Xxxx Xxxxxx
		Xxxx Xxxxxx, President & Chief Operating Officer

SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT
THE FILM DEPARTMENT LLC


ETON PARK CLO MANAGEMENT 1 By: Eton Park Asset Management, L.L.C, as Collateral Manager, as a Holder


By:	/s/ Xxxxxxxx Xxxxxx
	Name:	Xxxxxxxx Xxxxxx
	Its: Controller


ETON PARK CLO MANAGEMENT 2 By: Eton Park Asset Management, L.L.C., as Collateral Manager, as a Holder


By:	/s/ Xxxxxxxx Xxxxxx
	Name:	Xxxxxxxx Xxxxxx
	Its: Controller


ETON PARK MASTER FUND, LTD. By: Eton Park Capital Management, L.P., its investment manager, as a Holder


By:	/s/ Xxxxxxxx Xxxxxx
	Name:	Xxxxxxxx Xxxxxx
	Its: Controller


ETON PARK FUND, L.P. By: Eton Park Capital Management, L.P., its investment manager, as a Holder


By:	/s/ Xxxxxxxx Xxxxxx
	Name:	Xxxxxxxx Xxxxxx
	Its: Controller

SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT
THE FILM DEPARTMENT LLC


UNION BANK OF CALIFORNIA, N.A., as Collateral Agent
By:	/s/ Xxxx xxx
	Name:	Xxxx Xxx
	Its: Duly Authorized Signatory

SIGNATURE PAGE TO AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT
THE FILM DEPARTMENT LLC

AMENDED AND RESTATED
SCHEDULE II

COLLECTION ACCOUNT PAYMENT WATERFALL

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

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

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

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

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

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

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

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

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

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

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

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

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

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AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT

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