INTRODUCTORY STATEMENT

Exhibit 10.2

AMENDMENT NO. 17 dated as of June 29, 2010 (this “Amendment”) to the Credit, Security, Guaranty and Pledge Agreement dated as of August 31, 2001 as amended by Amendments 1 through 15 thereto, dated as of December 14, 2001, December 31, 2001, March 29, 2002, May 14, 2002, February 5, 2003, August 4, 2003, October 28, 2004, March 1, 2005, March 21, 2006, April 28, 2006, December 8, 2006, March 2, 2007, July 27, 2007, March 10, 2008, March 2, 2009 and March 2, 2010, among Crown Media Holdings, Inc. (the “Borrower”), the Guarantors named therein, the Lenders referred to therein and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Administrative Agent and as Issuing Bank for the Lenders (the “Agent”) (as the same may be further amended, supplemented or otherwise modified, the “Credit Agreement”).

INTRODUCTORY STATEMENT

WHEREAS, the Lenders have made available to the Borrower a credit facility pursuant to the terms of the Credit Agreement;

WHEREAS, the Borrower intends to effectuate a recapitalization of its intercompany Indebtedness pursuant to a Master Recapitalization Agreement dated as of February 26, 2010 among Hallmark Cards, HCC and certain other parties pursuant to which, among other things, it is contemplated that various of the Borrowers’ Subordinated Debt to HCC and its Affiliates will be converted into reduced intercompany Indebtedness, common stock and preferred stock;

WHEREAS, in connection with a condition precedent to the effectiveness of the Recapitalization Agreement, the Borrower has requested that the Maturity Date of the Credit Agreement be extended from August 31, 2010 to June 30, 2011.

WHEREAS, the Administrative Agent and each of the Lenders have agreed to make certain modifications to the Credit Agreement in order to accommodate the items described in the preceding recitals.

NOW THEREFORE, the parties hereto hereby agree as follows:

Section 1.               Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meaning given them in the Credit Agreement.

Section 2.               Amendments to Credit Agreement.  Upon the Amendment Effective Date (as defined below):

(A)          the Credit Agreement is hereby amended by (i) inserting all of the words and/or provisions which appear with computerized underscoring in the document annexed hereto

as Exhibit A and (ii) deleting each of the words and/or provisions which appear with computerized strike-through in the document annexed hereto as Exhibit A (with the Credit Agreement as to be so amended reflecting the changes set forth on Exhibit A referred to herein as the “Revised Credit Agreement”).  It is understood and agreed that this Amendment and the marked document attached hereto as Exhibit A intentionally omit Section 4.1 and all of the pre-existing Exhibits to the Credit Agreement, which shall be unaffected by this Amendment;

(B)           Schedules 3.1, 3.6(a), 3.6(b), 3.7(a), 3.7(b), 3.8, 3.10, 3.11, 3.17, 3.18(a), 3.18(b), 3.18(c), 3.23, 3.25 and 8.3 of the Credit Agreement are hereby replaced with Schedules 3.1, 3.6(a), 3.6(b), 3.7(a), 3.7(b), 3.8, 3.10, 3.11, 3.17, 3.18(a), 3.18(b), 3.18(c), 3.23, 3.25 and 8.3, respectively, to this Amendment, which replacement schedules reflect the Equity Interests of the Credit Parties on a pro forma basis upon the consummation of the Recapitalization and the intercompany mergers contemplated in connection therewith;

(C)           The Hallmark Cards Subordination and Support Agreement is hereby terminated;

(D)          Notwithstanding anything to the contrary in the Credit Agreement, the Required Lenders consent to the merger of Hallmark Holdings and Hallmark Entertainment Investments Co. with and into the Borrower in connection with the Recapitalization (as defined in the Revised Credit Agreement);

(E)           An Exhibit T is hereby added to the Credit Agreement [“Recapitalized Debt Intercreditor Agreement”] in the form of Exhibit T to this Agreement, and the Table of Contents of the Credit Agreement is hereby updated as appropriate;

(F)           A Schedule 3.17B [“Material Affiliate Transactions”] is hereby added to the Credit Agreement in the form of Schedule 3.17B to this Amendment, and the Table of Contents of the Credit Agreement is hereby updated as appropriate.

Section 3.               Conditions to Effectiveness.  The effectiveness of this Amendment is subject to the satisfaction in full of each of the conditions precedent set forth below (the date on which all such conditions have been satisfied being herein called the “Amendment Effective Date”):

(A)          the Agent shall have received counterparts of this Amendment which, when taken together, bear the signatures of the Borrower, Hallmark Cards, each Guarantor and each of the Lenders;

(B)           the Agent shall have received for the account of the Lenders a fee of $25,000 in consideration for the extensions of the Maturity Date to be implemented hereunder;

(C)           the representations and warranties in Section 4 hereof shall be true on the Amendment Effective Date as if made on such date;

(D)          all legal matters incident to this Amendment shall be satisfactory to ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, counsel for the Agent;

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(E)           the Agent has received a fully-executed Recapitalized Debt Intercreditor Agreement in the form of Exhibit T to this Amendment;

(F)           the prior or simultaneous consummation of the Recapitalization on terms and conditions satisfactory to the Agent including that (i) criteria set forth under the definition of Recapitalization as set forth in the Revised Credit Agreement are satisfied in connection therewith, (ii) that each Recapitalization Credit Document (as defined in the Revised Credit Agreement) is satisfactory in form and substance to the Agent; and (iii) the Agent is satisfied with any and all liabilities of Hallmark Holdings and Hallmark Entertainment Investments Co., who are contemplated to be merged with and into the Borrower in connection with the consummation of the Recapitalization;

(G)           the Agent shall have received evidence satisfactory to it that Hallmark Cards and/or its Affiliates shall have, pursuant to documentation satisfactory to the Administrative Agent, extended through no earlier than the Maturity Date (as the same is being extended in the Revised Credit Agreement) the license agreement which provides the Borrower and its Subsidiaries with the right to use the “Hallmark” name and the “Crown” name in their respective television series or on or with respect to any channels owned or operated by the Borrower or any of its Subsidiaries; and

Section 4.               Representations and Warranties of the Credit Parties.  Each Credit Party represents and warrants that:

(A)          before and after giving effect to this Amendment, the representations and warranties contained in Section 3 of the Credit Agreement and in the other Fundamental Documents (including with respect to the accuracy of Schedules 3.6(a) and 3.6(b)) are true and correct in all material respects (except to the extent that any such representations and warranties specifically relate to an earlier date, in which case they shall be true and correct as of such earlier date, or changed circumstances specifically contemplated by, and allowed pursuant to, the Revised Credit Agreement) with the same effect as if made on and as of the date hereof;

(B)           before and after giving effect to this Amendment, no Event of Default or Default will have occurred and be continuing on and as of the date hereof; and

(C)           the Service Agreement referred to in Section 4.1(h) of the Credit Agreement has heretofore been terminated..

Section 5.               Acknowledgment re: Hallmark Cards Facility Guarantee.  By its execution of this Amendment, Hallmark Cards, in its capacity as guarantor under the Hallmark Cards Facility Guarantee, hereby acknowledges the extension of the Maturity Date which is being implemented under the Credit Agreement pursuant to this Amendment, and hereby acknowledges and agrees that the provisions of the Hallmark Cards Facility Guarantee shall be in full force and effect both prior and subsequent to the Amendment Effective Date, and regardless of whether any Change in Control (as defined in the Revised Credit Agreement) may occur subsequent to the date hereof.

Section 6.               Further Assurances.  At any time and from time to time, upon the Agent’s request and at the sole expense of the Credit Parties, each Credit Party will promptly and duly

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execute and deliver any and all further instruments and documents and take such further action as the Agent shall reasonably request.

Section 7.               Fundamental Documents.  This Amendment is designated a Fundamental Document by the Agent.

Section 8.               Full Force and Effect.  Except as expressly amended hereby, the Credit Agreement and the other Fundamental Documents shall continue in full force and effect in accordance with the provisions thereof on the date hereof.  As used in the Credit Agreement, the terms “Agreement”, “this Agreement”, “herein”,  “hereafter”, “hereto”, “hereof”, and words of similar import, shall, unless the context otherwise requires, mean the Credit Agreement as amended by this Amendment.

Section 9.               APPLICABLE LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 10.             Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument.

Section 11.             Expenses.  The Borrower agrees to pay all out-of-pocket expenses incurred by the Agent in connection with the preparation, execution and delivery of this Amendment, including, but not limited to, the reasonable fees and disbursements of counsel for the Agent.

Section 12.             Headings.  The headings of this Amendment are for the purposes of reference only and shall not affect the construction of or be taken into consideration in interpreting this Amendment.

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

[Signature Pages Follow]

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Signature Page to Amendment No. 17

Signature Page to Amendment No. 17

EXHIBIT A

to Amendment No. 17

FORM OF REVISED CREDIT AGREEMENT

[Please see attached]

HIGHLIGHTING CHANGES TO BE IMPLEMENTED

TO THE CREDIT AGREEMENT  (AS THE SAME HAD

PREVIOUSLY BEEN AMENDED THROUGH

AMENDMENT NO. 16 DATED AS OF MARCH 2, 2010) VIA

AMENDMENT NO. 17 DATED AS OF JUNE 29, 2010

CREDIT, SECURITY, GUARANTY AND PLEDGE AGREEMENT

Dated as of August 31, 2001

among

CROWN MEDIA HOLDINGS, INC.

as Borrower

and

ITS SUBSIDIARIES NAMED HEREIN

as Guarantors

and

THE LENDERS NAMED HEREIN

and

JPMORGAN CHASE

BANK, N.A.

(f/k/a THE CHASE MANHATTAN BANK)

as Administrative Agent and Issuing Bank

ii

TABLE OF CONTENTS

TABLE OF CONTENTS

(continued)

ii

TABLE OF CONTENTS

(continued)

iii

TABLE OF CONTENTS

(continued)

iv

TABLE OF CONTENTS

(continued)

v

TABLE OF CONTENTS

(continued)

vi

Schedules

Exhibits

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CREDIT, SECURITY, GUARANTY AND PLEDGE AGREEMENT, dated as of August 31, 2001 among (i) CROWN MEDIA HOLDINGS, INC., a Delaware corporation (the “Borrower”), (ii) the GUARANTORS which are parties hereto from time to time, (iii) the LENDERS which are parties hereto from time to time and (iv) JPMORGAN CHASE BANK, N.A., a national banking corporation (f/k/a THE CHASE MANHATTAN BANK), as Agent for the Lenders and as Issuing Bank.

INTRODUCTORY STATEMENT

All terms not otherwise defined above or in this Introductory Statement are as defined in Article 1 hereof, or as defined elsewhere herein.

The Borrower requested that the Lenders make available a $320,000,000 five-year secured credit facility consisting of a term loan of $100,000,000 and a revolving credit facility of up to $240,000,000 (or such lesser amount as is available based upon amounts actually committed) to be used (i) to pay HEDC for the acquisition of certain rights in the HEDC Library in an amount not to exceed $120,000,000 (or such lesser amount as represents the cash portion of the purchase price of the HEDC Library), (ii) to repay intercompany loans from Hallmark or HCC (subject to the limitations set forth herein), (iii) to fund the development, distribution, exploitation and acquisition of intellectual properties including feature films, television and video product and/or rights therein or thereto; (iv) for general working capital purposes, including acquisitions and the operation of the Borrower and its Subsidiaries; and (v) to fund the acquisition, distribution, marketing and other exploitation of movies-of-the-week, mini-series, cable, pay cable, first-run syndication, network and video programming.

To provide security for the repayment of the Loans and all other Obligations of the Credit Parties hereunder, the Credit Parties provided the following to the Agent, for the benefit of itself, the Issuing Bank and the Lenders: (i) a security interest from the Credit Parties in the Collateral pursuant to Article 8 hereof which will include (x) the material contracts of the Credit Parties, including but not limited to, Platform Agreements, and (y) all of the Credit Parties’ rights in copyrights, trademarks, tradenames and service marks; (ii) a guaranty from the Guarantors pursuant to Article 10 hereof; (iii) a pledge of the capital stock or other ownership interest of the Guarantors, pursuant to Article 11 hereof and (iv) a security interest from the Borrower in the Cash Collateral Account.

For the avoidance of doubt, (a) the term loans described above were repaid in their entirety on or prior to October 28, 2004 and the term loan commitments were permanently reduced to zero in connection with such repayment, (b) in connection with Amendment No. 16 dated as of March 2, 2010 to this Credit Agreement , the Total Commitments were reduced to $30,000,000 and (c) in connection with Amendment No. 17 (defined below), the Maturity Date has been extended to June 30, 2011.

The Borrower, Hallmark Cards, HCC and certain other parties have entered into a Master Recapitalization Agreement dated as of February 26, 2010 (the “Recapitalization Agreement”) pursuant to which, among other things, (a) all of Borrower’s existing Subordinated Debt to HCC and its Affiliates (excluding certain intercompany payables and amounts due under the Tax Sharing Agreement) is being converted into intercompany Indebtedness, common stock and preferred stock in accordance with the following parameters: (i) $315 million principal amount of Indebtedness of the Credit Parties will remain, with (a) $200 million of such Indebtedness constituting cash-pay interest-bearing obligations, with an interest rate not to exceed 9.5% per annum through December 31, 2011 and 12% thereafter (the “Term A Loan Recapitalized Debt”) and (b) $115 million of such Indebtedness constituting obligations on which (1) the applicable interest rate shall be a rate per annum equal to 11.5% through December 31, 2011, increasing to 14% thereafter and (2) interest through December 31, 2010 may be payable in kind by adding accrued interest to principal but which shall become cash-pay beginning on January 1, 2011 (the “Term B Loan Recapitalized Debt” and, together with the Term A Loan Recapitalized Debt, the “Recapitalized Debt”); (ii) the Recapitalized Debt will be evidenced by the Credit Agreement dated on or about the Amendment No. 17 Effective Date among Borrower as borrower, HCC as lender and each of the other “Credit Parties” from time to time party thereto (the “Recapitalization Credit Agreement”, and, together with any other documentation to be established in connection therewith, the “Recapitalization Credit Documents”); (iii) $185 million of such existing intercompany Indebtedness will be converted into convertible preferred stock of the Borrower (the “Series A Preferred Stock”); (iv) the remaining intercompany Subordinated Debt of the Credit Parties shall be converted into shares of class A common stock of the Borrower; and (v) two intermediate holding companies above the Borrower will be merged with and into the Borrower (the consummation of the transactions contemplated in the Recapitalization Agreement, as described above, is referred to herein as the “Recapitalization”).

Subject to the terms and conditions set forth herein, the Agent is willing to act as agent for the Lenders and each Lender is willing to make Loans to the Borrower and to participate in Letters of Credit in amounts in the aggregate at any one time outstanding not in excess of the Commitment of that Lender hereunder.

Accordingly, the parties hereto hereby agree as follows:

1.             DEFINITIONS

For the purposes hereof unless the context otherwise requires, the following terms shall have the meanings indicated, all accounting terms not otherwise defined herein shall have the respective meanings accorded to them under GAAP and all terms defined in the UCC and not otherwise defined herein shall have the respective meanings accorded to them therein.  Unless the content otherwise requires, any of the following terms may be used in the singular or the plural, depending on the reference:

“Affiliate” shall mean any Person which directly or indirectly holds a controlling interest in, is controlled by, or is under common control with, another Person.  For purposes of this definition, a Person shall be deemed to be “controlled by” another Person if such latter Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such controlled Person whether by contract or otherwise.

“Agent” and “Administrative Agent” shall mean JPMorgan Chase Bank, N.A. in its capacity as agent for the Lenders hereunder, and any successor agent appointed pursuant to Section 12.11 hereof.

“Agreement” and “Credit Agreement” shall mean this Credit, Security, Guaranty and Pledge Agreement, as it may be amended, supplemented or otherwise modified from time to time.

“Alternate Base Rate” shall mean for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect for such day plus ½ of 1% and (c) the LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%.  For purposes hereof, “Prime Rate” shall mean the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate in effect at its principal office in New York City.  “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.  If for any reason the Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Agent to obtain sufficient quotations in accordance with the terms hereof, the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the one-month LIBO Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate, the one-month LIBO Rate or the Federal Funds Effective Rate, respectively.

“Alternate Base Rate Loan” shall mean a Loan bearing interest based on the Alternate Base Rate in accordance with the provisions of Article 2 hereof.

“Amendment No. 12 Effective Date” shall mean the Amendment Effective Date, as such term is defined in that certain Amendment No. 12 dated as of March 2, 2007 to this Credit Agreement.

“Amendment No. 13” shall mean that certain Amendment No. 13 dated as of July 27, 2007 to this Credit Agreement.

“Amendment No. 15” shall mean that certain Amendment No. 15 dated as of March 2, 2009 to this Credit Agreement.

“Amendment No. 17” shall mean that certain Amendment No. 17 dated as of June     , 2010 to this Credit Agreement.

“Amendment No. 17 Effective Date” shall mean the Amendment Effective Date (as defined in Amendment No. 17).

“Applicable Law” shall mean all provisions of statutes, rules, regulations and orders of governmental bodies or regulatory agencies applicable to a Person, and all orders and decrees of all courts and arbitrators in proceedings or actions in which the Person in question is a party.

“Applicable Margin” shall mean (i) in the case of Alternative Base Rate Loans, 1.25% per annum and (ii) in the case of Eurodollar Loans 2.25% per annum.

“Assessment Rate” shall mean, for any date, the net annual assessment rate (rounded upwards, if necessary, to the next higher 1/100 of 1%) as most recently estimated by the Agent for determining the then current net annual assessment rate that will be employed in determining amounts payable by The Chase Manhattan Bank to the Federal Deposit Insurance Corporation (or any successor) for insurance by such Corporation (or such successor) of time deposits made in dollars at The Chase Manhattan Bank’s domestic offices.

“Assignment and Acceptance” shall mean an agreement substantially in the form of Exhibit H hereto, executed by the assignor, assignee and other parties as contemplated thereby.

“Authorized Officer” shall mean, with respect to any Person, its chief executive officer, chief operating officer or chief financial officer.

“Bankruptcy Code” shall mean the Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, as codified at 11 U.S.C. 101 et seq.

“Board” shall mean the Board of Governors of the Federal Reserve System of the United States of America.

“Borrowing” shall mean a group of Loans of a single Interest Rate Type and as to which a single Interest Period is in effect on any given day.

“Borrowing Certificate” shall be as defined in Section 4.2(d).

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks in The City of New York or the City of Los Angeles are permitted to close; provided, however, that when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits on the London interbank market.

“Capital Expenditures” shall mean, with respect to any Person for any period,  the sum of (i) the aggregate of all expenditures (whether paid in cash or accrued as a liability) by such Person during that period which, in accordance with GAAP, are or should be included in

“additions to property, plant or equipment” or similar items included in cash flows (including Capital Leases) and (ii) to the extent not covered by clause (i) hereof, the aggregate of all expenditures properly capitalized in accordance with GAAP by such Person to acquire, by purchase or otherwise, the business, property or fixed assets of, or stock or other evidence of beneficial ownership of, any other Person (other than the portion of such expenditures allocable in accordance with GAAP to net current assets or which is allocable to the acquisition of items of Product).

“Capital Lease”, as applied to any Person, shall mean any lease of any property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.

“Cash Collateral Account” shall be as defined in Section 9.1 hereof.

“Cash Equivalents” shall mean (i) marketable securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (ii) time deposits, demand deposits, certificates of deposit, acceptances or prime commercial paper or repurchase obligations for underlying securities of the types described in clause (i) entered into with any Lender or any commercial bank organized under the laws of the United States or a state thereof having a short-term deposit rating at the time of acquisition of at least A-2 or the equivalent thereof by Standard & Poor’s Ratings Services or at least P-2 or the equivalent thereof by ▇▇▇▇▇’▇ Investors Service, Inc., (iii) commercial paper issued by a Lender or the parent of a Lender with a rating at the time of acquisition of A-1 or A-2 or the equivalent thereof by Standard & Poor’s Ratings Services or P-1 or P-2 or the equivalent thereof by ▇▇▇▇▇’▇ Investors Service, Inc. and in each case maturing within twelve months after the date of acquisition, (iv) repurchase agreements and reverse repurchase agreements with any Lender or any Affiliate of any Lender relating to marketable direct obligations issued or unconditionally backed by the full faith and credit of the United States, in each case maturing within one year from the date thereof and (v) marketable direct obligations issued by any state of the United States or any agency or instrumentality thereof maturing within twelve months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings generally obtainable from either Standard & Poor’s Ratings Services or ▇▇▇▇▇’▇ Investors Service, Inc.

“Change in Control” shall mean (a) Hallmark Cards shall cease to own (directly or indirectly) at least 80% of the Equity Interests of the Borrower, (b) Hallmark Cards shall cease to have (i) sufficient voting power to elect a majority of the Borrower’s Board of Directors or (ii) beneficial ownership over a majority of the issued and outstanding Equity Interests of the Borrower having voting power or (c) the

consummation by the Borrower of any transaction that would constitute a “Rule 13e-3 transaction” as defined in the Exchange Act.

“Charge Over Shares” shall mean a charge over shares to be delivered by the Borrower in favor of the Agent, in form and substance satisfactory to the Agent; it being understood that the Charge Over Shares was terminated and released in connection with the consummation of the Foreign Asset Sale.

“Clearing Account” shall mean the account of the Borrower maintained at the office of the Agent at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, designated as the “Crown Media, Inc. - Clearing Account”, Account No. 323224679.

“Closing Date” shall mean the date on which the conditions precedent set forth in Section 4.1 have been satisfied or waived, which occurred on or about August 31, 2001.

“CM Intermediary” shall mean CM Intermediary, LLC, a Delaware limited liability company.

“Code” shall mean the Internal Revenue Code of 1986 and the rules and regulations issued thereunder, as heretofore and hereafter amended, as codified at 26 U.S.C. et seq., or any successor provision thereto.

“Collateral” shall mean with respect to each Credit Party, all of such Credit Party’s right, title and interest in and to all personal property, tangible and intangible, wherever located or situated and whether now owned, presently existing or hereafter acquired or created, including, but not limited to, all goods, accounts, instruments, intercompany obligations, contract rights, partnership and joint venture interests, documents, chattel paper, general intangibles, goodwill, equipment, machinery, inventory, investment property, copyrights, trademarks (other than any rights which such Credit Party may have in and to the “Hallmark” and “Odyssey” trademarks), trade names, insurance proceeds, cash, deposit accounts and the Pledged Securities, and any proceeds thereof, products thereof or income therefrom, further including, but not limited to, all of such Credit Party’s right, title and interest in and to each and every item and type of Product, the scenario, screenplay or script upon which an item of Product is based, all of the properties thereof, tangible and intangible, and all domestic and foreign copyrights and all other rights therein and thereto, of every kind and character, whether now in existence or hereafter to be made or produced, and whether or not in possession of such Credit Party, including with respect to each and every item of Product and without limiting the foregoing language, each and all of the following particular rights and properties (to the extent they are now owned or hereafter owned by such Credit Party):

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

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

and all other literary material upon which such item of Product is based or from which it is adapted;

(iii)          all motion picture rights in and to all music and musical compositions used and to be used in such item of Product, if any, including, each without limitation, all rights to record, rerecord, produce, reproduce or synchronize all of said music and musical compositions in and in connection with motion pictures;

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

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

(vi)          all statutory copyrights, domestic and foreign, obtained or to be obtained on such item of Product, together with any and all copyrights obtained or to be obtained in connection with such item of Product or any underlying or component elements of such item of Product, including, in each case without limitation, all copyrights on the property described in subparagraphs (i) through (v) inclusive, of this definition, together with the right to copyright (and all rights to renew or extend such copyrights) and the right to ▇▇▇ in the name of any of the Credit Parties for past, present and future infringements of copyright;

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

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

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

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

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

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

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

(xiv)        any and all “general intangibles” (as that term is defined in the UCC) not elsewhere included in this definition, including, without limitation, any and all general intangibles consisting of any right to payment which may arise in connection with the distribution or exploitation of any of the rights set out herein, and any and all general intangible rights in favor of such Credit Party for services or other performances by any third parties, including actors, writers, directors, individual producers and/or any and all other performing or nonperforming artists in any way connected with such item of Product, any and all general intangible rights in favor of such Credit Party relating to licenses of sound or other equipment, or licenses for any photograph or photographic or other processes, and any and all general intangibles related to the distribution or exploitation of such item of Product including general

intangibles related to or which grow out of the exhibition of such item of Product and the exploitation of any and all other rights in such item of Product set out in this definition;

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

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

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

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

(xix)         any and all rights of such Credit Party under any License Agreements or Platform Agreements relating to such item of Product; and

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

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

“Commitment” shall mean, collectively, the Term Loan Commitment and the Revolving Loan Commitment of each Lender.

“Commitment Fees” shall have the meaning given such term in Section 2.7 hereof.

“Commitment Termination Date” shall mean the earlier to occur of (i) June 30, 2011 and (ii) such earlier date on which the Total Commitment shall terminate in accordance with Section 2.8(a) or Article 7 hereof.

“Consolidated Net Income” shall mean, for any period for which such amount is being determined, the consolidated net income of such Person for such period in accordance with GAAP.

“Consolidated Subsidiaries” shall mean, for any Person, all subsidiaries of such Person which are required or permitted to be consolidated with such Person for financial reporting purposes in accordance with GAAP.

“Contribution Agreement” shall mean the Contribution Agreement substantially in the form of Exhibit I hereto to be entered into by the Guarantors, as such Contribution Agreement may be amended, supplemented or otherwise modified from time to time.

“Controlled Foreign Corporation” shall mean a Subsidiary of the Borrower which is a “controlled foreign corporation” as defined in Section 957(a) of the Code or any successor provision thereto.

“Copyright Security Agreement” shall mean the Copyright Security Agreement, substantially in the form of Exhibit B-1 hereto, as the same may be amended or supplemented from time to time by delivery of a Copyright Security Agreement Supplement or otherwise.

“Copyright Security Agreement Supplement” shall mean a Supplement to the Copyright Security Agreement substantially in the form of Exhibit B-2 hereto.

“Credit Exposure” shall mean, without duplication, with respect to any Lender, the sum of such Lender’s (i) aggregate outstanding Loans hereunder and (ii) Pro Rata Share of the then current L/C Exposure.

“Credit Parties” shall mean the Borrower and the Guarantors.

“Crown Media US” shall mean Crown Media United States, LLC, a Delaware limited liability company.

“Currency Agreement” shall mean any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement designed to protect the Borrower against fluctuations in currency values.

“Debenture” shall mean a debenture to be delivered by any U.K. Credit Party in favor of the Agent, in form and substance satisfactory to the Agent; it being understood that the Debenture(s) was terminated and released in connection with the consummation of the Foreign Asset Sale.

“Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

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

“Environmental Laws” shall mean any and all federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of any Governmental Authority regulating, relating to, or imposing liability or standards of conduct concerning, any Hazardous Material or environmental protection or health and safety, as now or at any time hereafter in effect, including without limitation, the Clean Water Act also known as the Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C. § 1251 et seq., the Clean Air Act (“CAA”), 42 U.S.C. §§ 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”), 7 U.S.C. §§ 136 et seq., the Surface Mining Control and Reclamation Act (“SMCRA”), 30 U.S.C. §§ 1201 et seq., the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq., the Superfund Amendments and Reauthorization Act of 1986 (“▇▇▇▇”), Public Law 99-499, 100 Stat. 1613, the Emergency Planning and Community Right to Know Act (“EPCRA”), 42 U.S.C. § 11001 et seq., the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq., the Occupational Safety and Health Act as amended (“OSHA”), 29 U.S.C. § 655 and § 657, and other such laws relating to the storage, transportation, treatment and disposal of Hazardous Materials into the air, surface water, ground water, land surface, subsurface strata or any building or structure and, together, in each case, with any amendment thereto, and the regulations adopted pursuant thereto.

“Equity Interest” shall mean shares of the capital stock, partnership interests, membership interest in a limited liability company, beneficial interests in a trust or other equity interests in any Person or any warrants, options or other rights to acquire such interests.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as heretofore and hereafter amended, as codified at 29 U.S.C. § 1001 et seq., and the regulations promulgated thereunder.

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

“Eurodollar Loan” shall mean a Loan bearing interest based on the LIBO Rate in accordance with the provisions of Article 2 hereof.

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

“Executive Officer” shall mean, with respect to any Person, its chief executive officer, chief operating officer, chief financial officer or executive or senior vice president.

“Existing Agreement” shall mean the Amended and Restated Credit and Security Agreement dated as of August 31, 1995 as amended and restated as of October 16, 1998 among Hallmark, certain of its Subsidiaries, the lenders party thereto and the Agent.

“Fee Letter” shall mean the letter agreement dated June 27, 2001, between the Borrower and the Agent.

“Foreign Asset Sale” shall mean the sale by the Borrower of its foreign assets, including its foreign Platform Agreements, foreign subsidiaries and foreign distribution rights in its film library, as contemplated in Exhibit Q hereto, as approved by the Agent.

“Fundamental Documents” shall mean this Credit Agreement, the Notes, the Contribution Agreement, the Pledgeholder Agreements, the Laboratory Access Letters, the Copyright Security Agreement, the Copyright Security Agreement Supplements, the Trademark Security Agreement, UCC Financing Statements, the Recapitalized Debt Intercreditor Agreement, and any other ancillary agreement which is required to be or otherwise executed by such Credit Party and delivered to the Agent in connection with this Agreement and, in addition, with respect to the Borrower, the Notes.

“GAAP” shall mean generally accepted accounting principles in the United States of America consistently applied as in effect on the date hereof; provided, however, that if either the Required Lenders or the Borrower proposes that GAAP be modified as a result of any changes allowed by or in response to FASB releases or other authoritative pronouncements issued after the date hereof, the Required Lenders or the Borrower (as applicable) agree not to unreasonably withhold or delay their consent to any such proposal so long as such proposed modification would not affect the calculation of any of the financial covenants contained herein.

“Governmental Authority” shall mean any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, or any court, in each case whether of the United States or foreign.

“Granting Lender” has the meaning specified in Section 13.3.

“Guarantors” shall mean CM Intermediary, LLC, Crown Media United States, LLC, Citi Teevee, LLC, Doone City Pictures, LLC and any other Subsidiaries which hereafter are required to become signatories to this Agreement pursuant to Section 6.19 hereof.

“Guaranty” shall mean, as to any Person, any direct or indirect obligation of such Person guaranteeing or intended to guarantee any Indebtedness, Capital Lease, dividend or other monetary obligation (“primary obligation”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or (c) to purchase property, securities or services, in each case, primarily for the purpose of assuring the owner of any such primary obligation.  The amount of any Guaranty shall be deemed to be an amount equal to (x) the stated or determinable amount of the primary obligation in respect of which such Guaranty is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) or (y) the stated maximum liability under such Guaranty, whichever is less.

 “Hallmark Cards” shall mean Hallmark Cards, Incorporated, a Missouri corporation.

“Hallmark Cards Facility Guarantee” shall mean a guarantee agreement substantially in the form of Exhibit S hereto, as the same may be amended, supplemented, extended or replaced from time to time, which shall provide for a guarantee by Hallmark Cards in favor of the Agent (on behalf of itself, the Issuing Bank and the Lenders) of any and all Obligations from time to time outstanding hereunder.

 “Hallmark Cards Letter of Credit” shall mean the Letter of Credit issued by Credit Suisse First Boston or an Affiliate on behalf of HCC for the benefit of the Borrower, and substantially in the form of Exhibit L-1 hereto; it being understood that the Hallmark Cards Letter of Credit was terminated prior to the Amendment No. 17 Effective Date.

“Hallmark Cards Subordination and Support Agreement” shall mean the subordination and support agreement from Hallmark Cards substantially in the form of Exhibit K hereto, as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof; it being understood that the Hallmark Cards Subordination and Support Agreement was terminated on the Amendment No. 17 Effective Date in connection with the consummation of the Recapitalization.

“Hallmark Holdings” shall mean Hallmark Entertainment Holdings, Inc., a Delaware corporation which is an indirect wholly-owned subsidiary of Hallmark Cards that was merged with and into the Borrower in connection with the Recapitalization.

“Hallmark Inducement Agreement” shall mean the Hallmark Inducement Agreement substantially in the form of Exhibit O hereto, as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof; it being understood that the Hallmark Inducement Agreement was terminated prior to the Amendment No. 17 Effective Date.

“Hallmark L/C” shall mean an irrevocable letter of credit issued to the Agent by Citibank, N.A. in the amount of the Total Commitment as credit support for the Obligations of the Borrower, substantially in the form of Exhibit R hereto or a replacement irrevocable letter of credit issued to the Agent by JPMorgan Chase Bank, N.A. in substantially the form of Exhibit R-1 hereto; it being understood that the Hallmark L/C was cancelled in connection with the effectiveness of Amendment No. 15.

“Hallmark Purchase” shall have the meaning given such term in Section 13.3(l) hereof.

“Hallmark Subordinated Participation” shall have the meaning set forth in Section 14.1 hereof.

“Hazardous Materials” shall mean any flammable materials, explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, or similar materials defined as such in any Environmental Law.

“Hallmark Tax Note” shall mean that certain promissory note in favor of Hallmark Cards in the original principal amount of $33,082.019 in consideration for its obligations of repayments to Hallmark Cards arising under that certain Tax Sharing Agreement dated March 11, 2003 as a result of the disallowance by the Internal Revenue Service of the use of certain of Borrower’s losses for the calendar years 2003 and 2004; it being understood that the obligations under the Hallmark Tax Note were fully paid in December 2009.

“HCC” shall mean HC Crown Corp., a Delaware corporation.

“HCC Promissory Note” shall mean the promissory note dated as of August 31, 2001 among the Borrower, as borrower, Crown Media International, Inc. and Crown Media United States, LLC, as guarantors, and HCC, as lender; it being understood that the obligations under the HCC Promissory Note were converted into Recapitalized Debt and/or Equity Interests in connection with the consummation of the Recapitalization.

“HEDC” shall mean Hallmark Entertainment Distribution, LLC, a Delaware limited liability company, now known as RHI Entertainment Distribution, LLC, which ceased to be an Affiliate of the Borrower in January 2008.

“HEDC Library” shall mean the seven hundred two titles in which the Borrower is to obtain certain rights pursuant to the HEDC Purchase Agreement.

“HEDC License Agreements” shall mean (i) prior to the Closing Date, the Program License Agreement dated as of July 1, 1999 between HEDC and Crown Media and, subsequent to the Closing Date, the amended and restated version thereof substantially in the form of Exhibit M-1 hereto and (ii) prior to the Closing Date, the Program License Agreement dated as of November 13, 1998 between HEDC and Crown Media US and, subsequent to the Closing Date, the amended and restated version thereof substantially in the form of Exhibit M-2 hereto.

“HEDC Purchase Agreement” shall mean the Purchase and Sale Agreement dated as of April 10, 2001 between HEDC and the Borrower pursuant to which the Borrower is acquiring rights in the HEDC Library, a copy of which is attached hereto as Exhibit N.

“Indebtedness” shall mean (without double counting), at any time and with respect to any Person, (i) indebtedness of such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for the deferred purchase price of property or services purchased (other than amounts constituting trade payables (payable within 90 days) arising in the ordinary course of business); (ii) obligations of such Person in respect of letters of credit, acceptance facilities, or drafts or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (iii) obligations of such Person under Capital Leases; (iv) deferred payment obligations of such Person resulting from the adjudication or settlement of any litigation; (v) obligations of such Person under synthetic leases or financing leases (but not operating leases); and (vi) indebtedness of others of the type described in clauses (i), (ii), (iii), (iv) and (v) hereof which such Person has (a) directly or indirectly assumed or guaranteed in connection with a Guaranty or (b) secured by a Lien on the assets of such Person, whether or not such Person has assumed such indebtedness (provided, that if such Person has not assumed such indebtedness of another Person then the amount of indebtedness of such Person pursuant to this clause (vi) for purposes of this Credit Agreement shall be equal to the lesser of the amount of the indebtedness of the other Person and the fair market value of the assets of such Person which secure such other indebtedness).

“Initial Date” shall mean (i) in the case of the Agent and the Issuing Bank, the date hereof, (ii) in the case of each Lender which is an original party to this Credit Agreement, the date hereof and (iii) in the case of any other Lender, the effective date of the Assignment and Acceptance pursuant to which it became a Lender.

“Instrument of Assumption and Joinder” shall mean an Instrument of Assumption and Joinder substantially in the form of Exhibit J hereto.

“Interest Deficit” shall have the meaning given such term in Section 2.16 hereof.

“Interest Expense” shall mean, for any period in respect of the Borrower and its Subsidiaries, the sum of (a) the interest expense (including the interest component in respect of Capital Lease obligations), plus (b) all commitment fees, letter of credit fees, issuing bank fees, or similar fees paid by such Persons during such period in respect of any Indebtedness, plus (c) the net amounts paid by such Persons during such period in connection with any Interest Rate Protection Agreement, Currency Agreement or other hedging arrangement, plus (d) any dividends or similar amounts paid by such Persons during such period in respect of any preferred stock.

“Interest Payment Date” shall mean (i) as to any Eurodollar Loan having an Interest Period of one, two or three months, the last day of such Interest Period, (ii) as to any Eurodollar Loan having an Interest Period of at least six months, the last day of such Interest Period and, in addition, each date during such Interest Period that is an integral multiple of three months from the commencement of such Interest Period and (iii) with respect to Alternate Base Rate Loans, the last Business Day of each March, June, September and December (commencing the last Business Day of September 2001).

“Interest Period” shall mean as to any Eurodollar Loan, the period commencing on the date of such Loan or the last day of the preceding Interest Period and ending on the numerically corresponding day (or if there is no corresponding day, the last day) in the calendar month that is one, two, three, six or twelve months thereafter as the Borrower may elect; provided, however, that (i) if any Interest Period would end on a day which shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such next succeeding Business Day would fall in the next calendar month, in which case, such Interest Period shall end on the next preceding Business Day, (ii) no Interest Period may be selected which would end later than the Maturity Date, (iii) interest shall accrue from and including the first day of such Interest Period to but excluding the last date of such Interest Period and (iv) no Interest Period of six or twelve months may be selected unless such Interest Period is available from all of the Lenders.

“Interest Rate Protection Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, synthetic cap, collar or floor or other financial agreement or arrangement designed to protect a Credit Party against fluctuations in interest rates.

“Interest Rate Type” shall have the meaning given such term in Section 2.3 hereof.

“Investment” shall mean any stock, evidence of indebtedness or other security of any Person, any loan, advance, contribution of capital, extension of credit or commitment therefor (including, without limitation, the Guaranty of loans made to others, but excluding current trade and customer accounts receivable arising in the ordinary course of business and

payable in accordance with customary trading terms in the ordinary course of business), any purchase of (i) any security of another Person or (ii) any business or undertaking of any Person or any commitment to make any such purchase, or any other investment.

“Issuing Bank” shall mean (i) JPMorgan Chase Bank, N.A., a national banking association, in its capacity as such or (ii) such successor as may be appointed pursuant to Section 12.12 hereof.

“Junior Creditor” shall mean the holder of the Hallmark Subordinated Participation.

“Junior Obligations” shall mean the obligation of the Borrower to repay the principal of, and accrued interest on, the Hallmark Subordinated Participation.

“Laboratory” shall mean any laboratory acceptable to the Agent which is located in the United States and is a party to a Pledgeholder Agreement or a Laboratory Access Letter.

“Laboratory Access Letter” shall mean a letter agreement among (i) a Laboratory holding any elements of any Product to which any Credit Party has the right of access, (ii) such Credit Party and (iii) the Agent, substantially in the form of Exhibit F hereto or a form otherwise acceptable to the Agent.

“L/C Exposure” shall mean, at any time, the amount expressed in Dollars of the aggregate face amount of all drafts which may then or thereafter be presented by beneficiaries under all Letters of Credit then outstanding, plus (without duplication) the face amount of all drafts which have been presented or accepted under Letters of Credit but have not yet been paid or have been paid but not reimbursed, whether directly or from the proceeds of a Loan hereunder.

“Lender” and “Lenders” shall mean the financial institutions whose names appear at the foot hereof and any assignee of a Lender pursuant to Section 13.3(b).

“Lending Office” shall mean, with respect to any of the Lenders, the branch or branches (or affiliate or affiliates) from which any such Lender’s Eurodollar Loans or Alternate Base Rate Loans, as the case may be, are made or maintained and for the account of which all payments of principal of, and interest on, such Lender’s Eurodollar Loans or Alternate Base Rate Loans are made, as notified to the Agent from time to time.

“Letter of Credit” shall mean a letter of credit issued pursuant to Section 2.4.

 “LIBO Rate” shall mean, with respect to the Interest Period for a Eurodollar Loan (or, as applicable, for purposes of determining the Alternate Base Rate with respect to any Alternate Base Rate Loan), an interest rate per annum equal to the quotient (rounded upwards, if necessary to the next 1/100 of 1%) of (A) (i) the rate appearing on the Reuters BBA LIBOR Rates Page 3750 (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period or (ii) if the rate described in clause (A)(i) is not available on any relevant date of determination, the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, divided by (B) one minus the applicable statutory reserve requirements of the Agent, expressed as a decimal (including without duplication or limitation, basic, supplemental, marginal and emergency reserves), from time to time in effect under Regulation D or similar regulations of the Board of Governors of the Federal Reserve System.  It is agreed that for purposes of this definition, Eurodollar Loans made hereunder shall be deemed to constitute Eurocurrency Liabilities as defined in Regulation D and to be subject to the reserve requirements of Regulation D.

“License Agreements” shall mean any and all agreements entered into by any Credit Party pursuant to which such Credit Party acquires license rights in any item of Product (including the HEDC License Agreements).

“Lien” shall mean any mortgage, pledge, security interest, copyright mortgage, encumbrance, lien or charge of any kind whatsoever (including any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction).

“Limited Guarantee” shall mean a Limited Guarantee Agreement and Acknowledgment by Hallmark Cards in favor of the Agent substantially in the form attached hereto as Exhibit L, as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof it being understood that the Limited Guarantee was terminated prior to the Amendment No. 17 Effective Date.

“Loans” shall mean the Revolving Credit Loans and/or the Term Loans.

“Margin Stock” shall be as defined in Regulation U of the Board.

“Material Adverse Effect” shall mean any change or effect that (a) has a materially adverse effect on the business, assets, properties, operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole, (b) materially impairs the ability of any Credit Party to perform its respective obligations under the Fundamental Documents to which it is a party, (c) materially impairs the validity or enforceability of, or materially impairs the security interests, rights, remedies or benefits

available to the Agent or the Lenders under any of the Fundamental Documents; or (d) has a material adverse effect on the Collateral or the Pledged Securities taken as a whole.

“Maturity Date” shall mean June 30, 2011.

“Multiemployer Plan” shall mean a plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which any Credit Party or ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the five preceding plan years made or accrued an obligation to make contributions.

“Net Cash Proceeds” shall mean cash payments received in exchange for the issuance of any debt or equity security by any Credit Party net of commissions and other reasonable fees and expenses incurred, any taxes payable and reasonably estimated income taxes payable with respect to the fiscal year during which such issuance occurs, as a consequence of any repatriation of such cash payments.

 “Note” or “Notes” shall mean the Term Note(s) and/or the Revolving Credit Note(s).

“Obligations” shall mean the obligation of the Borrower to make due and punctual payment of (i) principal of and interest on the Loans, the Commitment Fees, any reimbursement obligations (current or contingent) in respect of Letters of Credit, costs and attorneys’ fees and all other monetary obligations of the Borrower to the Agent, the Issuing Bank or any Lender under this Agreement, the Notes, any other Fundamental Document or the Fee Letter, (ii) all amounts payable by the Borrower to any Lender under any Currency Agreement or Interest Rate Protection Agreement, provided that the Administrative Agent shall have received written notice thereof within ten (10) Business Days after execution of such Currency Agreement or Interest Rate Protection Agreement and (iii) amounts payable to any Lender or any of its Affiliates in connection with any bank account maintained by the Borrower or any other Credit Party at any Lender or any such Affiliate or any other banking services provided to the Borrower or any other Credit Party by any Lender or any such Affiliate.

 “PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

“Percentage” shall mean each Lender’s percentage share of the Total Commitment as set forth in the Schedule of Commitments opposite the name of such Lender in the column captioned “Percentage” (as the same may be modified pursuant to any Assignment and Acceptance to which such Lender is a party).

“Permitted Encumbrances” shall mean Liens permitted under Section 6.2 hereof.

“Person” shall mean any natural person, corporation, division of a corporation, partnership, trust, joint venture, association, company, estate, unincorporated organization or government or any agency or political subdivision thereof.

“Physical Materials” shall have the meaning given to such term in paragraph (iv) of the definition of “Collateral” herein.

“Plan” shall mean an employee benefit plan within the meaning of Section 3(3) of ERISA (other than a Multiemployer Plan) which is maintained or contributed to by any Credit Party or any ERISA Affiliates, or with respect to which any Credit Party could otherwise have any liability.

“Platform Agreements” shall mean any and all agreements entered into by a Credit Party with a television distributor pursuant to which the television distributor agrees to deliver channels owned by a Credit Party to subscribers in exchange for a fee.

“Pledged Collateral” shall mean the Pledged Securities and any proceeds (as defined in Section 9-102(a)(64) of the UCC) of the Pledged Securities.

“Pledged Securities” shall mean all of the issued and outstanding capital stock or other equity interests of each of the Guarantors directly or indirectly owned by the Borrower (other than any Controlled Foreign Corporation which the Borrower has elected to pledge only 65% of the stock of such Controlled Foreign Corporation) and all other equity securities or interests now owned or hereafter acquired by any of the Credit Parties, including without limitation the securities listed in Schedule 3.6(a) hereto.

“Pledgeholder Agreement” shall mean a Laboratory Pledgeholder Agreement among a Credit Party, the Agent, and one or more Laboratories located within the continental United States, substantially in the form of Exhibit C hereto, or in such other form as shall be acceptable to the Agent.

“Pledgor” shall mean those Credit Parties that own any Pledged Securities.

“Prepayment Date” shall have the meaning given to such term in Section 2.11(h) hereof.

“Product” shall mean any movie-of-the-week, episode of a television series, mini-series, motion picture, film, videotape or other program produced for television release or for release in any other medium, shown on network, free, cable, pay and/or other television medium (including without limitation first run syndication) in each case whether recorded on film, videotape, cassette, cartridge, disc or on or by any other means, method, process or device whether now known or hereafter developed.  The term “Product” shall include, without limitation, the scenario, screenplay or script upon which such item of Product is based, all of the properties thereof, tangible and intangible, and whether now in existence or hereafter to be made or produced, whether or not in possession of any of the Credit Parties, and all rights therein and thereto, of every kind and character.

“Pro Rata Share” shall mean with respect to any Obligation or other amount, each Lender’s pro rata share of such Obligation or other amount determined in accordance with each Lender’s Percentage.

“Purchase Price” shall have the meaning given such term in Section 13.3(l) hereof.

“Recapitalization” shall have the meaning set forth in the Introductory Statement.

“Recapitalization Agreement” shall have the meaning set forth in the Introductory Statement.

“Recapitalization Credit Agreement” shall have the meaning set forth in the Introductory Statement.

“Recapitalization Credit Documents” shall have the meaning set forth in the Introductory Statement, and shall include, without limitation, the Recapitalization Credit Agreement and any other Fundamental Document referred to therein.

“Recapitalized Debt Intercreditor Agreement” shall mean the intercreditor agreement between [HCC] and the Agent in the form of Exhibit T hereto, as amended, supplemented or otherwise modified in accordance with the terms hereof.

“Recapitalized Debt” shall have the meaning set forth in the Introductory Statement.

“Redeemable Stock” shall mean any equity interest of the Borrower or any of its Consolidated Subsidiaries that by its terms or otherwise is required to be redeemed or is redeemable at the option of the holder thereof or of any third party other than the Borrower or one of its Consolidated Subsidiaries.

“Regulation D”, “Regulation T”, “Regulation U” and “Regulation X” shall mean such regulation of the Board.

 “Reportable Event” shall mean any reportable event as described in Section 4043(c) of ERISA, other than a reportable event as to which provision for 30-day notice to the PBGC would be waived under applicable regulations had the regulations in effect on the Closing Date been in effect on the date of occurrence of such reportable event.

“Required Lenders” shall mean (i) the Lenders holding at least 51% of the outstanding Credit Exposure or (ii) if at the time there is zero Credit Exposure, the Lenders holding at least 51% of the Total Commitment.

“Restricted Payment” shall mean (i) any distribution, dividend or other direct or indirect payment on account of any Equity Interest in a Credit Party or an Affiliate (including without limitation any Equity Interest issued in connection with the Recapitalization), in each case whether now or hereafter outstanding; (ii) any redemption or other acquisition or re-acquisition by a Credit Party of any Equity Interest in a Credit Party or an Affiliate (including without limitation any Equity Interest issued in connection with the Recapitalization), in each case whether now or hereafter outstanding; (iii) any payment by a Credit Party of principal of, premium or liquidated damages, if any, interest on, fees in relation to, or any redemption, purchase, retirement, defeasance, sinking fund, or any other payment with respect to, any Subordinated Debt or any Recapitalized Debt; and (v) any other payment (whether in cash or in kind) to Hallmark Cards, HCC or any Affiliate thereof

“Revolving Credit Commitment” shall mean the commitment of each Lender to make Revolving Credit Loans to the Borrower and to participate in Letters of Credit from the Initial Date applicable to such Lender through the Commitment Termination Date up to an aggregate amount, at any one time, not in excess of the amount set forth (i) opposite its name under the column entitled “Revolving Credit Commitment” in the Schedule of Commitments appearing in Schedule 1, or (ii) in any applicable Assignment and Acceptance(s) to which it may be a party, as the case may be, as such amount may be reduced from time to time in accordance with the terms of this Credit Agreement.

“Revolving Credit Loans” shall mean the loans made hereunder in accordance with the provisions of Section 2.1(a) or 2.1(b), whether made as a Eurodollar Loan or an Alternate Base Rate Loan, as permitted hereby.

“Revolving Credit Notes” shall have the meaning given such term in Section 2.5(a) hereof.

 “S.E.C.” shall mean the Securities and Exchange Commission or any successor thereto.

“Sale/Leaseback Powers of Attorney” shall mean powers of attorney executed by HEDC appointing the Borrower as its attorney-in-fact in connection with each sale/leaseback transaction to which HEDC or any of its predecessors in interest is a party, each substantially in the form of Exhibit P hereto.

“SPC” has the meaning specified in Section 13.3.

“Senior Obligations” shall mean all Obligations other than the Junior Obligations.

“Series A Preferred Stock” shall have the meaning set forth in the Introductory Statement.

“Subordinated Debt” or “Subordinated Indebtedness” shall mean all Indebtedness or other obligations of the Borrower subordinated to the Obligations pursuant to written agreements, containing interest rates, payment terms, maturities, amortization schedules, covenants, defaults, remedies, subordination provisions and other material terms in form and substance satisfactory to the Agent and the Required Lenders in their sole discretion.

“Subscriber” shall mean any Person or location that receives a channel owned or operated by a Credit Party either directly from a pay television distributor party to a Platform Agreement or from cable operators to whom such pay television distributors sublicense the right to distribute such channel.

“Subsidiary” shall mean with respect to any Person, any corporation, association, joint venture, partnership, limited liability company or other business entity (whether now existing or hereafter organized) of which at least a majority of the voting stock or other ownership interests having ordinary voting power for the election of directors (or the equivalent) is, at the time as of which any determination is being made, owned or controlled by such Person or one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such Person.

  “Tax Sharing Agreement” shall mean the Federal Income Tax Sharing Agreement dated as of March 11, 2003 between the Borrower and Hallmark Cards, as amended.

“Term A Loan Recapitalized Debt” shall have the meaning set forth in the Introductory Statement.

“Term B Loan Recapitalized Debt” shall have the meaning set forth in the Introductory Statement.

“Term Loan Commitment” shall mean the commitment of each Lender to make a Term Loan to the Borrower up to an aggregate amount not in excess of the amount set forth (i) opposite its name under the column entitled “Term Loan Commitment” in the Schedule of Commitments appearing in Schedule 1, or (ii) in any applicable Assignment and Acceptance(s) to which it may be a party, as the case may be, as such amount may be reduced from time to time in accordance with the terms of this Credit Agreement.  For the avoidance of doubt, the Term Loans were repaid in their entirety on or prior to October 28, 2004 and the Term Loan Commitments were permanently reduced to zero in connection with such repayment.

“Term Loans” shall mean the loans made hereunder in accordance with the provisions of Section 2.2(a).  For the avoidance of doubt, the Term Loans were repaid in their entirety on or prior to October 28, 2004.

“Term Notes” shall mean the promissory notes substantially in the form of Exhibit A-2 hereto which had been used to evidence the Term Loans.  For the avoidance of doubt, the Term Loans were repaid in their entirety on or prior to October 28, 2004.

“Total Commitment” shall mean the aggregate amount of the Commitments.

“Trademark Security Agreement” shall mean the Trademark Security Agreement substantially in the form of Exhibit E hereto, as the same may be amended or supplemented from time to time in accordance with the terms hereof.

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York on the date of execution of this Agreement.

2.             THE LOANS

SECTION 2.1.  Revolving Credit Loans.  (a)  Each Lender, severally and not jointly, agrees, upon the terms and subject to the conditions hereof, to make its Pro Rata Share of Revolving Credit Loans to the Borrower on any Business Day and from time to time from the Closing Date and prior to the Commitment Termination Date, each in an amount which when added to the aggregate principal amount of all Revolving Credit Loans then outstanding to the Borrower from such Lender and such Lender’s Pro Rata Share of the then-current L/C Exposure does not exceed such Lender’s Revolving Credit Commitment.

(b)           Subject to the terms hereof, the Borrower may borrow, repay and reborrow amounts constituting the Revolving Credit Commitments.

(c)           Subject to Section 2.2 hereof, the Loans shall be made at such times as the Borrower shall request, but the Lenders shall not be required to make Loans hereunder more often than once each calendar week.

(d)           Payments of the Revolving Credit Loans which are not made as a result of an optional or mandatory termination or reduction of the Revolving Credit Commitments shall not reduce the Revolving Credit Commitments.

SECTION 2.2.  Term Loans.  (a)  Each Lender, severally and not jointly, agrees, upon the terms and subject to the conditions hereof, to make its Pro Rata Share of the Term Loans to the Borrower on the Closing Date in a principal amount not exceeding the amount of such Lender’s Term Loan Commitment.

(b)           Once repaid, amounts constituting the Term Loan Commitments may not be reborrowed.  For the avoidance of doubt, the Term Loans were repaid in their entirety on or prior to October 28, 2004 and the Term Loan Commitments were permanently reduced to zero in connection with such repayment.

SECTION 2.3.  Making of Loans.  (a)  Each Loan shall be an Alternate Base Rate Loan or a Eurodollar Loan (each such type of Loan, an “Interest Rate Type”) as the Borrower may request subject to and in accordance with this Section.  The Borrower shall give the Agent prior written, facsimile or telephonic (promptly confirmed in writing) notice of (i) at least three Business Days for a Borrowing which is to consist of Eurodollar Loans and (ii) at least one Business Day for a Borrowing which is to consist of Alternate Base Rate Loans.  Each such notice in order to be effective must be received by the Agent not later than 1:00 p.m., New York City time, on the day required and shall specify the date (which shall be a Business Day) on which such Borrowing is to be made and the aggregate principal amount of the requested Borrowing.  Each such notice shall be irrevocable and shall specify whether the Borrowing then being requested is to consist of Alternate Base Rate Loans or Eurodollar Loans, and in the case of Eurodollar Loans, the Interest Period or Interest Periods with respect thereto.  If no election of an Interest Period is specified in such notice in the case of a Borrowing consisting of Eurodollar Loans, such notice shall be deemed to be a request for an Interest Period of one month.  If no election is made as to the Interest Rate Type of any Borrowing, such notice shall be deemed a request for a Borrowing consisting of Alternate Base Rate Loans.  No Borrowing shall consist of Eurodollar Loans if after giving effect thereto an aggregate of more than ten (10) separate Eurodollar Loans would be outstanding hereunder with respect to each Lender (determined in accordance with Section 2.10(c) hereof).

(b)           The Agent shall promptly notify each Lender of its proportionate share of each Borrowing under this Section, the date of such Borrowing, the Interest Rate Type of each Loan being requested and the Interest Period or Interest Periods applicable thereto.  On the borrowing date specified in such notice, each Lender shall make its share of the Borrowing available at the offices of The Chase Manhattan Bank, Loan and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:  ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, for credit to the Clearing Account no later than 1:00 p.m., New York City time, in Federal or other immediately available funds.  Upon receipt of any funds to be made available by the Lenders to fund any Borrowing hereunder, the Agent shall disburse such funds by depositing them into an account specified by the Borrower.

(c)           Each Lender may at its option fulfill its obligation to make Eurodollar Loans by causing a foreign branch or affiliate to fund such Eurodollar Loans, provided that any

exercise of such option shall not affect the obligation of the Borrower to repay the Loans in accordance with the terms hereof and of the Notes.  Subject to the other provisions of this Section, Loans of more than one type may be outstanding at the same time.

(d)           The amount of any Borrowing of new funds hereunder shall be in an aggregate principal amount of $500,000 for Alternate Base Rate Loans and $1,000,000 for Eurodollar Loans (or such lesser amount as shall equal the available but unused portion of the Revolving Credit Commitments) or such greater amount which is an integral multiple of $500,000.

SECTION 2.4.  Letters of Credit.  (a)  Upon the terms and subject to the conditions hereof, the Issuing Bank agrees, upon the request of the Borrower, to issue Letters of Credit, payable in Dollars from time to time after the Closing Date and prior to the 30th day prior to the Commitment Termination Date, provided that (i) the Borrower shall not request, and the Issuing Bank shall not issue, any Letter of Credit, if after giving effect thereto, (A) [intentionally omitted], (B) the sum of the then-current L/C Exposure plus the aggregate amount of all outstanding Revolving Credit Loans would exceed the Revolving Credit Commitment then in effect, or (C) the sum of the then-current L/C Exposure would exceed $20,000,000 and (ii) in no event shall the Issuing Bank be required to issue any Letter of Credit having an expiration date (x) later than the tenth Business Day prior to the Commitment Termination Date or (y) more than one year after its date of issuance.

(i)            Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby agrees to, have irrevocably purchased from the Issuing Bank a participation in such Letter of Credit in accordance with such Lender’s Percentage.

(ii)           Each Letter of Credit may, at the option of the Issuing Bank, provide that the Issuing Bank may (but shall not be required to) pay all or any part of the maximum amount which may at any time be available for drawing thereunder to the beneficiary thereof upon the occurrence or continuation of an Event of Default and the acceleration of the maturity of the Loans, provided that, if payment is not then due to the beneficiary, the Issuing Bank shall deposit the funds in question in a segregated account with the Issuing Bank to secure payment to the beneficiary and any funds so deposited shall be paid to the beneficiary of the Letter of Credit if conditions to such payment are satisfied or returned to the Issuing Bank for distribution to the Lenders (or, if all Obligations shall have been paid in full in cash, to the Borrower) if no payment to the beneficiary has been made and the final date available for drawings under the Letter of Credit has passed.  Each payment or deposit of funds by the Issuing Bank as provided in this paragraph shall be treated for all purposes of this Credit Agreement as a drawing duly honored by such Issuing Bank under the related Letter of Credit.

(b)           Whenever the Borrower desires the issuance of a Letter of Credit, it shall deliver to the Agent and the Issuing Bank a written notice no later than 1:00 p.m. (New York time) at least five Business Days prior to the proposed date of issuance.  That notice shall specify (i) the proposed date of issuance (which shall be a Business Day), (ii) the face amount of the Letter of Credit, (iii) the expiration date of the Letter of Credit and (iv) the name and address of the beneficiary.  Such notice shall be accompanied by a brief description of the underlying transaction and upon reasonable request of the Issuing Bank or the Agent, the Borrower shall

provide additional details regarding the underlying transaction.  Concurrently with the giving of written notice of a request for the issuance of a Letter of Credit, the Borrower shall provide a precise description of the documents and the verbatim text of any certificate to be presented by the beneficiary of such Letter of Credit which, if presented by such beneficiary prior to the expiration date of the Letter of Credit, would require the Issuing Bank to make payment under the Letter of Credit; provided, however, that the Issuing Bank, in its reasonable discretion, may require customary changes in any such documents and certificates to be presented by the beneficiary.  Upon issuance of each Letter of Credit, the Issuing Bank shall notify the Agent of the issuance of such Letter of Credit.  Promptly after receipt of such notice, the Agent shall notify each Lender of the issuance and the amount of such Lender’s respective participation in the applicable Letter of Credit.

(c)           The acceptance and payment of drafts under any Letter of Credit shall be made in accordance with the terms of such Letter of Credit and the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 500, as adopted or amended from time to time.  The Issuing Bank shall be entitled to honor any drafts and accept any documents presented to it by the beneficiary of such Letter of Credit in accordance with the terms of such Letter of Credit and believed by the Issuing Bank in good faith to be genuine.  Except as otherwise required by Applicable Law which cannot be waived, the Issuing Bank shall not have any duty to inquire as to the accuracy or authenticity of any draft or other drawing documents which may be presented to it, but shall be responsible only to determine in accordance with customary commercial practices that the documents which are required to be presented before payment or acceptance of a draft under any Letter of Credit have been delivered and that they comply on their face with the requirements of that Letter of Credit.

(d)           If the Issuing Bank shall make payment on any draft presented under a Letter of Credit (regardless of whether a Default, Event of Default or acceleration has occurred), the Issuing Bank shall give notice of such payment to the Borrower, the Agent and the Lenders and each Lender hereby authorizes and requests the Issuing Bank to advance for its account, pursuant to the terms hereof, its share of such payment based upon its participation in such Letter of Credit and agrees promptly to reimburse the Issuing Bank in immediately available funds for the Dollar equivalent of the amount so advanced on its behalf by the Issuing Bank.  If any such reimbursement is not made by any Lender in immediately available funds on the same day on which the Issuing Bank shall have made payment on any such draft, such Lender shall pay interest thereon to the Issuing Bank at a rate per annum equal to the Issuing Bank’s cost of obtaining overnight funds in the New York Federal Funds Market for the three (3) Business Days following the time such Lender fails to make the reimbursement and thereafter at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.

(e)           The Borrower is absolutely, unconditionally and irrevocably obligated to reimburse all amounts drawn under each Letter of Credit.  If any draft is presented under a Letter of Credit, the payment of which is required to be made at any time on or before the Commitment Termination Date, then payment by the Issuing Bank of such draft shall constitute an Alternate Base Rate Loan hereunder and interest shall accrue from the date the Issuing Bank makes payment on such draft under such Letter of Credit.  If any draft is presented under a Letter of Credit, the payment of which is required to be made after the Commitment Termination Date or at the time when an Event of Default or Default shall have occurred and then be continuing, then

the Borrower shall immediately pay to the Issuing Bank, in immediately available funds, the full amount of such draft together with interest thereon at a rate per annum of 2% in excess of the rate then in effect for Alternate Base Rate Loans from the date on which the Issuing Bank makes such payment of such draft until the date it receives full reimbursement for such payment from the Borrower.  The Borrower further agrees that the Issuing Bank may reimburse itself for such drawing, first, from amounts in the Clearing Account, second, from amounts in the Collection Account, and third, from the balance in any other account of the Borrower maintained with the Issuing Bank.

(f)            The Borrower shall pay the following amounts to the Issuing Bank for its own account with respect to Letters of Credit issued by it hereunder:

(A)          with respect to the issuance, amendment or transfer of each Letter of Credit and each drawing made thereunder, documentary and processing charges in accordance with the Issuing Bank’s standard schedule for such charges in effect at the time of such issuance, amendment, transfer or drawing, as the case may be; and

(B)           a fronting fee payable to the Issuing Bank equal to ¼ of 1% of the face amount of any Letter of Credit issued hereunder payable upon the issuance of such Letter of Credit.

(g)           The Borrower agrees to pay to the Agent for distribution to each Lender in respect of its L/C Exposure, such Lender’s Pro Rata Share of a commission (calculated on the basis of a 360-day year) equal to 3% per annum of the daily average L/C Exposure.  Such commission shall be due and payable in arrears on and through the last Business Day of each March, June, September and December (commencing the last Business Day of September, 2001) prior to the Commitment Termination Date or the expiration of the last outstanding Letter of Credit (whichever is later) and on the later of the Commitment Termination Date and the expiration of the last outstanding Letter of Credit.

(h)           Promptly upon receipt by the Issuing Bank or the Agent of any amount described in Section 2.4(g), or any amount described in Section 2.4(e) previously reimbursed to the Issuing Bank by the Lenders, the Issuing Bank or the Agent (as applicable) shall distribute to each Lender its Pro Rata Share of such amount.

(i)            [Intentionally omitted.]

(j)            If, at any time when an Event of Default shall have occurred and be continuing, any Letters of Credit shall remain outstanding, then the Issuing Bank may, and if directed by the Required Lenders shall, require the Borrower to deliver to the Issuing Bank Cash Equivalents in an amount equal to the full amount of the L/C Exposure or to furnish other security acceptable to the Required Lenders.  Any amounts so delivered pursuant to the preceding sentence shall be applied to reimburse the Issuing Bank for the amount of any drawings honored under Letters of Credit; provided, however, that if prior to the Maturity Date, (i) no Default or Event of Default is then continuing, then the Agent shall return all of such Cash Equivalents and collateral relating to such deposit to the Borrower if requested by it or (ii) Letters of Credit shall expire or be returned by the beneficiary so that the amount of the Cash

Equivalents delivered to the Agent hereunder shall exceed the then current L/C Exposure, then such excess shall first be applied to pay any Obligations then due under this Credit Agreement and the remainder shall be returned to the Borrower.

(k)           Notwithstanding the termination of the Commitments and the payment of the Loans, the obligations of the Borrower under this Section 2.4 shall remain in full force and effect until the Agent, the Issuing Bank and the Lenders shall have been irrevocably released from their obligations with regard to any and all Letters of Credit.

SECTION 2.5.  Notes; Repayment.  (a)  The Revolving Credit Loans made by each Lender hereunder shall be evidenced by a Revolving Credit promissory note substantially in the form of Exhibit A-1 hereto (each a “Revolving Credit Note” and collectively the “Revolving Credit Notes”) in the face amount of such Lender’s Revolving Credit Commitment, payable to the order of such Lender, duly executed by the Borrower and dated the date hereof.  The outstanding principal balance of each Revolving Credit Loan as evidenced by a Revolving Credit Note shall be payable in full on the Maturity Date, subject to acceleration as provided in Article 7.

(b)           [Intentionally omitted.]

(c)           Each of the Notes shall bear interest on the outstanding principal balance thereof as set forth in Section 2.6 hereof.  Each Lender and the Agent on its behalf is hereby authorized by the Borrower, but not obligated, to enter the amount of each Loan and the amount of each payment or prepayment of principal or interest thereon in the appropriate spaces on the reverse of or on an attachment to the Notes; provided, however, that the failure of any Lender or the Agent to set forth such Loans, principal payments or other information shall not in any manner affect the obligations of the Borrower to repay such Loans.

SECTION 2.6.  Interest on Loans.  (a)  In the case of a Eurodollar Loan, interest shall be payable at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the LIBO Rate plus the Applicable Margin for Eurodollar Loans.  Interest shall be payable on each Eurodollar Loan on each applicable Interest Payment Date, on the Maturity Date and on the date of a conversion of such Eurodollar Loan to an Alternate Base Rate Loan.  The Agent shall determine the applicable LIBO Rate for each Interest Period as soon as practicable on the date when such determination is to be made in respect of such Interest Period and shall notify the Borrower and the Lenders of the applicable interest rate so determined.  Such determination shall be conclusive absent manifest error.

(b)           In the case of an Alternate Base Rate Loan, interest shall be payable at a rate per annum (computed on the basis of the actual number of days elapsed over a year of

365/366 days, as the case may be, during such times as the Alternate Base Rate is based upon the Prime Rate, and over a year of 360 days at all other times) equal to the Alternate Base Rate plus the Applicable Margin for Alternate Base Rate Loans.  Interest shall be payable on each Alternate Base Rate Loan on each applicable Interest Payment Date and on the Maturity Date.

(c)           Anything in this Credit Agreement or the Notes to the contrary notwithstanding, the interest rate on the Loans or with respect to any drawing under a Letter of Credit shall in no event be in excess of the maximum permitted by Applicable Law.

SECTION 2.7.  Commitment Fees and Other Fees.  (a)  The Borrower agrees to pay to the Agent (for the account of each Lender in accordance with its Percentage) on the last Business Day of each March, June, September and December in each year (commencing on the last Business Day of September 2001) prior to the Commitment Termination Date and on the Commitment Termination Date, an aggregate fee (the “Commitment Fees”) of 0.375% per annum, computed on the basis of the actual number of days elapsed over a year of 360 days, on the average daily amount by which the aggregate amount of the Revolving Credit Commitments, as they may be reduced in accordance with the provisions of this Agreement, exceeds the sum of the principal balance of Revolving Credit Loans outstanding plus the L/C Exposure during the preceding period or quarter.  Such Commitment Fees shall commence to accrue on the date on which this Agreement is fully executed and shall cease to accrue on the Commitment Termination Date.

(b)           In addition, the Borrower agrees to pay to the Agent and/or the Lenders, as the case may be (without duplication) the various fees referred to in the Fee Letter.

SECTION 2.8.  Termination or Reduction of Revolving Credit Commitments.  (a)  Upon written, facsimile or telephonic (promptly confirmed in writing) notice to the Agent, which notice must be received by the Agent not later than 1:00 p.m. New York City time on the same Business Day, the Borrower may at any time permanently terminate the Revolving Credit Commitments in their entirety or from time to time permanently reduce the Revolving Credit Commitments in part.  Each such reduction shall be in a minimum aggregate amount of $5,000,000 (or such lesser amount as is the aggregate of the Revolving Credit Commitments) or such greater amount which is an integral multiple of $1,000,000; provided, however, that the Revolving Credit Commitments may not be reduced to an amount less than the sum of the aggregate principal balance of the Revolving Credit Loans then outstanding plus the L/C Exposure.

(b)           Simultaneously with each such termination or reduction of the Revolving Credit Commitments, the Borrower shall pay to the Agent for the account of the Lenders all accrued and unpaid Commitment Fees on the amount of the Revolving Credit Commitments so terminated or reduced through the date of such termination or reduction.

(c)           Any reduction of the Revolving Credit Commitments pursuant to this Section shall be made among the Lenders ratably in accordance with their respective Percentages.

(d)           [Intentionally omitted.]

SECTION 2.9.  Default Interest; Alternate Rate of Interest.  (a)  So long as an Event of Default shall have occurred and be continuing (after, as well as before a judgment), the Borrower shall on demand from time to time pay interest, to the extent permitted by Applicable Law, on any then unpaid amount of the Obligations at a rate per annum (i) for the remainder of the then current Interest Period for each Eurodollar Loan, equal to 2% in excess of the rate then in effect for such Eurodollar Loan and (ii) for all periods subsequent to the then current Interest Period for each Eurodollar Loan, for all Alternate Base Rate Loans and for all other overdue amounts hereunder, equal to 2% in excess of the rate then in effect for Alternate Base Rate Loans.

(b)           In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a Eurodollar Loan, (i) the Agent shall have received notice from any Lender of such Lender’s determination (which determination, absent manifest error, shall be conclusive) that Dollar deposits in the amount of the principal amount of such Eurodollar Loan are not generally available in the London interbank market or that the rate at which such Dollar deposits are being offered will not adequately and fairly reflect the cost to such Lender of making or maintaining the principal amount of such Eurodollar Loan during such Interest Period or (ii) the Agent shall have determined that reasonable means do not exist for ascertaining the applicable LIBO Rate, the Agent shall, as soon as practicable thereafter, give written or facsimile notice of such determination by such Lender or the Agent, as applicable, to the Borrower and the Lenders, and any request by the Borrower for a Borrowing of Eurodollar Loans (or conversion to or continuation as Eurodollar Loans pursuant to Section 2.10), made after receipt of such notice and until the circumstances giving rise to such notice no longer exist, shall be deemed a request for Alternate Base Rate Loans; provided, however, that in the circumstances described in clause (i) above such deemed request shall only apply to the affected Lender’s Loan.

SECTION 2.10.  Continuation and Conversion of Loans.  The continuation or conversion of any Loan pursuant to this Section 2.10 does not constitute a repayment and a reborrowing hereunder and is not subject to the conditions set forth in Section 4.2, and the designation of a Loan as an Alternate Base Rate Loan or Eurodollar Loan, and the designation of applicable Interest Periods, is merely a mechanism for determining the interest rate applicable to such Loan.

The Borrower shall have the right, at any time, (i) to convert any Eurodollar Loan or portion thereof to an Alternate Base Rate Loan or to continue such Eurodollar Loan for a successive Interest Period, or (ii) to convert any Alternate Base Rate Loan to a Eurodollar Loan, subject to the following:

(a)           the Borrower shall give the Agent prior written, facsimile or telephonic (promptly confirmed in writing) notice of each continuation or conversion hereunder of at least three (3) Business Days for each continuation or conversion hereunder; such notice shall be irrevocable and to be effective must be received by the Agent on the day required not later than 1:00 p.m., New York City time;

(b)           no Event of Default or Default shall have occurred and be continuing at the time of any conversion to a Eurodollar Loan or continuation of a Eurodollar Loan into a subsequent Interest Period;

(c)           no Alternate Base Rate Loan may be converted to a Eurodollar Loan and no Eurodollar Loan may be continued as a Eurodollar Loan if, after such conversion and after giving effect to any concurrent prepayment of Loans, an aggregate of more than ten (10) separate Eurodollar Loans would be outstanding hereunder with respect to each Lender (for purposes of determining the number of such Loans outstanding, Loans with different Interest Periods shall be counted as different Loans even if made on the same date);

(d)           if fewer than all Eurodollar Loans and Alternate Base Rate Loans at the time outstanding shall be continued or converted, such continuation or conversion shall be made pro rata among the Lenders in accordance with the respective principal amounts of the Loans held by the Lenders immediately prior to such continuation or conversion;

(e)           the aggregate principal amount of Loans continued as or converted to Eurodollar Loans as part of the same borrowing shall be $1,000,000 or such greater amount which is an integral multiple of $500,000;

(f)            accrued interest on any Eurodollar Loan (or portion thereof) being continued or converted shall be paid by the Borrower at the time of continuation or conversion;

(g)           the Interest Period with respect to a new Eurodollar Loan effected by a continuation or conversion shall commence on the date of such continuation or conversion;

(h)           if a Eurodollar Loan is converted to another type of Loan other than on the last day of the Interest Period with respect thereto, the amounts required by Section 2.11(b) shall be paid upon such conversion; and

(i)            each request for a continuation as or conversion to a Eurodollar Loan which fails to state an applicable Interest Period shall be deemed to be a request for an Interest Period of one month.

In the event that the Borrower shall not give notice to continue or convert any Eurodollar Loan as provided above, such Loan (unless repaid) shall automatically be (i) continued as a Eurodollar Loan with an Interest Period of one month or (ii) converted to an Alternate Base Rate Loan at the expiration of the then current Interest Period at the Agent’s discretion.  The Agent shall, after it receives notice from the Borrower, promptly give the Lenders notice of any continuation or conversion.

SECTION 2.11.  Prepayment of Loans; Reimbursement of Lenders.  (a)  Subject to the terms of paragraph (b) of this Section 2.11, the Borrower shall have the right at its option at any time and from time to time to prepay (i) the Alternate Base Rate Loans, in whole or in part, upon at least one Business Day’s written, facsimile or telephonic (promptly confirmed in writing) notice, in the principal amount of $500,000 or such greater amount which is an integral multiple of $500,000 and (ii) any Borrowings of Eurodollar Loans, in whole or in part, upon at least three Business Days’ written, facsimile or telephonic (promptly confirmed in writing) notice, in the principal amount of $1,000,000 or such greater amount which is an integral multiple of $500,000.  Each notice of prepayment shall specify the prepayment date, the Loans to be prepaid and the principal amount thereof, shall be irrevocable and shall commit the Borrower to prepay such Loans in the amount and on the date stated therein.  Such notice shall also specify the expected principal amount of Loans to be outstanding after giving effect to such prepayment.

(b)           The Borrower shall reimburse each Lender on demand for any loss incurred or to be incurred by it in the reemployment of the funds released (i) by any prepayment (for any reason) of any Eurodollar Loan if such Loan is repaid other than on the last day of the Interest Period for such Loan or (ii) in the event that after the Borrower delivers a notice of borrowing under Section 2.3(a) or continuation or conversion under Section 2.10(a) in respect of Eurodollar Loans, such Loan is not made, continued or converted on the first day of the Interest Period specified in such notice for any reason other than (I) a suspension or limitation under Section 2.9(b) of the right of the Borrower to select a Eurodollar Loan or (II) a breach by the Lenders of their obligation hereunder.  Such loss shall be the amount as reasonably determined by such Lender as the excess, if any, of (A) the amount of interest which would have accrued to such Lender on the amount so paid or not borrowed, continued or converted at a rate of interest equal to the interest rate applicable to such Loan pursuant to Section 2.6 hereof, for the period from the date of such payment or failure to borrow, continue or convert to the last day (x) in the case of a payment other than on the last day of the Interest Period for such Loan, of the then current Interest Period for such Loan or (y) in the case of such failure to borrow, continue or convert, of the Interest Period for such Loan which would have commenced on the date of such failure to borrow, continue or convert, over (B) the amount realized by such Lender in reemploying the funds not advanced or the funds received in prepayment or realized from the Loan so continued or converted during the period referred to above.  Each Lender shall deliver to the Borrower from time to time one or more certificates setting forth the amount of such loss (and in reasonable detail the manner of computation thereof) as determined by such Lender, which certificates shall be conclusive absent manifest error.

(c)           In the event the Borrower fails to prepay any Loan on the date specified in any prepayment notice delivered pursuant to Section 2.11(a), the Borrower on demand by any Lender shall pay to the Agent for the account of such Lender any amounts required to compensate such Lender for any loss incurred by such Lender as a result of such failure to prepay, including, without limitation, any loss, cost or expenses incurred by reason of the acquisition of deposits or other funds by such Lender to fulfill deposit obligations incurred in anticipation of such prepayment.  Each Lender shall deliver to the Borrower and the Agent from time to time one or more certificates setting forth the amount of such loss (and in reasonable detail the manner of computation thereof) as determined by such Lender, which certificates shall be conclusive absent manifest error.

(d)           [Intentionally omitted.]

(e)           The outstanding principal amount of the Loans shall be repaid immediately to the extent that the aggregate amount of the Loans plus the L/C Exposure exceeds the Total Commitment then in effect.

(f)            [Intentionally omitted.]

(g)           Simultaneously with each termination and/or reduction of the Total Commitment pursuant to Section 2.8, the Borrower shall pay to the Agent for the account of the Lenders the amount, if any, by which the sum of the aggregate outstanding principal amount of the Loans and the L/C Exposure exceeds the reduced Total Commitment, all accrued and unpaid interest thereon and the Commitment Fees on the amount of the Total Commitment so terminated or reduced through the date thereof.

(h)           If on any day on which the Loans would otherwise be required to be prepaid but for the operation of this Section 2.11(h) (each, a “Prepayment Date”), the amount of such required prepayment exceeds the then outstanding aggregate principal amount of the Loans which consist of Alternate Base Rate Loans, and no Default or Event of Default is then continuing, then on such Prepayment Date the Borrower may, at its option, deposit Dollars into the Cash Collateral Account in an amount equal to such excess.  If the Borrower makes such deposit (i) only the outstanding Alternate Base Rate Loans that are also Revolving Credit Loans shall be required to be prepaid on such Prepayment Date, and (ii) on the last day of each Interest Period in effect after such Prepayment Date the Agent is irrevocably authorized and directed to apply funds from the Cash Collateral Account (and liquidate investments held in the Cash Collateral Account as necessary) to prepay Eurodollar Loans that are also Revolving Credit Loans for which the Interest Period is then ending until the aggregate of such prepayments equals the prepayment which would have been required on such Prepayment Date but for the operation of this Section 2.11(h); provided, however, that if there are no outstanding Revolving Credit Loans, or the amount of outstanding Revolving Credit Loans is less than the required prepayment, then the outstanding Term Loans that are also Alternate Base Rate Loans shall be required to be prepaid on such Prepayment Date and on the last day of each Interest Period the Agent may apply funds in the Cash Collateral Account to prepay Eurodollar Loans that are also Term Loans as set forth in clause (ii) herein.

(i)            Unless otherwise designated in writing by the Borrower, all prepayments shall be applied to the applicable principal payment set forth in this Section 2.11, first to that amount of such applicable principal payment then maintained as Alternate Base Rate Loans, and then to that amount of such applicable principal payment maintained as Eurodollar Loans in order of the scheduled expiry of Interest Periods with respect thereto.

(j)            All prepayments (other than prepayments of Alternate Base Rate Loans) shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to the date of prepayment.

SECTION 2.12.  Change in Circumstances.  (a)  In the event that after the Initial Date hereof any change in Applicable Law or in the interpretation or administration thereof

(including, without limitation, any request, guideline or policy not having the force of law) by any Governmental Authority charged with the administration or interpretation thereof or, with respect to clause (ii), (iii) or (iv) below, any change in conditions shall occur which shall:

(i)            subject any Lender to, or increase the net amount of, any tax, levy, impost, duty, charge, fee, deduction or withholding with respect to any Eurodollar Loan (other than withholding tax imposed by the United States of America or any political subdivision or taxing authority thereof or any other tax, levy, impost, duty, charge, fee, deduction or withholding (x) that is measured with respect to the overall net income of such Lender or of a Lending Office of such Lender, and that is imposed by the United States of America, or by the jurisdiction in which such Lender or Lending Office is incorporated, in which such Lending Office is located, managed or controlled or in which such Lender has its principal office (or any political subdivision or taxing authority thereof or therein), or (y) that is imposed solely by reason of any Lender failing to make a declaration of, or otherwise to establish, non-residence, or to make any other claim for exemption, or otherwise to comply with any certification, identification, information, documentation or reporting requirements prescribed under the laws of the relevant jurisdiction, in those cases where a Lender may properly make such declaration or claim or so establish non-residence or otherwise comply); or

(ii)           change the basis of taxation of any payment to any Lender of principal or any interest on any Eurodollar Loan or other fees and amounts payable hereunder, or any combination of the foregoing other than withholding tax imposed by the United States of America as applicable, or any political subdivision or taxing authority thereof or therein or any other tax, levy, impost, duty, charge, fee, deduction or withholding that is measured with respect to the overall net income of such Lender or of a Lending Office of such Lender, and that is imposed by the United States of America or by the jurisdiction in which such Lender or Lending Office is incorporated or carries on business, in which such Lending Office is located, managed or controlled or in which such Lender has its principal office or a presence not otherwise connected with, or required by, this transaction (or any political subdivision or taxing authority thereof or therein); or

(iii)          impose, modify or deem applicable any reserve, deposit or similar requirement against any assets held by, deposits with or for the account of or loans or commitments by an office of such Lender; or

(iv)          impose upon such Lender or the London interbank market any other condition with respect to the Eurodollar Loans, any Letter of Credit or this Agreement;

and the result of any of the foregoing shall be to increase the actual cost to such Lender of making or maintaining any Eurodollar Loan hereunder or to reduce the amount of any payment (whether of principal, interest or otherwise) received or receivable by such Lender, or to require such Lender to make any payment in connection with any Eurodollar Loan, in each case by or in an amount which such Lender in its sole judgment shall deem material, then and in each case the Borrower shall pay to the Agent for the account of such Lender, as provided in paragraph (c) below, such amounts as shall be necessary to compensate such Lender for such cost, reduction or payment.

(b)           If at any time and from time to time after the Initial Date any Lender shall have determined that the applicability of any law, rule, regulation or guideline adopted after the Initial Date regarding capital adequacy, or any change in any of the foregoing or in the interpretation or administration of any of the foregoing by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or any Lending Office of such Lender) or any Lender’s holding company with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Credit Agreement or the Loans made or Letters of Credit issued or participated in by such Lender pursuant hereto to a level below that which such Lender or such Lender’s holding company could have achieved but for such applicability, adoption, change or compliance (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered with respect to Loans made or Letters of Credit issued or participated in by such Lender hereunder.

(c)           Each Lender shall deliver to the Borrower and the Agent from time to time, one or more certificates setting forth the amounts due to such Lender under paragraphs (a) and (b) above, the changes as a result of which such amounts are due and the manner of computing such amounts.  Each such certificate shall be conclusive in the absence of manifest error.  The Borrower shall pay to the Agent for the account of each such Lender the amounts shown as due on any such certificate within ten Business Days after its receipt of the same.  No failure on the part of any Lender to demand compensation under paragraph (a) or (b) above on any one occasion shall constitute a waiver of its rights to demand compensation on any other occasion.  The protection of this Section shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of any law, regulation or other condition which shall give rise to any demand by such Lender for compensation thereunder.

(d)           Each Lender agrees that, as promptly as practicable after it becomes aware of the occurrence of an event or the existence of a condition that (i) would cause it to incur any increased cost under Section 2.9(b) or this Section 2.12 or (ii) would require the Borrower to pay an increased amount under Section 2.9(b) or this Section 2.12, it will use reasonable efforts to notify the Borrower of such event or condition and, to the extent not inconsistent with such Lender’s internal policies, will use its reasonable efforts to make, fund or maintain the affected Loans of such Lender, or, if applicable, to participate in Letters of Credit as required by Section 2.4, through another Lending Office of such Lender if as a result thereof the additional monies which would otherwise be required to be paid or the reduction of amounts receivable by such Lender thereunder in respect of such Loans or Letters of Credit would be materially reduced, or such inability to perform would cease to exist, or the increased costs which would otherwise be required to be paid in respect of such Loans or Letters of Credit pursuant to Section 2.11(b) or this Section 2.12 would be materially reduced or the taxes or other amounts otherwise payable under Section 2.9(b) or this Section 2.12 would be materially reduced, and if, as determined by such Lender, in its sole discretion, the making, funding or maintaining of such Loans or the participation in such Letters of Credit through such other Lending Office would not otherwise materially adversely affect such Loans, such Letters of Credit or such Lender.

SECTION 2.13.  Change in Legality.  (a)  Notwithstanding anything to the contrary contained elsewhere in this Agreement, if any change after the date hereof in Applicable Law, guideline or order, or in the interpretation thereof by any Governmental Authority charged with the administration thereof, shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or to give effect to its obligations as contemplated hereby with respect to a Eurodollar Loan, then, by written notice to the Borrower and the Agent, such Lender may (i) declare that Eurodollar Loans will not thereafter be made by such Lender hereunder and/or (ii) require that, subject to Section 2.11(b), all outstanding Eurodollar Loans made by it be converted to Alternate Base Rate Loans, whereupon all of such Eurodollar Loans shall automatically be converted to Alternate Base Rate Loans as of the effective date of such notice as provided in paragraph (b) below.  Such Lender’s Pro Rata Share of any subsequent Borrowing of Eurodollar Loans shall, instead, be an Alternate Base Rate Loan unless such declaration is subsequently withdrawn.

(b)           A notice to the Borrower by any Lender pursuant to paragraph (a) above shall be effective for purposes of clause (ii) thereof, if lawful, on the last day of the current Interest Period for each outstanding Eurodollar Loan and, in all other cases, on the date of receipt of such notice by the Borrower.

SECTION 2.14.  Manner of Payments.  All payments of principal and interest in respect of any Loans shall be pro rata among the Lenders in accordance with their Percentages.  All payments by the Borrower hereunder and under the Notes shall be made without offset or counterclaim in Dollars in Federal or other immediately available funds at the office of The Chase Manhattan Bank, Loan and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, for credit to the Clearing Account no later than 1:00 p.m., New York City time, on the date on which such payment shall be due.  Any payment received at such office after such time shall be deemed received on the following Business Day.  Interest in respect of any Loan hereunder shall accrue from and including the date of such Loan to but excluding the date on which such Loan is paid or converted to a Loan of a different type.

SECTION 2.15.  United States Withholding.  (a)  Prior to the date of the initial Loans hereunder and prior to the effective date set forth in the Assignment and Acceptance with respect to any Lender becoming a Lender after the date hereof, and from time to time thereafter if requested by the Borrower or the Agent or required because, as a result of a change in law or a change in circumstances or otherwise, a previously delivered form or statement becomes incomplete or incorrect in any material respect, each Lender organized under the laws of a jurisdiction outside the United States shall provide, if applicable, the Agent and the Borrower with complete, accurate and duly executed forms or other statements prescribed by the Internal Revenue Service of the United States certifying such Lender’s exemption from, or entitlement to a reduced rate of, United States withholding taxes (including backup withholding taxes) with respect to all payments to be made to such Lender hereunder and under any other Fundamental Documents.

(b)           The Borrower and the Agent shall be entitled to deduct and withhold any and all present or future taxes or withholdings, and all liabilities with respect thereto, from payments hereunder or under any other Fundamental Documents, if and to the extent that the

Borrower or the Agent in good faith determines that such deduction or withholding is required by the law of the United States, including, without limitation, any applicable treaty of the United States.  In the event the Borrower or the Agent shall so determine that deduction or withholding of taxes is required, it shall advise the affected Lender as to the basis of such determination prior to actually deducting and withholding such taxes.  In the event the Borrower or the Agent shall so deduct or withhold taxes from amounts payable hereunder, it (i) shall pay to or deposit with the appropriate taxing authority in a timely manner the full amount of taxes it has deducted or withheld; (ii) shall provide evidence of payment of such taxes to, or the deposit thereof with, the appropriate taxing authority and a statement setting forth the amount of taxes deducted or withheld, the applicable rate, and any other information or documentation reasonably requested by the Lenders from whom the taxes were deducted or withheld; and (iii) shall forward to such Lenders any receipt of the deducted or withheld taxes as may be issued from time to time by the appropriate taxing authority.  Unless the Borrower and the Agent have received forms or other documents satisfactory to them indicating that payments hereunder or under the Notes are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Borrower or the Agent may withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Lender organized under the laws of a jurisdiction outside the United States.

(c)           Each Lender agrees (i) that as between it and the Borrower or the Agent, it shall be the Person to deduct and withhold taxes, and to the extent required by law it shall deduct and withhold taxes, on amounts that such Lender may remit to any other Person(s) by reason of any undisclosed transfer or assignment of an interest in this Agreement to such other Person(s) pursuant to paragraph (f) of Section 13.3 and (ii) to indemnify the Borrower and the Agent and any officers, directors, agents, or employees of the Borrower or the Agent against and to hold them harmless from any tax, interest, additions to tax, penalties, reasonable counsel and accountants’ fees, disbursements or payments arising from the assertion by any appropriate taxing authority of any claim against them relating to a failure to withhold taxes as required by law with respect to amounts described in clause (i) of this paragraph (c) or arising from the reliance by the Borrower or the Agent on any form or other document furnished by such Lender and purporting to establish a basis for not withholding, or for withholding at a reduced rate, taxes with respect to payments hereunder or under any other Fundamental Document.

(d)           Each assignee of a Lender’s interest in this Credit Agreement in conformity with Section 13.3 shall be bound by this Section 2.15, so that such assignee will have all of the obligations and provide all of the forms and statements and all indemnities, representations and warranties required to be given under this Section 2.15.

(e)           Notwithstanding the foregoing, in the event that any withholding taxes or additional withholding taxes shall become payable solely as a result of any change in any statute, treaty, ruling, determination or regulation (or interpretation of any of the foregoing) occurring after the Initial Date in respect of any sum payable hereunder or under any other Fundamental Document to any Lender or the Agent (i) the sum payable by the Borrower (or, if applicable, the relevant Credit Party) shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.15) such Lender or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower (or, if applicable, the

relevant Credit Party) shall make such deductions, (iii) the Borrower (or, if applicable, the relevant Credit Party) shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with Applicable Law and (iv) the Borrower (or, if applicable, the relevant Credit Party) shall forward to such Lender or the Agent (as the case may be) the official tax receipts or other documentation pursuant to Section 2.15(b).  In addition, the Borrower (and, if applicable, the relevant Credit Party) shall indemnify each Lender and the Agent for any additional withholding taxes paid by such Lender or the Agent, as the case may be, or any liability (including penalties and interest) arising therefrom or with respect thereto, whether or not such additional withholding taxes were correctly or legally asserted.

(f)            In the event that a Lender receives a refund of or credit for taxes withheld or paid pursuant to clause (e) of this Section, which credit or refund is identifiable by such Lender as being a result of taxes withheld or paid in connection with sums payable hereunder or under any other Fundamental Document, such Lender shall promptly notify the Agent and the Borrower and shall, if no Event of Default has occurred and is continuing, remit to the Borrower the amount of such refund or credit allocable to payments made hereunder or under any other Fundamental Document.

(g)           Each Lender agrees that after it becomes aware of the occurrence of an event that would cause the Borrower or any other Credit Party to pay any amount pursuant to Section 2.15(d), it will use reasonable efforts to notify the Borrower of such event and, to the extent not inconsistent with such Lender’s internal policies, will use its reasonable efforts to make, fund or maintain the affected Loans of such Lender, or, if applicable, to participate in Letters of Credit through another Lending Office of such Lender if as a result thereof the additional monies which would otherwise be required to be paid by reason of Section 2.15(d) in respect of such Loans, Letters of Credit or participations therein would be materially reduced, and if, as determined by such Lender, in its discretion, the making, funding or maintaining of such Loans, Letters of Credit or participations therein through such other Lending Office would not otherwise materially adversely affect such Loans, Letters of Credit or participations therein or such Lender.

SECTION 2.16.  Interest Adjustments.  If the provisions of this Credit Agreement or any Note would at any time require payment by the Borrower to a Lender of any amount of interest in excess of the maximum amount then permitted by Applicable Law, the interest payments to that Lender shall be reduced to the extent necessary so that such Lender shall not receive interest in excess of such maximum amount.  If, as a result of the foregoing, a Lender shall receive interest payments hereunder or under a Note in an amount less than the amount otherwise provided hereunder, such deficit (hereinafter called the “Interest Deficit”) will, to the fullest extent permitted by Applicable Law, cumulate and will be carried forward (without interest) until the termination of this Agreement.  Interest otherwise payable to a Lender hereunder and under a Note for any subsequent period shall be increased by the maximum amount of the Interest Deficit that may be so added without causing such Lender to receive interest in excess of the maximum amount then permitted by Applicable Law.

The amount of any Interest Deficit relating to a particular Loan and Note shall be treated as a prepayment penalty and paid in full at the time of any optional prepayment by the Borrower to the Lenders of all the Loans at that time outstanding pursuant to Section 2.11(a) hereof and a

termination of the Commitments under Section 2.8.  The amount of any Interest Deficit relating to a particular Loan and Note at the time of any complete payment of the Loans at that time outstanding (other than an optional prepayment thereof pursuant to Section 2.10(a) hereof) shall be cancelled and not paid.

3.             REPRESENTATIONS AND WARRANTIES

In order to induce the Agent, Lenders and the Issuing Bank to enter into this Credit Agreement and to make the Loans and issue or participate in the Letters of Credit provided for herein, the Credit Parties, jointly and severally, make the following representations and warranties to, and agreements with, the Agent, the Lenders and the Issuing Bank, all of which shall survive the execution and delivery of this Agreement, the issuance of the Notes and the Letters of Credit and the making of the Loans:

SECTION 3.1.  Corporate Existence and Power.  (a)  Each Credit Party is a corporation, limited liability company or partnership, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and is in good standing or has applied for authority to operate as a foreign entity in all jurisdictions where the nature of its properties or business so requires it and where a failure to be in good standing as a foreign entity would have a material adverse effect on the business, assets or condition, financial or otherwise, of such Credit Party.  As of the Closing Date, the Borrower is engaged in a U.S. trade or business.

(b)           Each Credit Party has the power and authority (i) to own its respective properties and carry on its respective businesses as now being conducted, (ii) to execute, deliver and perform its obligations (as applicable) under this Credit Agreement and the other Fundamental Documents and any other documents contemplated hereby, (iii) in the case of the Borrower, to borrow hereunder, (iv) to grant to the Agent, for the benefit of itself, the Issuing Bank and the Lenders, a security interest in the Collateral including the Pledged Securities, to the extent applicable, as contemplated by this Credit Agreement and the other Fundamental Documents to which it is or will be a party and (v) in the case of the Guarantors, to guarantee the Obligations as contemplated by Article 10 hereof.

(c)           A list of all of the Credit Parties setting forth their jurisdictions of organization and the jurisdictions in which they are in good standing as of the Amendment No. 17 Effective Date as provided in Section 3.1(a) hereof is attached hereto as Schedule 3.1.

SECTION 3.2.  Authority and No Violation.  (a)  The execution, delivery and performance of this Credit Agreement and the other Fundamental Documents by each Credit Party and the grant to the Agent for the benefit of itself, the Issuing Bank and the Lenders of a security interest in the Collateral as contemplated herein or in the other Fundamental Documents, and in the case of the Borrower, the Borrowings hereunder and the execution, delivery and performance of the Notes by the Borrower and, in the case of each Guarantor, the guaranty of the Obligations as contemplated by Article 10 hereof, (a) have been duly authorized by all necessary corporate or company (as applicable) action on the part of each Credit Party, (b) will not violate any provision of any Applicable Law, or any order of any court or other agency of the United States or any State thereof, applicable to any Credit Party or any of its respective properties or assets, (c) will not violate any provision of the Certificate of Incorporation or By-Laws, limited

liability company agreement or other organizational document of any Credit Party, or any indenture, any agreement for borrowed money, any bond, note or other similar instrument in any material respect or any other material agreement to which any Credit Party is a party or by which any Credit Party or any of its properties or assets are bound, (d) will not be in conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement, bond, note, instrument or other material agreement and (e) will not result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any property or assets of any Credit Party other than pursuant to this Agreement or any other Fundamental Document.

(b)           There are no restrictions on the transfer of any Pledged Securities other than as a result of the Credit Agreement or applicable securities laws and the regulations promulgated thereunder or such as would not prevent the Agent from exercising its remedies with respect to such Pledged Securities in the case of an Event of Default.

SECTION 3.3.  Governmental and Other Approvals.  All authorizations, approvals, registrations or filings with any Governmental Authority or public regulatory body (other than UCC-1 Financing Statements, the Copyright Security Agreement and the Trademark Security Agreement which will be delivered to the Agent on or prior to the Closing Date), in form suitable for recording or filing with the appropriate filing office, required for the execution, delivery and performance by the Credit Parties of this Credit Agreement and the other Fundamental Documents, and the execution and delivery by the Borrower of the Notes, have been duly obtained or made and are in full force and effect or have been duly applied for, and if any such further authorizations, approvals, registrations or filings should hereafter become necessary, the Credit Parties shall obtain or make all such authorizations, approvals, registrations or filings.

SECTION 3.4.  Financial Statements.  Each of the audited financial statements of the Borrower and its Consolidated Subsidiaries at December 31, 2009 together with the related statements of operations and cash flow and the related notes and supplemental information are complete and correct and have been prepared in accordance with GAAP in effect as of such date consistently applied, except as otherwise indicated in the notes to such financial statements and subject in the case of unaudited statements to changes resulting from year-end audit adjustments.  All of such financial statements fairly present the financial condition or the results of operations of the Borrower and its Consolidated Subsidiaries on a consolidated basis at the dates and for the periods indicated and (in the case of the balance sheets) reflect (including the notes thereto) all known liabilities and subject in the case of unaudited statements to changes resulting from year-end audit adjustments, contingent or otherwise, as of such dates required in accordance with GAAP to be shown or reserved against, or disclosed in notes to financial statements.

SECTION 3.5.  No Material Adverse Change.  (a)  Since December 31, 2009 there has been no material adverse change in the business, assets, condition (financial or otherwise), or results of operations of the Borrower and its Subsidiaries, taken as a whole.

(b)           No Credit Party has entered or is entering into the arrangements contemplated hereby and by the other Fundamental Documents, or intends to make any transfer or incur any obligations hereunder or thereunder, with actual intent to hinder, delay or defraud either present or future creditors.  On and as of the Closing Date, on a pro forma basis after giving effect to all Indebtedness (including the Loans) expected to be borrowed or repaid on the Closing Date, (i) each Credit Party expects the cash available to such Credit Party, after taking into account all other anticipated uses of the cash of such Credit Party (including the payments on or in respect of debt referred to in clause (iii) of this Section 3.5(b)), will be sufficient to satisfy all final judgments for money damages which have been docketed against such Credit Party or which may be rendered against such Credit Party in any action in which such Credit Party is a defendant (taking into account the reasonably anticipated maximum amount of any such judgment and the earliest time at which such judgment might reasonably be anticipated to be entered); (ii) the sum of the present fair saleable value of the combined assets of all of the Credit Parties will exceed the probable liability of the Credit Parties on their debts (including their Guaranties); (iii) no Credit Party will have incurred or intends to, or believes that it will, incur debts beyond its ability to pay such debts as such debts mature (taking into account the timing and amounts of cash to be received by such Credit Party from any source and of amounts to be payable on or in respect of debts of such Credit Party and the amounts referred to in clause (i)); and (iv) each Credit Party believes it will have sufficient capital with which to conduct its present and proposed business and the property of such Credit Party does not constitute unreasonably small capital with which to conduct its present or proposed business.  For purposes of this paragraph (b), “debt” means any liability or a claim, and “claim” means (y) right to payment whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or (z) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured.

SECTION 3.6.  Ownership of Pledged Securities, Subsidiaries, etc.  (a)  Annexed hereto as Schedule 3.6(a) is a correct and complete list as of the Amendment No. 17 Effective Date, of each Credit Party showing, as to each, (i) its name, (ii) the type of entity it is, (iii) the jurisdiction in which it was incorporated or otherwise organized, (iv) in the case of each Credit Party which is a corporation, its authorized capitalization, the number of shares of its capital stock outstanding and other than as to the Borrower the ownership of its capital stock and (v) in the case of each Credit Party which is a limited liability company, the ownership of its membership interests.

(b)           Except as noted on Schedule 3.6(b), as of the Amendment No. 17 Effective Date no Credit Party holds any Equity Interest or other Investment, either directly or indirectly, in any Person other than another Credit Party and no Credit Party is a general or limited partner in any joint venture or partnership.

SECTION 3.7.  Copyrights, Trademarks and Other Rights.  (a)  As of the Amendment No. 17 Effective Date, the items of Product listed on Schedule 3.7(a) hereto comprise all of the Product in which any Credit Party has any right, title or interest (either directly, through a joint venture or partnership or otherwise).  The existing U.S. copyright registration number (or if not yet obtained, the registration status) for each of the items of Product

set forth on Schedule 3.7(a) for which any Credit Party owns the underlying copyright or an interest in copyright are as  set forth on Schedule 3.7(a).  Schedule 3.7(a) also identifies the location of the Physical Materials related to each item of Product owned by any Credit Party or to which any Credit Party has rights of access.  To the best of each Credit Party’s knowledge, all items of Product and all component parts thereof do not and will not violate or infringe upon any copyright, right of privacy, trademark, patent, trade name, performing right or any literary, dramatic, musical, artistic, personal, private, several, care, contract, property or copyright right or any other right of any Person, in any material respect or contain any libelous or slanderous material.  There is no claim, suit, action or proceeding pending or, to the best of each Credit Party’s knowledge, threatened against any Credit Party that involves a claim of infringement of any copyright with respect to any item of Product listed on Schedule 3.7(a), and no Credit Party has any knowledge of any existing infringement by any other Person of any copyright held by any Credit Party with respect to any item of Product listed on Schedule 3.7(a).

(b)           Schedule 3.7(b) hereto (i) lists all the trademarks registered by any Credit Party as of the Amendment No. 17 Effective Date and identifies the Credit Party in whose name each such trademark is registered and (ii) specifies as to each, the jurisdictions in which such trademark has been issued or registered (or, if applicable, in which an application for such issuance or registration has been filed), including the respective registration or application numbers and applicable dates of registration or application and (iii) specifies as to each, as applicable, material licenses, sublicenses and other material agreements as of the Amendment No. 17 Effective Date  (other than any agreements which relate to the exploitation of an item of Product), to which any Credit Party is a party and pursuant to which any Person, other than a Credit Party, is authorized to use such trademark.

(c)           All applications and registrations for all copyrights, trademarks, service marks, trade names and service names in which any Credit Party has any right, title or interest are valid and in full force and effect and are not subject to the payment of any taxes or maintenance fees or the taking of any other actions by the Credit Parties (other than standard renewals) to maintain their validity or effectiveness.

SECTION 3.8.  Fictitious Names.  None of the Credit Parties has done business, is doing business or intends to do business other than under its full corporate or company name (as applicable), including, without limitation, under any tradename or other doing business name other than as listed on Schedule 3.8.

SECTION 3.9.  Title to Properties.  The Credit Parties have good title to each of the properties and assets reflected on the financial statements referred to in Section 3.4 or delivered pursuant to Section 5.1(a) hereof and all such properties and assets will be free and clear of Liens, except Permitted Encumbrances.

SECTION 3.10.  UCC Filing Information.  The chief executive office of each Credit Party is, as of the Amendment No. 17 Effective Date, as set forth on Schedule 3.10 hereto, the state of incorporation or formation of each Credit Party is listed on Schedule 3.10 hereto and the place where each Credit Party keeps the records concerning the Collateral as of the Amendment

No. 17 Effective Date or regularly keeps any goods included in the Collateral as of the Amendment No. 17 Effective Date are also listed on Schedule 3.10 hereto.

SECTION 3.11.  Litigation.  Except as set forth on Schedule 3.11, there are no actions, lawsuits or other proceedings pending (including, but not limited to, matters relating to environmental liability), or, to the knowledge of any Credit Party, threatened, against or affecting any Credit Party or any of its respective properties, by or before any Governmental Authority, arbitration panel, or arbitrator, which could reasonably be expected to have a Material Adverse Effect on the financial condition or the business of any Credit Party or which involve this Agreement or any of the transactions contemplated hereby.  No Credit Party is in default with respect to any order, writ, injunction, decree, rule or regulation of any Governmental Authority, which default would have a Material Adverse Effect.

SECTION 3.12.  Federal Reserve Regulations.  No Credit Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.  No part of the proceeds of the Loans will be used, directly or indirectly, and whether immediately, incidentally or ultimately to purchase or carry any Margin Stock, to extend credit to others for the purpose of purchasing or carrying any Margin Stock or for any other purpose violative of or inconsistent with any of the provisions of any regulations of the Board of Governors of the Federal Reserve System, including, without limitation, Regulations D, T, U and X.

SECTION 3.13.  Investment Company Act.  No Credit Party will during the term of this Agreement be, (x) an “investment company”, within the meaning of the Investment Company Act of 1940, as amended or (y) subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act or any foreign, federal or local statute or regulation limiting its ability to incur indebtedness for money borrowed as contemplated hereby or by any other Fundamental Document.

SECTION 3.14.  Binding Agreements.  This Credit Agreement and the other Fundamental Documents when executed will constitute, the legal, valid and enforceable obligations of each Credit Party that is a party thereto enforceable against such Credit Party in accordance with its respective terms, subject, as to the enforcement of remedies, to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity.

SECTION 3.15.  Taxes.  All federal, state and local tax returns which are required to be filed by or on behalf of the Credit Parties have been filed, and the Credit Parties have paid or caused to be paid all taxes payable by the Credit Parties as shown on said returns or on any assessment received by them in writing, to the extent that such taxes have become due, except as permitted by Section 5.11 hereof.  No Credit Party knows of any material additional assessments or any basis therefore.  The Credit Parties believe that the charges, accruals and reserves on their books in respect of taxes or other governmental charges are accurate in all material respects.

SECTION 3.16.  Compliance with ERISA and Applicable Law.  (a)  Each Plan has been maintained and operated in all material respects in accordance with all applicable laws, including

ERISA and the Code, and each Plan intended to qualify under section 401(a) of the Code so qualifies.  No Reportable Event has occurred in the last five years as to any Plan.  No Plan has any “accumulated funding deficiency” as defined in section 302 of ERISA or Section 412 of the Code (whether or not waived) and no application has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standards (including required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan.  No material liability has been, and no circumstances exist pursuant to which any material liability could be, imposed upon any Credit Party or ERISA Affiliate (i) under sections 4971 through 4980B of the Code, section 502(i) or 502(l) of ERISA, or Title IV of ERISA with respect to any Plan or Multiemployer Plan or with respect to any plan heretofore maintained by any Credit Party or ERISA Affiliate or any entity that heretofore was an ERISA Affiliate or (ii) for the failure to fulfill any obligation to contribute to any Multiemployer Plan.  No material liability has been, and no circumstances exist pursuant to which any material liability could be, imposed upon any Credit Party with respect to any Plan that provides post-retirement welfare coverage (other than as required pursuant to Section 4980B of the Code).  Neither any Credit Party nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization or has been terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated.

(b)           The execution, delivery and performance of the Fundamental Documents and the consummation of the transactions contemplated hereby and thereby will not involve any “prohibited transaction” within the meaning of ERISA or the Code.

SECTION 3.17.  Agreements.  (a)  No Credit Party is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument (including any License Agreement or Platform Agreement) to which it is a party which could reasonably be expected to have a Material Adverse Effect or result in the loss of more than 5,000,000 Subscribers.

(b)           Schedule 3.17 is a true and complete listing as of the Amendment No. 17 Effective Date of (i) all credit agreements, indentures, and other agreements related to any indebtedness for borrowed money of any Credit Party, other than the Fundamental Documents and intercompany indebtedness among the Credit Parties, (ii) all joint venture agreements to which any Credit Party is a party, (iii) all material License Agreements and Platform Agreements, (iv) all agreements or other arrangements pursuant to which a Credit Party has granted a Lien to any Person other than Permitted Encumbrances and (v) all other contractual arrangements entered into by a Credit Party or by which any Credit Party is bound which arrangements are material to any Credit Party, including but not limited to, Guaranties and employment agreements.  For purposes of this Section 3.17, a Platform Agreement or other contract, agreement or arrangement shall be deemed “material” if the Credit Parties reasonably expect that any Credit Party would, pursuant to the terms thereof, (A) recognize future revenues in excess of US$1,000,000 per annum or, (B) incur liabilities, obligations or expenses in excess of US$1,000,000 per annum.  Schedule 3.17B is a true and complete listing as of the Amendment No. 17 Effective Date of all material (with materiality determined in accordance with the preceding sentence) agreements between any Credit Party and any of their non-Credit Party Affiliates.

SECTION 3.18.  Indebtedness; Guaranties; Liens.  (a)  Except for this Agreement and as otherwise disclosed on Schedule 3.18(a), as of the Amendment No. 17 Effective Date no Credit Party has any outstanding Indebtedness except for intercompany indebtedness among the Credit Parties.

(b)           Except for this Agreement and as otherwise disclosed on Schedule 3.18(b), as of the Amendment No. 17 Effective Date no Credit Party is responsible for any Indebtedness of any other Person.

(c)           Except for (i) Liens arising under this Agreement, (ii) Liens disclosed on Schedule 3.18(c) and (iii) Permitted Encumbrances no Credit Party has granted or is aware of the existence of any Liens on any property of any Credit Party.

SECTION 3.19.  Security Interest; Other Security.  This Agreement and the other Fundamental Documents, when executed and delivered and, to the extent appropriate, filed in locations where required by law, in connection with the execution and delivery hereof will create and grant to the Agent for the benefit of itself, the Issuing Bank and the Lenders (upon the making of the first Loan hereunder, the filing of the appropriate UCC-1 financing statements, the Copyright Security Agreement with the United States Copyright Office, the Trademark Security Agreement with the Patent and Trademark Office and delivery of the Pledged Securities with appropriate stock powers to the Agent) a valid and first priority perfected security interest in the Collateral located in the United States subject only to Permitted Encumbrances.

SECTION 3.20.  Disclosure.  Neither this Credit Agreement nor any other Fundamental Document nor any other agreement, document, certificate or statement furnished to the Agent for the benefit of the Lenders by or on behalf of any Credit Party in connection with the transactions contemplated hereby at the time it was furnished contained any untrue statement of a material fact or omitted to state a material fact, under the circumstances under which it was made, necessary in order to make the statements contained herein or in any other Fundamental Document not misleading in any material respect.  At the date hereof, there is no fact relating to any Credit Party known to any Credit Party which would have a Material Adverse Effect or would reasonably be expected to have a Material Adverse Effect in the future.

SECTION 3.21.  Licensed Rights.  The License Agreements grant to the Credit Parties sufficient rights in and to the items of Product licensed thereunder to enable the Credit Parties to perform their respective obligations under the Platform Agreements, and no Credit Party is in breach of any of its material obligations under such agreements, nor does any Credit Party have any knowledge of any breach or anticipated breach by any other parties thereto which could reasonably be expected to result in any material adverse change in the business, properties, assets, operations or condition (financial or otherwise) of any Credit Party.

SECTION 3.22.  Environmental Liabilities.  (a)  No Credit Party has used, stored, treated, transported, manufactured, refined, handled, produced or disposed of any Hazardous Materials on, under, at, from or in any way affecting, any properties or assets owned or leased by a Credit Party, in any manner which at the time of the action in question violated in any material respect any Environmental Law governing the use, storage, treatment, transportation, manufacture, refinement, handling, production or disposal of Hazardous Materials, and, to the

best of each Credit Party’s knowledge, no prior owner of any such property or asset or any tenant, subtenant, prior tenant or prior subtenant thereof has used Hazardous Materials on or affecting such property or asset, or otherwise, in any manner which at the time of the action in question violated in any material respect any Environmental Law governing the use, storage, treatment, transportation, manufacture, refinement, handling, production or disposal of Hazardous Materials.

(b)           To the best of each Credit Party’s knowledge, (i) no Credit Party has any obligations or liabilities, known or unknown, matured or not matured, absolute or contingent, assessed or unassessed, which could reasonably be expected to have a Material Adverse Effect and (ii) no claims have been made against any of the Credit Parties in the past five years and no presently outstanding citations or notices have been issued against any of the Credit Parties, which could reasonably be expected to have a Material Adverse Effect which in either case have been or are imposed by reason of or based upon any provision of any Environmental Law, including, without limitation, any such obligations or liabilities relating to or arising out of or attributable, in whole or in part, to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation or handling of any Hazardous Materials by any Credit Party, or any of its employees, agents, representatives or predecessors in interest in connection with or in any way arising from or relating to any of the Credit Parties or any of their respective owned or leased properties, or relating to or arising from or attributable, in whole or in part, to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation or handling of any such substance, by any other Person at or on or under any of the real properties owned or used by any of the Credit Parties or any other location where such could reasonably be expected to have a Material Adverse Effect.

SECTION 3.23.  Pledged Securities.  (a)  Annexed hereto as Schedule 3.23 is a correct and complete list as of the Amendment No. 17 Effective Date, of all the Pledged Securities hereunder showing, as to each, the entity whose stock or other Equity Interests are being pledged, the Pledgor of such stock or other Equity Interests, the stock certificate number (as applicable) and the number of shares or amount of the capital stock or other Equity Interests being pledged hereunder.  Each Pledgor (i) is the legal and beneficial owner of, and has sole right, title and interest to, the Pledged Securities owned by such Pledgor, free and clear of all Liens, security interests or other encumbrances whatsoever, except the security interests created by this Credit Agreement and the other Fundamental Documents and (ii) has sole right and power to pledge, and grant the security interest in, and Lien upon, such Pledged Securities pursuant to this Credit Agreement and the other Fundamental Documents without the consent of any Person or Governmental Authority whatsoever.

(b)           All of the Pledged Securities are duly authorized, validly issued, fully paid and non-assessable.

(c)           Except for contractual restrictions disclosed on Schedule 3.23 and restrictions created herein or under applicable securities laws and the regulations promulgated thereunder, there are no restrictions on the transfer of any of the Pledged Securities.

(d)           Except as set forth on Schedule 3.23, there are no warrants, options, conversion or similar rights currently outstanding with respect to, and no agreements to purchase

or otherwise acquire, any shares of the capital stock or other Equity Interests of any issuer of any of the Pledged Securities; and there are no securities or obligations of any kind convertible into any shares of the capital stock or other Equity Interests of any issuer of any of the Pledged Securities.

(e)           Article 11 of this Credit Agreement creates in favor of the Agent (on behalf of the Agent, the Issuing Bank and the Lenders) a valid, binding and enforceable security interest in, and Lien upon, all right, title and interest of the Pledgors in the Pledged Securities and constitutes a fully perfected first and prior security interest and Lien upon all right, title and interest of the Pledgors in such Pledged Securities subject, as to the enforcement of remedies, to applicable bankruptcy, insolvency, reorganization and similar laws affecting creditors’ rights generally and to general principles of equity.

SECTION 3.24.  Compliance with Laws.  No Credit Party is in violation of any Applicable Law except for such violations which in the aggregate would not have a Material Adverse Effect.  The Borrowings hereunder, the intended use of the proceeds of the Loans as described in the preamble hereto and as contemplated by Section 5.17 hereof and any other transactions contemplated hereby will not violate any Applicable Law.

SECTION 3.25.  Bank Accounts. As of the Amendment No. 17 Effective Date, the Credit Parties have no bank accounts other than those listed on Schedule 3.25.

4.             CONDITIONS OF LENDING

SECTION 4.1.  [THE TEXT OF SECTION 4.1 OF THE CREDIT AGREEMENT IS INTENTIONALLY OMITTED FROM THIS EXHIBIT A TO AMENDMENT NO. 17; NO CHANGES ARE BEING EFFECTUATED TO SECTION 4.1 OF THE CREDIT AGREEMENT FROM THOSE PREVIOUSLY IN EFFECT VIA AMENDMENT NO. 17, AND THE CONDITIONS PRECEDENT SET FORTH IN SECTION 4.1 WERE SATISFIED OR WAIVED ON OR ABOUT AUGUST 31, 2001]

SECTION 4.2.  Conditions Precedent to Each Loan and Letter of Credit.  The obligation of the Lenders (including the Agent) to make each Loan (including the initial Loan) and to participate in each Letter of Credit (including the initial Letter of Credit) and of the Issuing Bank to issue each Letter of Credit is subject to the following conditions precedent:

(a)           Notice.  The Agent shall have received a notice with respect to such Borrowing or the Issuing Bank shall have received a notice with respect to such Letter of Credit as required by Article 2 hereof.

(b)           Representations and Warranties.  The representations and warranties set forth in Article 3 hereof and in the other Fundamental Documents shall be true and correct in all material respects on and as of the date of each Borrowing or issuance of a Letter of Credit hereunder (except to the extent that such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct as of such earlier date, or changed circumstances specifically contemplated by, and allowed pursuant to, this Agreement) with the same effect as if made on and as of such date.

(c)           No Event of Default.  On the date of each Borrowing or issuance of a Letter of Credit hereunder, the Credit Parties shall be in material compliance with all of the terms and provisions set forth herein to be observed or performed and no Event of Default or Default shall have occurred and be continuing nor shall any such event occur by reason of the making of such Loans or issuance of such Letter of Credit.

(d)           Borrowing Certificate.  On the date of each Borrowing hereunder, the Agent shall have received a borrowing certificate, substantially in the form of Exhibit D hereto (the “Borrowing Certificate”), executed by an Authorized Officer of the Borrower, dated the date of such Borrowing, containing a certification by the chief financial officer of the Borrower, that (i) no Event of Default or Default has occurred or is continuing and (ii) no Event of Default or Default will occur if the Lenders should make the Loans requested.

(e)           Additional Documents.  The Lenders shall have received from the Borrower on the date of such Borrowing or issuance of a Letter of Credit such documents and information as they may reasonably request relating to the satisfaction of the conditions in this Section 4.2.

Each Borrowing or request for issuance of a Letter of Credit shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing or issuance as to the matters specified in paragraphs (b) and (c) of this Section.

5.             AFFIRMATIVE COVENANTS

From the date hereof and for as long as the Commitments shall be in effect, any amount shall remain outstanding under the Notes, any Letter of Credit shall remain unpaid or unsatisfied, or any other Obligations remain unpaid or unsatisfied, each Credit Party agrees that, unless the Required Lenders shall otherwise consent in writing, each of them will:

SECTION 5.1.  Financial Statements and Reports. Furnish or cause to be furnished to the Agent:

(a)           Within 90 days after the end of each fiscal year, all audited financial statements that the Borrower was required to submit to the S.E.C. as part of its public filings for such fiscal year;

(b)           Within 45 days after the end of each of the first three fiscal quarters of each of its fiscal years, all unaudited financial statements that the Borrower was required to submit to the S.E.C. as part of its public filings for such fiscal quarter;

(c)           Simultaneously with the delivery of the statements referred to in paragraphs (a) and (b) of this Section 5.1, a certificate of an Authorized Officer of the Borrower, in form and substance satisfactory to the Agent (i) stating that in the course of the performance of his duties, he would normally have knowledge of any condition or event which would

constitute an Event of Default or Default and stating whether or not he has knowledge of any such condition or event and, if so, specifying each such condition or event of which he has knowledge and the nature thereof (ii) demonstrating in detail satisfactory to the Agent compliance with the provisions of Sections 6.5(iv)(a) and 6.15 hereof; and (iii) certifying that all filings required under Section 5.8 hereof have been made and listing each such filing that has been made since the date of the last certificate delivered in accordance with this Section 5.1(c);

(d)           [Intentionally omitted;]

(e)           From time to time such additional information regarding the financial condition, business or business prospects of the Credit Parties, the amount of film inventory in which any of the Credit Parties has rights on an individual or market basis or otherwise regarding the Collateral, as any Lender may reasonably request.

SECTION 5.2.  Corporate Existence.  Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its corporate existence (provided, that any Credit Party may merge into or consolidate with another Credit Party, provided further that the Borrower, if it is a party thereto, is the surviving entity), and material rights, licenses, permits and franchises, and comply in all material respects with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, any Governmental Authority.

SECTION 5.3.  Maintenance of Properties.  Keep its tangible properties which are material to its business in good repair, working order and condition subject to ordinary wear and tear and, from time to time (i) make all necessary and proper repairs, renewals, replacements, additions and improvements thereto and (ii) comply at all times with the provisions of all material leases and other material agreements to which it is a party so as to prevent any loss or forfeiture thereof or thereunder unless compliance therewith is being currently contested in good faith by appropriate proceedings and appropriate reserves have been established in accordance with GAAP.

SECTION 5.4.  Notice of Material Events.  (a)  Promptly upon any Executive Officer of a Credit Party obtaining knowledge of (i) any Default or Event of Default, or becoming aware that the Agent, the Issuing Bank or any Lender has given notice or taken any other action with respect to a claimed Event of Default, (ii) any material adverse change in the condition or operations of any Credit Party, financial or otherwise, (iii) any action or event which could reasonably be expected to materially and adversely affect the performance of the Credit Parties’ obligations under this Credit Agreement or any other Fundamental Document, the repayment of the Notes, or the security interests granted to the Agent for the benefit of itself, the Issuing Bank and the Lenders under this Credit Agreement or any other Fundamental Document, (iv) any other event which could reasonably be expected to result in a Material Adverse Effect, (v) the opening of any office of a Credit Party or the change of the executive office, jurisdiction or form of organization, or the principal place of business of any Credit Party or of the location of any Credit Party’s books and records, (vi) any change in the name of any Credit Party, (vii) any other event which could reasonably be expected to materially and adversely impact upon the amount of collectability of any material accounts receivable of the Credit Parties or materially decrease the value of the Collateral or the Pledged Securities, (viii) any proposed material amendment to any material agreements that are part of the Collateral that could reasonably be anticipated to

negatively impact the value of the Collateral, or (ix) any Person giving any notice to any Credit Party or taking any other action with respect to a claimed default or event or condition of the type referred to in paragraph (e) of Article 7, such Credit Party shall promptly give written notice thereof to the Agent specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken and the nature of such claimed Event of Default or condition and what action such Credit Party has taken, is taking and proposes to take with respect thereto.

(b)           [Intentionally omitted.]

SECTION 5.5.  Insurance.  (a)  Keep its assets which are of an insurable character insured (to the extent and for the time periods consistent with normal industry practices) by financially sound and reputable insurers against loss or damage by fire, explosion, theft or other hazards which are included under extended coverage in amounts not less than the insurable value of the property insured or such lesser amounts, and with such self-insured retention or deductible levels, as are consistent with customary industry practices.

(b)           Maintain with financially sound and reputable insurers, insurance against other hazards and risks and liability to Persons and property to the extent and in the manner customary for companies in similar businesses.

(c)           Maintain, or cause to be maintained, in effect during the period from the date of acquisition of each item of Product acquired by any Credit Party until such time as the Agent shall have been provided with satisfactory evidence of the existence of one negative or master tape in one location and in another location, an interpositive or internegative or duplicate master tape of the final version of the completed Product, insurance on the negatives and sound tracks of such item of Product in an amount not less than the cost of re-shooting the principal photography of the item of Product and otherwise recreating such item of Product.

(d)           Maintain, or cause to be maintained, distributor’s “Errors and Omissions” insurance to the extent and in amounts consistent with or greater than customary industry standards.

(e)           Maintain, or cause to be maintained, broadcaster’s “Errors and Omissions” insurance to the extent and in amounts consistent with or greater than customary industry standards.

(f)            Cause all such above-described insurance (excluding worker’s compensation insurance) to (1) provide for the benefit of the Lenders that 30 days’ prior written notice of suspension, cancellation, termination, reduction, non-renewal or lapse or material change of coverage shall be given to the Agent; (2) name the Agent for the benefit of the Lenders as a loss payee (except for “Errors and Omissions” insurance and other third party liability insurance), provided, however, that so long as an Event of Default has occurred and is continuing, property insurance proceeds may be used to repair damage in respect of which such proceeds were received or so long as no Default or Event of Default has occurred and is then continuing, to reimburse a Credit Party for its own funds expended to repair the applicable damage; and (3) to the extent that neither the Agent nor the Lenders shall be liable for premiums

or calls, name the Agent for the benefit of the Lenders as an additional insured including, without limitation, under any “Errors and Omissions” insurance and other third party liability insurance but only from claims arising from the acts or omissions of any Credit Party or its employees, representatives or contractors.

(g)           Upon the request of the Agent, the Borrower will render to the Agent a statement in such detail as the Agent may request as to all such insurance coverage.

SECTION 5.6.  [Intentionally omitted.]

SECTION 5.7.  [Intentionally omitted.]

SECTION 5.8.  Books and Records.  Maintain or cause to be maintained at all times true and complete books and records of its financial operations and provide the Agent and its representatives (and each Lender and its representatives during the continuance of an Event of Default) access to such books and records and to any of its properties or assets upon reasonable notice and during regular business hours in order that the Agent (or such Lender) may make such audits and examinations and make abstracts from such books, accounts, records and other papers pertaining to the Collateral (including, but not limited to, all on and off balance sheet receivables) and may discuss the affairs, finances and accounts with, and be advised as to the same by the Credit Parties’ officers and independent accountants, all as the Agent (or such Lender) may deem appropriate for the purpose of verifying the various reports delivered by any Credit Party to the Agent and/or the Lenders pursuant to this Credit Agreement or for otherwise ascertaining compliance with this Credit Agreement or any Fundamental Document.

SECTION 5.9.  Observance of Agreements.  Duly observe and perform in all material respects all the terms and conditions of all material agreements with respect to the distribution and/or exploitation of items of Product and diligently protect and enforce the rights of the Credit Party under all such agreements in a manner consistent with prudent business judgment and subject to the terms and conditions of such agreements.

SECTION 5.10.  Laboratories; No Removal.  (a)  To the extent any Credit Party has control over or rights to receive any of the Physical Materials relating to any item of Product, deliver or cause to be delivered to a Laboratory or Laboratories all negative and preprint material, master tapes and all sound track materials with respect to each such item of Product and deliver to the Agent a fully executed Pledgeholder Agreement with respect to such materials.  To the extent that any Credit Party has only rights of access to preprint material or master tapes and has not created duplicate materials sufficient to exploit its rights and has not stored such duplicate materials at a Laboratory that has delivered a Pledgeholder Agreement to the Agent, then the Credit Parties will deliver to the Agent a fully executed Laboratory Access Letter covering such materials.  Prior to requesting any Laboratory to deliver such negative or other preprint or sound track material or master tapes to another Laboratory, any such Credit Party shall provide the Agent with a Pledgeholder Agreement or Laboratory Access Letter, as appropriate, executed by such other Laboratory and all other parties to such Pledgeholder Agreement (including the Agent).  Without the consent of the Agent, no Credit Party shall deliver or remove or cause the delivery or removal of the original negative and film or sound materials or master tapes with respect to any item of Product owned by such Credit Party or in

which such Credit Party has an interest (i) to a location outside the United States or (ii) to any state or jurisdiction where UCC-1 financing statements have not been filed against such Credit Party.

(b)           With respect to items of Product acquired after the Closing Date, on at least a quarterly basis, deliver to the Agent and the Laboratories which are signatories to Pledgeholder Agreements a revised schedule of Product on deposit with such Laboratories.

SECTION 5.11.  Taxes and Charges; Indebtedness in Ordinary Course of Business.  Duly pay and discharge, or cause to be paid and discharged, before the same shall become in arrears, all taxes, assessments, levies and other governmental charges, imposed upon any Credit Party or its properties, sales and activities, or any part thereof, or upon the income or profits therefrom, as well as all claims for labor, materials, or supplies which if unpaid could reasonably be expected to become by law a Lien upon any property of a Credit Party; provided, however, that any such tax, assessment, charge, levy or claim need not be paid if the validity or amount thereof shall currently be contested in good faith by appropriate proceedings and if the Borrower shall have set aside on its books reserves (the presentation of which is segregated to the extent required by GAAP) adequate with respect thereto if reserves shall be deemed necessary; and provided, further, that such Credit Party will pay all such taxes, assessments, levies or other governmental charges forthwith upon the commencement of proceedings to foreclose any Lien which may have attached as security therefor.  The Credit Parties will pay when due, or in conformance with customary trade terms all other obligations incident to their respective operations.

SECTION 5.12.  Liens.  Defend the Collateral (including, without limitation, the Pledged Securities) to the extent commercially reasonable against any and all Liens howsoever arising, other than Permitted Encumbrances and in any event defend against any attempted foreclosure.

SECTION 5.13.  Cash Receipts.  In the event any Credit Party receives (i) payment from any obligor, which payment should have been remitted to the Agent or (ii) the proceeds of any sale of Product, whether in the form of cash or otherwise, such Credit Party shall immediately remit such payment or proceeds to the Agent for deposit to the Collection Account.

SECTION 5.14.  [Intentionally omitted.]

SECTION 5.15.  [Intentionally omitted.]

SECTION 5.16.  Environmental Laws.  (a)  Promptly notify the Agent upon any Executive Officer becoming aware of any violation or potential violation or non-compliance with, or liability or potential liability under any Environmental Laws which, when taken together with all other pending violations could reasonably be expected to have a Material Adverse Effect, and promptly furnish to the Agent all notices of any nature which any Credit Party or any Subsidiary may receive from any Governmental Authority or other Person with respect to any violation, or potential violation or non-compliance with, or liability or potential liability under any Environmental Laws which, in any case or when taken together with all such other notices, could reasonably be expected to have a Material Adverse Effect.

(b)           Comply in all material respects with and use reasonable efforts to ensure compliance in all material respects by all tenants and subtenants with all Environmental Laws,

and obtain and comply in all material respects with and maintain and use best efforts to ensure that all tenants and subtenants obtain and comply in all material respects with and maintain any and all licenses, approvals, registrations or permits required by Environmental Laws.

(c)           Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under all Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities.  Any order or directive whose lawfulness is being contested in good faith by appropriate proceedings shall be considered a lawful order or directive when such proceedings, including any judicial review of such proceedings, have been finally concluded by the issuance of a final non-appealable order; provided, however, that the appropriate Credit Party shall have set aside on its books reserves (the presentation of which is segregated to the extent required by GAAP) adequate with respect thereto if reserves shall be deemed necessary.

(d)           Defend, indemnify and hold harmless the Agent, the Issuing Bank and the Lenders, and their respective employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way related to the violation of or non-compliance by any Credit Party with any Environmental Laws, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable external attorney and consultant fees, investigation and laboratory fees, court costs and litigation expenses, but excluding therefrom all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses arising out of or resulting from (i) the gross negligence or willful acts or willful misconduct of any indemnified party or (ii) any acts or omissions of any indemnified party occurring after any indemnified party is in possession of, or controls the operation of, any property or asset.

SECTION 5.17.  [Intentionally omitted.]

SECTION 5.18.  Further Assurances; Security Interests.  (a)  Upon the request of the Agent, duly execute and deliver, or cause to be duly executed and delivered, at the cost and expense of the Borrower, such further instruments as may be necessary or proper, in the reasonable judgment of the Agent, to provide the Agent (for the benefit of itself, the Issuing Bank and the Lenders) a perfected Lien in the Collateral and to carry out the provisions and purposes of this Agreement and the other Fundamental Documents.

(b)           Upon the request of the Agent, promptly perform or cause to be performed any and all acts and execute or cause to be executed any and all documents (including, without limitation, the execution, amendment or supplementation of any financing statement and continuation statement or other statement) for filing under the provisions of the UCC and the rules and regulations thereunder, or any other statute, rule or regulation of any applicable foreign, federal, state or local jurisdiction, which are necessary or advisable, from time to time, in order to grant and maintain in favor of the Agent for the ratable benefit of itself, the Issuing Bank and the Lenders as beneficiaries thereof the security interest in the Collateral contemplated hereunder and under the other Fundamental Documents, subject (other than in connection with the Pledged Securities) only to Permitted Encumbrances.

(c)           Promptly undertake to deliver or cause to be delivered to the Lenders from time to time such other documentation, consents, authorizations and approvals in form and substance satisfactory to the Agent, as the Agent shall deem reasonably necessary or advisable to perfect or maintain the Liens of the Agent for the benefit of itself, the Issuing Bank and the Lenders.

(d)           [Intentionally omitted.]

SECTION 5.19.  [Intentionally omitted.]

6.             NEGATIVE COVENANTS

From the date hereof and for so long as the Commitments shall be in effect, any amount shall remain outstanding under the Notes, any Letter of Credit shall remain unpaid or unsatisfied, or any other Obligations remain unpaid or unsatisfied, each Credit Party agrees that unless the Required Lenders shall otherwise consent in writing, it will not, directly or indirectly, and will not allow any Subsidiary, directly or indirectly, to:

SECTION 6.1.  Limitations on Indebtedness.  Incur, create, assume or suffer to exist any Indebtedness other than:

(i)            the Indebtedness represented by the Notes and the other Obligations;

(ii)           Indebtedness in respect of secured purchase money financings, including Capital Leases, not to exceed $47,000,000 at any time outstanding;

(iii)          ordinary trade payables which are not yet due and payable and are not the result of a transaction which is essentially the borrowing of money;

(iv)          Indebtedness by any Credit Party to any other Credit Party to the extent not otherwise prohibited by this Section 6.1;

(v)           existing Indebtedness listed on Schedule 3.18(a) hereto but no increases thereof;

(vi)          Indebtedness to HCC or an Affiliate of HCC (including the Recapitalized Debt) where the obligee of such indebtedness acknowledges that same is subject to the subordination provisions of the Recapitalized Debt Intercreditor Agreement;

(vii)         [Intentionally omitted.]

(viii)        convertible unsecured subordinated notes issued subsequent to the Amendment No. 17 Effective Date in an amount and on terms acceptable to the Required Lenders in their sole discretion;

(ix)           preferred stock (to the extent classified as Indebtedness under GAAP);

(x)            [Intentionally omitted;]

(xi)           [Intentionally omitted;]

(xii)          [Intentionally omitted;]

SECTION 6.2.  Limitations on Liens.  Incur, create, assume or suffer to exist any Lien on any of the Collateral, whether now owned or hereafter acquired, except:

(i)            [Intentionally omitted];

(ii)           with regard to all items of Product, Liens pursuant to written security agreements (in form and substance acceptable to the Agent) in favor of guilds as required pursuant to terms of collective bargaining agreements, which Liens are (A) subordinated or junior to the claims of the Lenders hereunder pursuant to documentation that is satisfactory in form and substance to the Agent or (B) on terms otherwise acceptable to the Agent;

(iii)          deposits under workers’ compensation, unemployment insurance and Social Security laws or to secure statutory obligations or surety or appeal bonds or performance or other similar bonds in the ordinary course of business (other than completion bonds);

(iv)          Liens for taxes, assessments or other governmental charges or levies due and payable, the validity or amount of which is currently being contested in good faith by appropriate proceedings pursuant to the terms of Section 5.11 hereof;

(v)           Liens customarily granted or incurred in the ordinary course of business to secure payment for services rendered by laboratories and production houses and suppliers of materials and equipment;

(vi)          mechanic’s liens and Liens in connection with secured purchase money financings to the extent permitted in Section 6.1(ii) hereof;

(vii)         possessory Liens other than on Product or physical properties of Product (other than of laboratories and production houses) which (a) occur in the ordinary course of business, (b) secure normal trade debt which is not yet due and payable, (c) do not secure Indebtedness for borrowed money and (d) do not defer payment terms beyond 180 days;

(viii)        Liens arising out of attachments, judgments or awards as to which an appeal or other appropriate proceedings for contest or review are promptly commenced (and as to which foreclosure and other enforcement proceedings (a) shall not have been commenced (unless fully bonded or otherwise effectively stayed) or (b) in any event shall be promptly fully bonded or otherwise effectively stayed);

(ix)           Liens arising from zoning restrictions or easements;

(x)            the Liens of the Agent under this Agreement, the other Fundamental Documents and other documents contemplated hereby;