United states securities and exchange commission



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(b)      Credit Agreement; Notes . The Administrative Agent shall have received (i) executed counterparts of the Initial 2012 Credit Agreement, which, when taken together, bear the signatures of the Administrative Agent, each Lender, and the Credit Parties, and (ii) the Notes executed by the Borrower in favor of each Lender so requesting a Note.

(c)      Opinions of Counsel . The Administrative Agent shall have received the written opinions of (i) Liner Grode Stein LLP, as counsel to the Credit Parties and (ii) with respect to the due execution, delivery, authorization and enforceability of the Services Agreement, Wachtell, Lipton, Rosen & Katz, as counsel to the Servicer, in each case dated the Closing Date and addressed to the Administrative Agent and the Lenders, which opinions shall be in form and substance

reasonably satisfactory to the Administrative Agent.

(d)      No Material Adverse Effect . Since December 31, 2010, no change or development shall have occurred and no new information shall have been received or discovered by the Administrative Agent or the Lenders regarding any Credit Party (other than changes in general economic conditions) that either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

(e)      Insurance . The Credit Parties shall have furnished the Administrative Agent with (i) a summary of all existing insurance coverage in respect of the Credit Parties, (ii) evidence acceptable to the Administrative Agent that the insurance policies required by Section 5.5 have been obtained and are in full force and effect, and (iii) certificates of insurance with respect to all insurance coverage existing as of the Closing Date, which certificates shall name the Administrative Agent as an additional insured and/or loss payee and shall evidence compliance with Section 5.5.

(f)      Security and Other Documentation . The Administrative Agent shall have received fully executed (where applicable) copies of: (i) a Copyright Security Agreement, listing the copyright interests set forth on Schedule 3.8(a) , (ii) a Trademark Security Agreement, listing the trademarks set forth on Schedule 3.8(b) , (iii) appropriate UCC-1 financing statements that are required to be filed in order to perfect the Liens in the Collateral and the Pledged Collateral to the extent required by, and with the priority contemplated by, Section 3.18, (iv) Account Control Agreements for each deposit account of a Credit Party (including Collection Accounts maintained with Comerica but excluding the LGAC 1 Account) existing at a bank as of the Closing Date (to the extent not waived by the Administrative Agent in its sole discretion pursuant to Section 12.1(b)(xi)); provided , that with respect to any deposit account of a Credit Party that is subject to an Account Control Agreement in favor of the Administrative Agent prior to the Closing Date, with the approval of the Administrative Agent, a Refinancing Notice may be sent to such bank pursuant to Section 4.1(aa) hereof in lieu of execution of a new Account Control Agreement, (v) the Pledged Securities with appropriate undated stock powers executed in blank (or any comparable document for non-corporate entities to the extent certificated), other than ownership interests in the Borrower, and (vi) with respect to any guild which has been granted a Lien by any Credit Party prior to the Closing Date which has not been released, a notice sent to each such guild notifying it of the Lien granted to the Administrative Agent on all assets of the Credit Parties and which is otherwise in form and substance reasonably satisfactory to the Administrative Agent;

(g)      Security Interests in Copyrights and other Collateral . The Administrative Agent shall have received evidence satisfactory to it that each Credit Party and each Pledgor has sufficient right, title and interest in and to the Collateral and Pledged Collateral, respectively, and other assets that it purports to own (including appropriate licenses under copyright), as set forth in the documents and other materials presented to the Lenders, to enable the applicable Credit Party to perform the Distribution Agreements to which it is a party, and as to each Credit Party and each Pledgor, to grant to the Administrative Agent (for the benefit of the Secured Parties) the security interests contemplated by the Fundamental Documents.

(h)      Payment of Fees . All fees and expenses (which expenses have been set forth in reasonable detail in an invoice received by the Borrower), in each case, then due and payable by

the Borrower to the Administrative Agent, the Arrangers and/or the Lenders in connection with the transactions contemplated hereby, or as required by any fee letter in respect of the Facility, shall have been paid or shall be paid contemporaneously therewith.

(i)      Litigation . Except as disclosed on Schedule 3.12 , no litigation, inquiry, injunction or restraining order shall be pending, entered or threatened which could reasonably be expected to have a Material Adverse Effect.

(j)      Lien Searches . The Administrative Agent shall have received UCC, copyright office and other searches satisfactory to it covering the Collateral and Pledged Collateral located in the United States indicating that no other filings, encumbrances or transfers (other than in connection with Permitted Encumbrances) with regard to such Collateral and Pledged Collateral are of record in any jurisdiction in which it shall be necessary or desirable for the Administrative Agent to make a filing in order to provide the Administrative Agent (for the benefit of the Secured Parties) with a perfected security interest in the Collateral or Pledged Collateral located in the United States.

(k)      Material Agreements . The Administrative Agent shall have received a copy of or been given access to each agreement listed on Schedule 3.17 that has been requested by the Administrative Agent. The Administrative Agent shall be satisfied that the transactions contemplated hereby and by the other Fundamental Documents will not conflict with, or result in a default, breach or right of termination or acceleration under, any material agreement to which any Credit Party is a party, other than such as could not reasonably be expected to result in a Material Adverse Effect.

(l)      Contribution Agreement . The Administrative Agent shall have received a fully executed copy of the Contribution Agreement.

(m)      Notices of Assignment . To the extent not previously provided to the Administrative Agent, the Administrative Agent shall have received a copy of a Notice of Assignment duly executed by the appropriate Credit Party with respect to each material domestic Distribution Agreement, together with evidence that each such Notice of Assignment has been delivered to the applicable account debtor.

(n)      Acquisition . The Administrative Agent shall have received fully executed copies of (i) the Purchase Agreement and (ii) the Services Agreement, in each case in form and substance satisfactory to the Administrative Agent, and the Acquisition of the Borrower shall have been consummated simultaneously in accordance with the Purchase Agreement.

(o)      LG Intercreditor Agreement . The Administrative Agent shall have received a fully executed LG Intercreditor Agreement.

(p)      Debenture . The Administrative Agent shall have received (i) a Debenture executed by each of the U.K. Credit Parties, governed by English law, and in form and substance satisfactory to the Administrative Agent and (ii) an appropriate Form MG01 for filing in Companies House with respect to the U.K. Credit Parties.


(q)      Financial Statements . The Administrative Agent shall have received on or prior to the Closing Date true and complete copies of all of the financial statements referred to in Section 3.5.

(r)      ERISA . The Administrative Agent shall have received copies of all Plans of each Credit Party subject to Title IV of ERISA that are in existence on the Closing Date, and descriptions of those that are committed to as of the Closing Date.

(s)      Required Consents and Approvals . The Administrative Agent shall be reasonably satisfied that (i) all required consents and approvals have been obtained with respect to the transactions contemplated hereby from all Governmental Authorities with jurisdiction over the business and activities of the Credit Parties and from any other entity whose consent or approval the Administrative Agent in its reasonable discretion deems necessary to the transactions contemplated hereby, and (ii) all such consents and approvals remain in full force and effect.

(t)      Federal Reserve Regulations . The Administrative Agent shall be satisfied that the provisions of Regulations T, U and X of the Board will not be violated by the transactions contemplated hereby.

(u)      Compliance with Laws . The Administrative Agent shall be reasonably satisfied that the transactions contemplated hereby and by the other Fundamental Documents will not violate any provision of Applicable Law, or any order of any court or other agency of the United States of America or any state thereof applicable to any of the Credit Parties or any of their respective properties or assets.

(v)      Closing Date Permitted Distribution Documentation . The Administrative Agent shall have received from the Borrower copies of any resolutions and other corporate documentation, and any solvency opinions and other analysis performed, in each case in connection with the Closing Date Permitted Distribution.

(w)      Approval of Counsel to the Administrative Agent . All legal matters incident to the Initial 2012 Credit Agreement and the other transactions contemplated hereby shall have been reasonably satisfactory to Morgan, Lewis & Bockius LLP, counsel to the Administrative Agent.

(x)      USA Patriot Act . The Administrative Agent shall have received any information requested by the Administrative Agent or any Lender that is required under or in connection with the USA Patriot Act.

(y)      Projections . The Administrative Agent shall have received satisfactory projections for the Borrower and its Subsidiaries through 2016.

(z)      Solvency Certificate . The Administrative Agent shall have received a Solvency Certificate executed by the Chief Financial Officer of the Borrower in form and substance satisfactory to the Administrative Agent.

(aa)      Refinancing Notices . The Administrative Agent shall be satisfied that


Refinancing Notices have been sent by the applicable Credit Parties in connection with third party agreements that will remain in place following the Closing Date.

(bb)      Other Documents . The Administrative Agent shall have received such other documentation and information as the Administrative Agent may reasonably request.

SECTION 4.2      Conditions Precedent in connection with Pictures . The commencement by a Credit Party or Co-Financing Venture Entity of principal photography on any Picture or the acquisition by a Credit Party or Co-Financing Venture Entity of any Picture (in either case for which a Credit Party may (or is required to) pay or contribute all or a portion of the Negative Cost), shall be subject to the satisfaction of the following conditions precedent:

(a)      the Credit Parties and the Special Purpose Producers shall not have had (directly or through a permitted Investment) Maximum Domestic Net Exposure of [**] or more for any Picture (other than the Twilight Franchise, sequels to any Picture previously released by the Credit Parties and one additional Picture per calendar year);

(b)      the Credit Parties and the Special Purpose Producers shall not have had (directly or through a permitted Investment), for any Picture, U.S. P&A of [**] or more (other than the Twilight Franchise and sequels to any Picture previously released by the Credit Parties);

(c)      the Credit Parties shall have satisfied the Performance Test (and shall provide a calculation demonstrating the same in form and substance reasonably satisfactory to the Administrative Agent);

(d)      if such Picture or an interest therein is to be produced or acquired, the requirements of Section 5.21 shall have been satisfied with respect to such Picture;

(e)      if such Picture is being co-financed by a third party, such Picture satisfies the requirements of a Co-Financed Picture;

(f)      default shall not have occurred and be continuing (after the expiration of any applicable cure period therefor) by the applicable Credit Party or the Approved Co-Financier under any provision of any document executed in connection with a Co-Financed Picture, as a result of which the Administrative Agent has determined that the Approved Co-Financier either will not be, or is not, obligated to advance its share of the Negative Cost of such Picture, unless (i) the Borrower has replaced such Approved Co-Financier with another Approved Co-Financier on substantially the same terms or terms more favorable to such Credit Party, in each case, within fifteen (15) Business Days of such determination, or (ii) the Borrower has demonstrated to the reasonable satisfaction of the Administrative Agent that the Borrower has sufficient liquidity to finance such Approved Co-Financier’s share of the Negative Cost for such Picture without exceeding the exposure tests set forth in Section 4.2(a) or (b), or (iii) such Approved Co-Financier has provided evidence reasonably satisfactory to the Administrative Agent that such Approved Co-Financier will fund its share of the Negative Cost for such Picture; and

(g)      an Approved Completion Guarantor shall not have disaffirmed its obligations

under any Approved Completion Bond required hereunder, and shall not have suffered an insolvency event of the type described in Sections 7.1(g) or (h), and an Approved Completion Bond shall not have been determined to be void or voidable prior to the Completion and delivery of the applicable Picture to the applicable Approved Domestic Distributor, in each case unless either (i) a replacement Approved Completion Bond containing substantially the same terms and conditions to payment shall have been executed within ten (10) Business Days; (ii) the Borrower can demonstrate to the satisfaction of the Administrative Agent that the applicable Picture will be Completed substantially as contemplated by the terms of the Approved Completion Bond; or (iii) the Credit Parties shall have abandoned the Picture with the approval of the Administrative Agent.

SECTION 4.3      Conditions Precedent to the Extension of the Loan . The obligations of the Lenders to make the Loan are subject to the following conditions precedent:

(a)      Notice . The Administrative Agent shall have received a Borrowing Notice with respect to such Borrowing as required by Section 2.2(b), duly executed by an Authorized Officer of the Borrower.

(b)      Representations and Warranties . The representations and warranties of each Credit Party set forth in Article 3 (as amended from time to time in accordance with Section 5.1(m)) and in the other Fundamental Documents shall be true and correct in all material respects on and as of the date of such Borrowing (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date) with the same effect as if made on and as of such date.

(c)      No Default or Event of Default . No Default or Event of Default shall have occurred and be continuing, nor shall any such Default or Event of Default occur as a result of the making of such Borrowing, or the application of the proceeds thereof.

Each request for a Borrowing shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing as to the matters specified in clauses (b) and (c) of this Section 4.3.

5.      AFFIRMATIVE COVENANTS

From the date hereof and for so long as the Commitments shall be in effect, any amount shall remain outstanding under any Note or any other Obligation shall remain unpaid or unsatisfied, each of the Credit Parties agrees that it will, and (to the extent required under Section 5.24) will cause each of its Subsidiaries and the Co-Financing Joint Venture Entities to:

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

(a)      Within one hundred twenty (120) days after the end of each fiscal year of Lions Gate Entertainment Corp. commencing with the fiscal year ending March 31, 2012, (i) the audited consolidated balance sheet of Lions Gate Entertainment Corp. and its subsidiaries, as at the end of, and the related consolidated statements of income, shareholders’ equity and cash flows for,

such fiscal year and the corresponding figures as at the end of, and for, the preceding fiscal year (if applicable), accompanied by an unqualified report and opinion of independent public accountants of nationally recognized standing as shall be retained by the Borrower and be reasonably satisfactory to the Administrative Agent (it being agreed that PricewaterhouseCoopers and Ernst & Young are satisfactory to the Administrative Agent), which report and opinion shall be prepared in accordance with generally accepted auditing standards relating to reporting and which report and opinion shall not be subject to any explanation, qualification or exception as to the scope of such audit and shall contain no material exceptions or qualifications except for qualifications relating to accounting changes (with which such independent public accountants concur) in response to FASB releases or other authoritative pronouncements, together with a certificate of an Authorized Officer of the Borrower, to the effect that such financial statements fairly present in all material respects the consolidated financial position of Lions Gate Entertainment Corp. and its Subsidiaries as at the dates indicated and the consolidated results of their operations for the periods indicated in conformity with GAAP and (ii) a schedule of consolidating information (“ Consolidating Financial Information ”) reflecting (x) the consolidated balance sheet, statements of income, shareholders equity and statements of cash flows of the Borrower and its Subsidiaries (it being understood that for the Lions Gate Entertainment Corp. fiscal year ended March 31, 2012, the Consolidating Financial Information of the Borrower will be for the period from the Closing Date through March 31, 2012), (y) the consolidated balance sheet, statements of income, shareholders equity and statements of cash flows of Lions Gate Entertainment Corp. exclusive of the Borrower and its Subsidiaries and (z) consolidating adjustments, if any. Such Consolidating Financial Information will be accompanied by a separate report and opinion of the accountants referred to above which indicates that such information has been subjected to the auditing procedures applied in their audit of the consolidated financial statements of Lions Gate Entertainment Corp. and, in the opinion of such accountants, is fairly stated in all material respects in relation to the consolidated financial statements of Lions Gate Entertainment Corp. taken as whole. The Consolidating Financial Information need only include comparative financial information for post-Acquisition periods.

(b)      (i) By no later than March 31, 2012, the unaudited consolidated balance sheet of the Borrower and its Consolidated Subsidiaries and the related unaudited consolidated statements of income, members’ equity and cash flows for, the calendar year ending December 31, 2011, and the corresponding figures, for the corresponding period, in the preceding calendar year, together with a certificate signed by an Authorized Officer of the Borrower, to the effect that such financial statements, while not examined by independent public accountants, reflect, in the opinion of the Borrower, all adjustments necessary to present fairly in all material respects the financial position of the Borrower and its Consolidated Subsidiaries as at the end of such calendar year and the results of operations for such calendar year then ended in conformity with GAAP, subject to normal year end audit adjustments and the absence of footnotes; and (ii) within sixty (60) days after the end of each of the first three (3) fiscal quarters of each fiscal year of Lions Gate Entertainment Corp., commencing with the fiscal quarter ending June 30, 2012, the unaudited consolidated balance sheet of the Borrower and its Consolidated Subsidiaries and the related unaudited consolidated statements of income, members’ equity and cash flows for, such fiscal quarter, and for the portion of the fiscal year through the end of such fiscal quarter and the corresponding figures, all as at the end of the corresponding quarter, and for the corresponding period, in the preceding fiscal year (if applicable, it being understood that periods prior to the Closing Date are not applicable), together with a certificate signed by an Authorized Officer of the Borrower, to the effect that such financial statements, while not examined by independent public accountants, reflect, in the opinion of the

Borrower, all adjustments necessary to present fairly in all material respects the financial position of the Borrower and its Consolidated Subsidiaries as at the end of the fiscal quarter and the results of operations for the fiscal quarter then ended in conformity with GAAP, subject to normal year end audit adjustments and the absence of footnotes.

(c)      Within one hundred twenty (120) days after the end of each fiscal year of the Borrower, a copy of the Business Plan for the then current fiscal year (with quarterly figures) and the subsequent full fiscal year (with annual figures), which the Borrower shall make available to any Lender upon request.

(d)      From time to time upon written request by the Administrative Agent to the Borrower, following Completion of a Picture, the then current Negative Cost statement for such Picture.

(e)      From time to time, upon the written request of the Administrative Agent, copies of regular periodic financial reports prepared by or for any Credit Party with respect to each Picture from the beginning of pre-production for any such Picture until such Picture is Completed.

(f)      Simultaneously with the delivery of the financial statements required under Section 5.1(a) and (b), a certificate of an Authorized Officer of the Borrower, in form and substance reasonably satisfactory to the Administrative Agent, (i) stating whether or not such Authorized Officer has knowledge, after due inquiry, of any condition or event which would constitute a Default or Event of Default and, if so, specifying the details of each such condition or event and any action taken or proposed to be taken with respect thereto, (ii) demonstrating in reasonable detail compliance with the provisions of Sections 6.10, 6.27 and 6.30, (iii) certifying that all filings required under Section 5.7 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(f), and also listing any recordation or registration number received by any Credit Party with respect to such filings or any prior filings that have not previously been provided pursuant to a certificate delivered under this Section 5.1(f), (iv) stating whether any change in GAAP or in the application thereof has occurred since the date of the most recent audited financial statements delivered to the Administrative Agent hereunder (or until the delivery of any audited financial statements hereunder, since the date of the unaudited quarterly financial statements referred to in Section 3.5) resulting in a change in the preparation of the financial statements accompanying such certificate, and specifying the effect of such change on such financial statements, (v) identifying all Subsidiaries of each Credit Party existing on the date of such certificate and indicating, for each such Subsidiary, whether such Subsidiary was formed or acquired since the end of the previous fiscal quarter and whether such Subsidiary is an Excluded Subsidiary, (vi) identifying any changes of the type described in Section 6.9 that have not been previously reported by a Credit Party, (vii) identifying any events that give rise to an obligation by the Borrower hereunder to prepay all or any portion of the Loans that have occurred since the end of the previous fiscal quarter and setting forth a reasonably detailed calculation of the amount of such prepayment obligation, (viii) attaching copies of any material debt instruments or other evidence of material Indebtedness incurred by any Credit Party since the date of the most recent certificate delivered under this Section 5.1(f), (ix) listing all bank accounts opened by or in the name of a Co-Financing Venture Entity since the later of the Closing Date and delivery of the most recent certificate delivered pursuant to this Section 5.1(f) and (x) with respect to the financial statements




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