0001144204-12-070298.txt : 20121231 0001144204-12-070298.hdr.sgml : 20121231 20121231161555 ACCESSION NUMBER: 0001144204-12-070298 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20121231 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20121231 DATE AS OF CHANGE: 20121231 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOLLYWOOD MEDIA CORP CENTRAL INDEX KEY: 0000912544 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 650385686 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14332 FILM NUMBER: 121293702 BUSINESS ADDRESS: STREET 1: 2255 GLADES RD STREET 2: STE 237 W CITY: BOCA RATON STATE: FL ZIP: 33431 BUSINESS PHONE: 5619988000 MAIL ADDRESS: STREET 1: 2255 GLADES RD STREET 2: STE 237 W CITY: BOCA RATON STATE: FL ZIP: 33431 FORMER COMPANY: FORMER CONFORMED NAME: HOLLYWOOD COM INC DATE OF NAME CHANGE: 20000511 FORMER COMPANY: FORMER CONFORMED NAME: BIG ENTERTAINMENT INC DATE OF NAME CHANGE: 19930924 8-K 1 v331168_8k.htm FORM 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of report (Date of the earliest event reported)		December 31, 2012

HOLLYWOOD MEDIA CORP.

(Exact Name of Registrant as Specified in Its Charter)

Florida	1-14332	65-0385686

(State or Other Jurisdiction	(Commission File	(IRS Employer
of Incorporation)	Number)	Identification No.)

2255 Glades Road, Suite 221A,
Boca Raton, Florida		33431

(Address of Principal Executive Offices)		(Zip Code)

(561) 998-8000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230 .425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 1 - Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement.

On December 31, 2012, Hollywood Media Corp. (“Hollywood Media”) entered into Amendment No. 2 (the “Amendment”) to that certain Second Lien Credit, Security and Pledge Agreement, dated as of December 15, 2010, as amended by that Amendment No. 1 to Second Lien Credit, Security and Pledge Agreement, dated as of April 22, 2012 (the “Credit Agreement”), by and among Key Brand Entertainment Inc. (“Key Brand”), Theatre Direct NY, Inc. (“Theatre Direct”), and Hollywood Media. Pursuant to the Amendment, (i) effective as of December 31, 2012, the interest rate on the loan from Hollywood Media to Key Brand under the Credit Agreement (the “Loan”) was increased from 12% per annum to 13% per annum, (ii) the maturity date of the Loan was shortened from December 15, 2015 to June 30, 2015, (iii) Hollywood Media consented to Key Brand amending and restating Key Brand’s senior secured credit agreement to replace Key Brand’s prior senior lender, JPMorgan Chase Bank, N.A., with Key Brand’s new senior lender, Terido LLP (with the terms and conditions of such senior secured credit agreement remaining substantially the same), (iv) subject to the terms and conditions of the Intercreditor Agreement described below, the net proceeds from any indebtedness incurred by Key Brand that is not otherwise permitted under Key Brand’s amended and restated senior secured credit agreement (other than from the proceeds of a refinancing of such amended and restated senior secured credit agreement) will be used to prepay the Loan, (v) the prior consent of Hollywood Media is required for any amendment to Key Brand’s amended and restated senior secured credit agreement that would be adverse to Hollywood Media in any material respect, and (vi) Key Brand will provide Hollywood Media with additional and more frequent financial reporting.

Except as described in the preceding paragraph, the terms and conditions of the Credit Agreement and the Loan remain substantially the same. On December 31, 2012, Hollywood Media received a scheduled payment under the Loan in the amount of $1,002,128 (which included a principal payment of $538,462 and an interest payment of $463,666). As of December 31, 2012, following the payment described in the preceding sentence, the principal amount of the Loan due Hollywood Media by Key Brand was $14,961,538.

In connection with the Amendment and Key Brand’s amended and restated senior secured credit agreement, Hollywood Media and Key Brand entered into that certain Subordination and Intercreditor Agreement, dated December 31, 2012 (the “Intercreditor Agreement”), with Terido LLP, as administrative agent for the senior secured lenders of Key Brand, which defines the rights and obligations of the senior secured lenders and Hollywood Media as subordinated lender, including, without limitation, the rights of payment and the subordination of the security interests of Hollywood Media. The terms and conditions of the Intercreditor Agreement are substantially similar to the terms and conditions of the prior subordination and intercreditor agreement among Hollywood Media, Key Brand and JPMorgan Chase Bank, N.A.

On December 31, 2012, in connection with the Amendment, that certain warrant to purchase shares of common stock of Theatre Direct issued by Theatre Direct to Hollywood Media on December 15, 2010 (the “Warrant”) was amended to (i) shorten the earliest date that Hollywood Media can put the Warrant to Theatre Direct from December 16, 2017 to June 30, 2015, (ii) increase the minimum price that Hollywood Media can put the Warrant to Theatre Direct from $1,000,000 to $3,000,000, and (iii) increase the minimum price that Theatre Direct can redeem the Warrant from Hollywood Media from $1,000,000 to $3,000,000. Except as described in the preceding sentence, the terms and conditions of the Warrant remain substantially the same.

In connection with the transactions and agreements described above, Key Brand paid Hollywood Media an amendment fee of $50,000 and reimbursed Hollywood Media for all out-of-pocket costs and expenses incurred in documenting such agreements.

The foregoing description of the Amendment, the Intercreditor Agreement, and the amendment to the Warrant is a summary only and is qualified by reference to the full text of the Amendment, the Intercreditor Agreement, and the amendment to the Warrant, each of which are respectively filed as Exhibits 10.1, 10.2, and 10.3 to this current report on Form 8-K and are incorporated by reference herein.

SECTION 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(a)

Financial Statements of Businesses Acquired.

Not applicable.

(b)

Pro Forma Financial Information.

Not applicable.

(c)

Shell Company Transactions.

Not applicable.

(d)

Exhibits.

Exhibit Number		Description

10.1		Amendment No. 2 to Second Lien Credit, Security and Pledge Agreement, dated as of December 31, 2012, by and among Key Brand Entertainment Inc., Theatre Direct NY, Inc., and Hollywood Media Corp.

10.2		Subordination and Intercreditor Agreement, dated as of December 31, 2012, among Terido LLP, Hollywood Media Corp., and Key Brand Entertainment Inc.

10.3		Amendment to the Warrant to Purchase Shares of Common Stock of Theatre Direct NY, Inc. dated December 31, 2012

SIGNATURE

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

	Hollywood Media Corp.
Date: December 31, 2012
	By:	/s/ Tammy G. Hedge
		Name: Tammy G. Hedge
		Title: Chief Financial Officer and Chief Accounting Officer

EXHIBIT INDEX

Exhibit Number		Description

10.1		Amendment No. 2 to Second Lien Credit, Security and Pledge Agreement, dated as of December 31, 2012, by and among Key Brand Entertainment Inc., Theatre Direct NY, Inc., and Hollywood Media Corp.

10.2		Subordination and Intercreditor Agreement, dated as of December 31, 2012, among Terido LLP, Hollywood Media Corp., and Key Brand Entertainment Inc.

10.3		Amendment to the Warrant to Purchase Shares of Common Stock of Theatre Direct NY, Inc. dated December 31, 2012

EX-10.1 2 v331168_ex10-1.htm EXHIBIT 10.1

Exhibit 10.1

Execution Version

AMENDMENT NO. 2 TO
SECOND LIEN CREDIT, SECURITY AND PLEDGE AGREEMENT

AMENDMENT NO. 2 TO SECOND LIEN CREDIT, SECURITY AND PLEDGE AGREEMENT, dated as of December 31, 2012 (this “Amendment”), is by and among KEY BRAND ENTERTAINMENT INC. a Delaware corporation (the “Borrower”), THEATRE DIRECT NY, INC., a Delaware corporation (the “Company”) and HOLLYWOOD MEDIA CORP., a Florida corporation (the “Lender”).

WITNESSETH:

WHEREAS, the Borrower, the Company, and the Lender are parties to that certain Second Lien Credit, Security and Pledge Agreement, dated as of December 15, 2010 (as amended by that certain Amendment No. 1 to Second Lien Credit, Security and Pledge Agreement, dated as of April 22, 2012, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Credit Agreement);

WHEREAS, the Borrower is prepaying all indebtedness and other obligations outstanding under that certain Credit, Security, Pledge and Guaranty Agreement, dated as of January 23, 2008, among the Borrower, certain of its other subsidiaries party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent and as Issuing Bank (as amended, restated, supplemented or otherwise modified from time to time, the “Existing Senior Credit Agreement”), in whole or in part with loan proceeds received from certain lenders pursuant to that certain Credit, Security, Pledge and Guaranty Agreement, being entered into as of the date hereof, among the Borrower, certain of its other subsidiaries party thereto, the lenders party thereto and Terido LLP, in its capacity as Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “New Senior Credit Agreement”);

WHEREAS, the Borrower has requested that certain amendments be made to the Credit Agreement and for the Borrower, the Lender and the Senior Administrative Agent (as defined in Section 1 below) to enter into a Subordination and Intercreditor Agreement, in each case, to reflect the execution of the New Senior Credit Agreement; and

WHEREAS, subject to the terms and conditions set forth below, the Lender has agreed to consent to such amendments, as more particularly set forth below.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, the parties hereto agree as follows:

1. Amendments to Definitions.

(a) Article 1 (Definitions) of the Credit Agreement is hereby amended by adding the following new definitions in their proper alphabetical order:

“Fiscal Month” shall mean any of the monthly accounting periods of the Credit Parties.

“Fiscal Year” shall mean any of the annual accounting periods of the Credit Parties ending on June 30 of each year.

“Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56.

“Second Amendment” shall mean that certain Amendment No. 2 to Second Lien Credit, Security and Pledge Agreement, dated as of the Second Amendment Effective Date, among the Borrower, the Company and the Lender.

“Second Amendment Effective Date” shall mean December 31, 2012.

“Senior Administrative Agent” shall mean Terido LLP, or any other Person acting in the capacity of administrative agent under the Senior Credit Agreement, and its or their successors and assigns.

“Senior Credit Agreement” shall mean that certain Credit, Security, Pledge and Guaranty Agreement, dated as of December 31, 2012, among the Borrower, certain of its other subsidiaries party thereto, the lenders party thereto and the Senior Administrative Agent, as amended, restated, supplemented or otherwise modified, renewed, refinanced or replaced from time to time in accordance with the terms of this Credit Agreement. Any reference to the “Senior Credit Agreement” hereunder shall be deemed to be a reference to the Senior Credit Agreement then in effect.

“Senior Obligations” shall have the meaning given to the term “Obligations” in the Senior Credit Agreement.

(b) Article 1 (Definitions) of the Credit Agreement is hereby amended by amending and restating the definition of “Intercreditor Agreement” in its entirety as follows:

“Intercreditor Agreement” shall mean that certain subordination and intercreditor agreement, dated as of the Second Amendment Effective Date, by and among the Senior Administrative Agent, the Lender and the Borrower, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and this Credit Agreement.

(c) Article 1 (Definitions) of the Credit Agreement is hereby amended by amending and restating the definition of “Maturity Date” in its entirety as follows:

“Maturity Date” shall mean June 30, 2015.”

2. Other Amendments to the Credit Agreement.

(a) Section 2.4 (Reduction of the Loan; Mandatory Repayments) of the Credit Agreement is hereby amended by inserting the following new sub-clause (d) immediately after the existing sub-clause (c) therein:

“(d) Subject to the Intercreditor Agreement, upon the incurrence or issuance of any Indebtedness prohibited to be incurred or issued pursuant to Section 6.1, but excluding any Indebtedness incurred or issued on one or more occasions for the purpose of refinancing or replacing the Senior Obligations under the Senior Credit Agreement, the Borrower shall immediately prepay the Facility in an amount equal to the lesser of (i) the amount of principal of and interest on the Loan outstanding, and any other amounts due and unpaid thereunder, in each case as of such date of prepayment and (ii) 100% of the net proceeds of such incurrence or issuance.”

(b) Section 2.5 (Interest) of the Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“Section 2.5 Interest.

(a) Interest shall be payable (i) from the Closing Date until (but excluding) the Second Amendment Effective Date at a rate per annum equal to twelve per cent (12%) and (ii) from and after the Second Amendment Effective Date at a rate per annum equal to thirteen per cent (13%) (in each case computed on the basis of the actual number of days elapsed over a year of 360 days). Interest shall be payable on each applicable Interest Payment Date and on the Maturity Date.

(b) Anything in this Credit Agreement or the Note to the contrary notwithstanding, the interest rate on the Loan shall in no event be in excess of the maximum permitted by Applicable Law.”

(c) The Credit Agreement is hereby amended by inserting the following new Sections 3.13 (Foreign Assets Control Regulations and Anti-Money Laundering), 3.14 (PATRIOT Act), 3.15 (Indebtedness) and 5.21 (OFAC) therein:

“Section 3.13 Foreign Assets Control Regulations and Anti-Money Laundering. The Borrower, each Credit Party and each Subsidiary of the Borrower and each Credit Party is and will remain in compliance in all material respects with all US economic sanctions laws, Executive Orders and implementing regulations as promulgated by the US Treasury Department’s Office of Foreign Assets Control (“OFAC”), and all applicable anti-money laundering and counter-terrorism financing provisions of the Bank Secrecy Act and all regulations issued pursuant to it. No Credit Party and no Subsidiary or Affiliate of a Credit Party (i) is a Person designated by the United States Government on the list of the Specially Designated Nationals and Blocked Persons (the “SDN List”) with which a US Person cannot deal with or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of US economic sanctions laws such that a US Person cannot deal or otherwise engage in business transactions with such Person or (iii) is controlled by (including without limitation by virtue of such person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any person or entity on the SDN List or a foreign government that is the target of US economic sanctions prohibitions such that the entry into, or performance under, this Credit Agreement or any other Fundamental Document would be prohibited under US law.”

“Section 3.14 Patriot Act. The Borrower, the Credit Parties, each of their Subsidiaries and each of their Affiliates are in compliance with (a) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto, (b) the Patriot Act and (c) other federal or state laws relating to “know your customer” and anti-money laundering rules and regulations. No part of the proceeds of any Loan will be used directly or indirectly for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.”

“Section 3.15 Indebtedness. All outstanding Indebtedness of each Credit Party as of the Second Amendment Effective Date (except for the Obligations) is described in Schedule 3.15 attached to the Second Amendment.”

“Section 5.21 OFAC. No Credit Party shall and no Credit Party shall permit any of its Subsidiaries to fail to comply with the laws, regulations and executive orders referred to in Sections 3.13 and 3.14.”

(d) Section 5.1 (Financial Statements and Reports) of the Credit Agreement is hereby amended by deleting such section (and its sub-clauses) in its entirety and replacing it with the following:

“Section 5.1 Financial Statements and Reports. Furnish or cause to be furnished to the Lender in electronic or hard form:

(a) within one hundred twenty (120) days after the end of each Fiscal Year of the Borrower (or, in the case of the Fiscal Year ended June 30, 2012, on or before January 15, 2013) (or such earlier deadline as may apply to the Borrower under applicable securities laws), commencing with the Fiscal Year ending June 30, 2013, the audited consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as at the end of, and the related consolidated statements of income, stockholders’ equity and cash flows for, such Fiscal Year, and commencing with the Fiscal Year ending June 30, 2013, the corresponding figures as at the end of, and for, the preceding Fiscal Year, accompanied by an unqualified report and opinion of an independent public accountant retained by the Borrower and reasonably satisfactory to the Lender, provided, that each of Deloitte & Touche, KPMG, PricewaterhouseCoopers and Ernst & Young shall be deemed to be satisfactory, which report and opinion shall be prepared in accordance with generally accepted auditing standards relating to reporting and which report and opinion 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 signed by an Authorized Officer of the Borrower and its Consolidated Subsidiaries, to the effect that such financial statements fairly present in all material respects the combined financial position of the Borrower and its Consolidated Subsidiaries as at the dates indicated and the results of their operations for the periods indicated in conformity with GAAP;

(b) within thirty (30) days after the end of each Fiscal Month of the Borrower, commencing with the Fiscal Month ending December 31, 2012, the unaudited consolidated balance sheet of (i) the Borrower and its Consolidated Subsidiaries and (ii) the Company and its Consolidated Subsidiaries, plus, in each case, the related unaudited consolidated statements of income, stockholders’ equity and cash flows for, such Fiscal Month, and for the portion of the Fiscal Year through the end of such Fiscal Month and the corresponding figures, all as at the end of such Fiscal Month, and for the corresponding period, in the preceding Fiscal Year, together with a certificate signed by an Authorized Officer of the Borrower or the Company, as applicable, to the effect that such financial statements, while not examined by independent public accountants, reflect, in the opinion of the Borrower or the Company, as applicable, all adjustments necessary to present fairly in all material respects the financial position of (x) the Borrower and its Consolidated Subsidiaries and (y) the Company and its Consolidated Subsidiaries, in each case as at the end of the Fiscal Month and the results of operations for the Fiscal Month then ended in conformity with GAAP, subject to normal year-end audit adjustments and the absence of footnotes;

(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 reasonably satisfactory to the Lender, (i) stating whether or not such Authorized Officer has actual knowledge, after due inquiry, of any condition or event which would constitute an Event of Default or Default and, if so, specifying each such condition or event, the nature thereof and any action taken or proposed to be taken with respect thereto, (ii) certifying that all filings required under Section 5.6 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), (iii) 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 Lender hereunder and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate, (iv) identifying any changes of the type described in Section 6.9 that have not been previously reported by a Credit Party and (v) setting forth the Borrower’s calculations showing compliance or non-compliance with the covenants in Sections 6.14 and 6.15 of the Senior Credit Agreement;

(d) within ten (10) Business Days of receipt thereof by a Credit Party, copies of all management letters issued to such Person by its auditors;

(e) promptly upon their becoming available, copies of (i) all registration statements, proxy statements, notices and reports any Credit Party shall file with any securities exchange or with the Securities and Exchange Commission or any successor agency, if any, and (ii) all reports, financial statements, press releases and other information which any Credit Party shall release, send or make available to its common Equity Interest holders generally simultaneously with its distribution to the Borrower’s management;

(f) within sixty (60) days of the end of each of the first three Fiscal Quarters of each Fiscal Year and within one hundred and twenty (120) days of the end of each Fiscal Year, a brief narrative report by management outlining the business, financial condition and results of operations of the Credit Parties, in a form reasonably acceptable to the Lender;

(g) promptly, notice of any change in, or withdrawal of, the auditors from time to time engaged by the Credit Parties for the purposes of their periodic independent financial statement audits;

(h) promptly upon request therefor, any information required by the Lender under or in connection with the Patriot Act; and

(i) from time to time, as soon as reasonably practicable after request, such other information with respect to the Credit Parties that may be reasonably requested by the Lender.”

(e) Section 6.1(a) (Limitations on Indebtedness and Preferred Equity Interests) of the Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“(a) In the case of the Borrower, incur, create, assume or suffer to exist any preferred stock, preferred membership interest or Indebtedness which would cause the amount of Indebtedness to which the Obligations are subordinated in relative lien priority with respect to the TDI Collateral (as defined in the Intercreditor Agreement) to exceed $15,000,000 in the aggregate (plus all interest accrued thereon from and after the Second Amendment Effective Date), including amounts outstanding under the Senior Credit Agreement, as it may be amended, restated, supplemented or otherwise modified, renewed or replaced from time to time in accordance with the terms of this Credit Agreement.”

(f) Section 6.3(a) (Limitation on Guaranties) of the Credit Agreement is hereby amended such section in its entirety and replacing it with the following:

“(a) In the case of the Borrower, provide or suffer to exist any Guaranty (including any obligation as a general partner of a partnership or as a joint venturer of a Joint Venture in respect of Indebtedness of such partnership or Joint Venture), either directly or indirectly which would cause the amount of Indebtedness to which the Obligations are subordinated in relative lien priority with respect to the TDI Collateral (as defined in the Intercreditor Agreement) to exceed $15,000,000 in the aggregate (plus all interest accrued thereon from and after the Second Amendment Effective Date), including amounts outstanding under the Senior Credit Agreement, as it may be amended, restated, supplemented or otherwise modified, renewed or replaced from time to time in accordance with the terms of this Credit Agreement, except as permitted in Section 6.3 of the Senior Credit Agreement.”

(g) Section 6.12 (Amendment of Documents) of the Credit Agreement is hereby amended such section in its entirety and replacing it with the following:

"(a) Amend the constitutional documents of any Credit Party without the prior written consent of the Lender, (b) amend or waive any term or provision of the Senior Credit Agreement or any of the other documents delivered to the Senior Administrative Agent pursuant to the Senior Credit Agreement (collectively, the “Senior Loan Documents”) or (c) enter into any extension, refinancing or replacement of the Senior Obligations under the Senior Credit Agreement (on one or more occasions), in the case of clauses (b) and (c) that could reasonably be expected to (i) be adverse to the Lender in any material respect, or (ii) violate the covenants of the Senior Administrative Agent or the Borrower under the Intercreditor Agreement, in each case without the prior written consent of the Lender (such consent not to be unreasonably withheld). Notwithstanding the foregoing, the Borrower shall provide the Lender with a copy of all amendments, waivers or other modifications entered into with respect to the constitutional documents of any Credit Party or any Senior Loan Document as soon as reasonably practicable and in any event within two (2) Business Days after execution and delivery thereof."

(h) Section 7(n) (Events of Default) of the Credit Agreement is hereby amended such section in its entirety and replacing it with the following:

"(n) an event of default (howsoever described) under the Senior Credit Agreement shall have occurred and be continuing, or the Senior Administrative Agent shall have resigned thereunder and a replacement administrative agent not reasonably acceptable to the Lender shall have been appointed as a successor administrative agent (it being agreed that (i) Octopus Investments Limited (“OI”) or any lender (or affiliate of a lender) under the Senior Credit Agreement, (ii) affiliates of OI or other Persons, in each case that are managed by, controlled by or under common control with OI, or (iii) any commercial bank or other financial institution organized under the laws of the United States (or any state thereof or the District of Columbia), the United Kingdom or Canada (or any province or territory thereof), having a combined capital and surplus of at least $250,000,000 and that is (x) experienced and sophisticated in the entertainment industry lending market or (y) recognized as being active in the leveraged finance market, shall be an acceptable replacement administrative agent),"

(i) In the following provisions of the Credit Agreement, each reference in the Credit Agreement to the “JPM Credit Agreement” shall be deemed to refer to the “Senior Credit Agreement”:

(i) the definitions of “Cash Equivalents”, “Environmental Laws”, “Environmental Permit”, “Hazardous Materials”, “Net Available Proceeds”, “Net Cash Payments”, “Permitted Encumbrances” and “Release” in Article I; and

(ii) sub-clauses (a), (b), (c), (e) and (f) of Section 5.1, Sections 5.3, 5.5, 5.13(a), 5.14, 5.16, 6.2, 6.4, 6.5, 6.6, 6.8, 6.10, 6.13, 6.14, 6.15 and 11.3.

(j) In Sections 3.10(b), 5.16 (as to the second reference only), 10.1, 11.1 and 11.3 of the Credit Agreement, each reference to the “JPM Administrative Agent” shall be deemed to refer to the “Senior Administrative Agent”.

(k) In Section 6.3(b)(ii) of the Credit Agreement, the reference to “JPM Obligations” shall be deemed to refer to “Senior Obligations”.

3. Legend. The legend appearing on the cover page of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

“Notwithstanding anything herein to the contrary, the payment of and security for the principal amount of the indebtedness evidenced by this instrument and the interest accruing thereon is subject to the provisions of the Subordination and Intercreditor Agreement dated as of December 31, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”) by and among Key Brand Entertainment Inc., as Borrower, Hollywood Media Corp., as Subordinated Lender and Terido LLP, as Senior Agent. If there is a conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement will control.”

4. Interpretation. For purposes of this Amendment, all terms used herein which are not otherwise defined herein, including but not limited to, those terms used in the recitals hereto, shall have the respective meanings assigned thereto in the Credit Agreement as amended by this Amendment.

5. Consents. The Lender hereby acknowledges and consents to (i) the prepayment of all of the obligations and liabilities of the Borrower and its Subsidiaries under, and the termination of, the Existing Senior Credit Agreement and its replacement with the New Senior Credit Agreement and (ii) the execution and delivery of the New Senior Credit Agreement and the consummation of the transactions contemplated thereunder.

6. Conditions to Effectiveness. This Amendment shall not become effective until the date (the “Second Amendment Effective Date”) upon which:

(a) counterparts of this Amendment shall have been executed and delivered by the Borrower, the Company and the Lender;

(b) the Lender shall have received a certificate of Chief Executive Officer and/or the Chief Financial Officer of the Borrower certifying that, as of the Second Amendment Effective Date, no event or circumstance that could reasonably be expected to constitute a Material Adverse Effect shall have occurred with respect to the business, operations, performance, assets, properties or condition (financial or otherwise) of the Credit Parties taken as a whole since June 30, 2012;

(c) the Lender shall have received a certificate of the Chief Executive Officer and/or the Chief Financial Officer of the Borrower certify that the Borrower and the Credit Parties, on a consolidated basis, are Solvent (as defined in the Senior Credit Agreement) upon the consummation of the transaction contemplated by this Amendment and the incurrence of the Indebtedness under the New Senior Credit Agreement and all other transactions contemplated to occur in connection herewith and therewith;

(d) the Lender shall have received a certificate of Chief Executive Officer and/or the Chief Financial Officer of the Borrower certifying that, as of the Second Amendment Effective Date, no Default or Event of Default shall have occurred and is existing under the Credit Agreement;

(e) the Lender shall have received a fully executed copy of (i) the new Senior Credit Agreement, (ii) a fully completed Schedule 3.15 attached to this Amendment and (iii) the new Subordination and Intercreditor Agreement dated as of the date of this Amendment, among the Lender, the Borrower and the Senior Administrative Agent, each in form and substance reasonably acceptable to the Lender;

(f) the Lender shall have received evidence acceptable to it of the delivery of all Pledged Securities then held by the JPM Administrative Agent to the Senior Administrative Agent (but only to the extent required to be pledged under the terms of the Senior Credit Agreement), and assurances acceptable to the Lender that the Senior Administrative Agent has agreed to hold all such Pledged Securities as bailee for perfection for the Lender;

(g) the Lender shall have received written confirmation (which confirmation may be transmitted via email) from Ernst & Young that it is substantially complete with its audit of the financial statements of the Borrower and its Subsidiaries for the Fiscal Year ending June 30, 2012 substantially in the form of the drafts provided to the Lender for review upon consummation of the transactions contemplated by this Amendment and the Senior Credit Agreement and standard end stage audit procedures, which include updating subsequent events throughout the date of Ernst & Young’s opinion (including examining subsequent cash receipts and disbursements thorough the date of Ernst & Young’s opinion), final proofing of the financial statements by Ernst & Young’s creative services group, which could result in minor wording changes to the latest draft financials, and obtaining audit committee and management representation letters dated as of Ernst & Young’s opinion issue date, which confirmation shall include statements from Ernst & Young that they do not expect the opinion to be issued with any qualifications;

(h) the Lender shall have received a fully executed amendment to the Warrant to Purchase Shares of Common Stock of the Company (the “Warrant”), issued on December 15, 2010, pursuant to which (i) the date on which the put right of the Warrantholder (as defined thereunder) put right (the “Put”) to exercise the Warrant (as defined therein) is revised to match the Maturity Date under the Credit Agreement (as revised by the amendment in Section 1(c) above) and (ii) the minimum Put Price (as defined therein) is increased to $3,000,000;

(i) the Lender shall have received a copy of the Company’s refinancing plan for the Senior Credit Agreement, with detail and substance reasonably satisfactory to the Lender, including an extension of the maturity date thereof beyond September 30, 2013; and

(j) the Lender shall have received by wire transfer of immediately available funds (i) all reasonable out-of-pocket fees and expenses incurred by the Lender in connection with the transactions contemplated by this Amendment and the other documents related hereto, (ii) an amendment fee in an amount equal to $50,000 shall have been paid or shall be paid concurrently with the Second Amendment Effective Date and (iii) the scheduled December 31, 2012 payment of principal and accrued interest on the Loans of $1,002,128.00.

7. Representations and Warranties. The Borrower and the Company each represent and warrant that:

(a) after giving effect to this Amendment, each of the representations and warranties contained in the Credit Agreement are true and correct in all material respects on and as of the date hereof as if such representations and warranties had been made on and as of the date hereof (except to the extent that any such representations and warranties specifically relate to an earlier date, in which case they shall have been true and correct as of such earlier date); and

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

8. Confirmation of Obligations and Liens; Reaffirmation of Indemnity.

(a) The Borrower and each other Credit Party acknowledges and confirms that as of the Second Amendment Effective Date (before giving effect to the payments in Section 6(j) above), (i) the aggregate principal amount of the Loan is $15,500,000 (the “Confirmed Principal Balance”) and (ii) the unpaid interest accrued in accordance with the terms of the Credit Agreement on the Loan is $463,667, which amounts constitute valid and subsisting obligations of the Borrower to the Lender that are not subject to any credits, offsets, defenses, claims, counterclaims or adjustments of any kind. The foregoing amounts do not include any fees, expenses or other amounts that are chargeable or otherwise reimbursable under the Credit Agreement (as amended hereby), this Amendment or any other Fundamental Documents.

(b) Each of the Borrower and the other Credit Parties hereby (i) acknowledges its obligations under the Credit Agreement and the other Fundamental Documents, (ii) reaffirms that each of the Liens created and granted pursuant to the Credit Agreement and the other Fundamental Documents is valid and subsisting, and are perfected and of the priority required pursuant to the Credit Agreement and the other Fundamental Documents (including the Intercreditor Agreement) and (iii) acknowledges that this Amendment shall in no manner impair or otherwise adversely affect such Liens.

(c) Without in any way limiting their reaffirmations and acknowledgements set forth in Sections 8 and 9, the Borrower hereby expressly acknowledges, agrees and reaffirms its reimbursement, indemnification and other obligations set forth in Sections 13.4 and 13.5 of the Credit Agreement. The Borrower further acknowledges, agrees and reaffirms that all of such reimbursement, indemnification and other obligations and agreements set forth in Article 13 of the Credit Agreement shall survive the termination of the Credit Agreement and the other Fundamental Documents and the payment in full of the Obligations, but, in each case, solely to the extent expressly set forth in the Credit Agreement.

9. General Release.

(a) In consideration of, among other things, the Lender’s execution and delivery of this Amendment, the Borrower and each other Credit Party, on behalf of itself and on behalf of its agents, representatives, officers, directors, advisors, employees, affiliates, Subsidiaries, successors, assigns, legal representatives and financial advisors (the “Releasing Parties”), hereby jointly and severally releases, acquits and forever discharges (collectively, the “Releases”) the Lender and its subsidiaries, parents, affiliates, officers, directors, employees, agents, attorneys, financial advisors, successors and assigns, both present and former (collectively, the “Lender’s Affiliates” and together with the Lender, the “Releasees”) from any and all manner of actions, causes of action, suits, debts, controversies, damages, judgments, executions, claims and demands whatsoever, asserted or unasserted, in contract, tort, law or equity which any Releasing Party has or may have against the Lender and/or the Lender’s Affiliates by reason of any action, failure to act, matter or thing whatsoever arising from or based on facts occurring in each case prior to the date of this Amendment in respect of the Credit Agreement and the other Fundamental Documents, including but not limited to, any claim or defense that relates to, in whole or in part, directly or indirectly, (i) the making or administration of the Loan, including, without limitation, any such claims and defenses based on fraud, mistake, duress, usury or misrepresentation, or any other claim based on so-called “lender liability theories”, (ii) any covenants, agreements, duties or obligations set forth in the Credit Agreement or any other Fundamental Documents or this Amendment, (iii) any actions or omissions of the Lender and/or any of the Lender’s Affiliates in connections with the initiation or continuing exercise of any right or remedy contained in the Credit Agreement or any other Fundamental Documents or at law or in equity, (iv) lost profits, (v) loss of business opportunity, (vi) increased financing costs, (vii) increased legal or other administrative fees or (viii) damages to business reputation (collectively, the “Claims”).

(b) In entering into this Amendment, each of the Borrower and the other Credit Parties party hereto consulted with, and has been represented by, legal counsel and expressly disclaims any reliance on any representations, acts or omissions by any of the Releasees and each hereby agrees and acknowledges that the validity and effectiveness of the releases set forth herein do not depend in any way on any such representations, acts and/or omissions or the accuracy, completeness or validity hereof.

10. Full Force and Effect. Except as expressly amended hereby, the Credit Agreement shall continue unmodified and 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,” “this Credit Agreement,” “herein,” “hereafter,” “hereto,” “hereof” and words of similar import shall mean, unless the context otherwise requires, the Credit Agreement as modified and amended by this Amendment.

11. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed in such State without giving effect to the choice of law principles of such state that would require or permit the application of the laws of another jurisdiction.

12. Counterparts. This Amendment may be executed in multiple counterparts and by facsimile or other electronic means, each of which will be deemed to be an original copy of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement.

** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK **

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

HOLLYWOOD MEDIA CORP.

By:	/s/ Tammy Hedge
	Name:	Tammy Hedge
	Title:	CFO

KEY BRAND ENTERTAINMENT INC.

By:	/s/ John Gore
	Name:	John Gore
	Title:	President, Treasurer and CEO

THEATRE DIRECT NY, INC.

By:	/s/ John Gore
	Name:	John Gore
	Title:	CEO

[Signature Page to Amendment No. 2]

Schedule 3.15 - Indebtedness

Instrument / Description	12/31/2012

Senior Debt
JPM - Revolver		-
JPM - Letters of Credit, cash collateralized after closing		-
Senior facility, Terido LLP		26,000,000
Subtotal - Senior debt		26,000,000

Trade Financing (1)		45,000,000
HMC Seller Note (2)		15,500,000
GSBO Seller Note		916,667
Subtotal - Debt		87,416,667

Capital Lease		1,409,295
Insurance Premium Note		795,963
Other LT liabilities, warrant		3,384,085

Total	$	93,006,010

(1) Excludes accrued interest in the approximate amount of $9.6mm.

(2) Excludes accrued interest in the approximate amount of $0.5mm. Reflects balance before giving effect to the payments in Section 6(j) of the 2nd Amendment.

EX-10.2 3 v331168_ex10-2.htm EXHIBIT 10.2

Exhibit 10.2

SUBORDINATION AND INTERCREDITOR AGREEMENT

This Subordination and Intercreditor Agreement dated as of December 31, 2012 (this “Agreement”), among (i) TERIDO LLP as Administrative Agent (in such capacity, with its successors and assigns, and as more specifically defined below, the “Senior Agent”) for the Senior Creditors (as defined below), (ii) HOLLYWOOD MEDIA CORP., as the subordinated lender (the “Subordinated Lender”) under the Existing Subordinated Agreement referred to herein, and (iii) KEY BRAND ENTERTAINMENT INC., a Delaware corporation (the “Borrower”).

WHEREAS, the Borrower, the Senior Agent and certain financial institutions and other entities are parties to a Credit, Security, Pledge and Guaranty Agreement dated as of the date hereof (as amended, restated, modified and/or supplemented from time to time in accordance with the terms of this Agreement, the “Existing Senior Credit Agreement”), pursuant to which such financial institutions and other entities have agreed to make loans and extend other financial accommodations to the Borrower in a principal amount of up $26,000,000;

WHEREAS, the Borrower, the Subordinated Lender and other entities are parties to a Second Lien Credit, Security and Pledge Agreement dated as of December 15, 2010 (as amended, restated, modified and/or supplemented from time to time in accordance with the terms of this Agreement, the “Existing Subordinated Agreement”), pursuant to which the Subordinated Lender has made a secured term loan to the Borrower in the aggregate amount of up to $8,500,000, which loan is secured by, inter alia, the capital stock and assets of TDI (as defined below), a Subsidiary (as defined below) of the Borrower; and

WHEREAS, the Senior Creditors have agreed to enter into the Existing Senior Credit Agreement on the condition that the Subordinated Lender subordinates its security interests and certain rights of payment on the terms and conditions of this Agreement;

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency of which is expressly recognized by all of the parties hereto, the parties agree as follows:

SECTION 1. Definitions.

1.1 Defined Terms. The following terms, as used herein, have the following meanings:

“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended from time to time.

“Borrower” has the meaning set forth in the introductory paragraph hereof.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks are required or permitted to close in the State of New York.

“Collateral” means, at any time of determination, the Senior Collateral and all other property of any Loan Party in which each of the Senior Agent and the Subordinated Lender purportedly has, pursuant to the Senior Security Documents and the Subordinated Security Documents, respectively, a valid and perfected Lien (which Lien has not been avoided, disallowed, set aside, invalidated, or subordinated pursuant to Chapter 5 of the Bankruptcy Code or otherwise) securing payment of Senior Obligations or Subordinated Obligations, respectively, and including any Liens granted pursuant to Section 7 (Insolvency Proceedings) to secure both Senior Obligations and Subordinated Obligations.

“Combined Senior Collateral Sale” has the meaning set forth in Section 6.1(b).

“DIP Financing” has the meaning set forth in Section 7.2.

“Enforcement Action” means, with respect to the Senior Obligations or the Subordinated Obligations, the exercise of any rights and remedies with respect to any Senior Collateral or TDI Collateral, as applicable, securing such obligations or the commencement or prosecution of enforcement of any of the rights and remedies under, as applicable, the Senior Documents or the Subordinated Documents, or applicable law, including without limitation the exercise of any rights of setoff or recoupment, the exercise of any rights or remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy Code, the seeking of relief from the automatic stay or from any other stay in any Insolvency Proceeding, the conversion of any subsequent case under Chapter 11 of the Bankruptcy Code involving the Borrower or any other Loan Party to a case under Chapter 7 of the Bankruptcy Code, the dismissal of any case under Chapter 11 of the Bankruptcy Code under Section 1112 of the Bankruptcy Code or otherwise, and the appointment of a trustee under Chapter 7 or Chapter 11 of the Bankruptcy Code or of a responsible officer or an examiner with enlarged powers relating to the operation of the business (powers beyond those set forth in Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(d) of the Bankruptcy Code.

“Equity Interests” means shares of the capital stock, partnership interests, membership interests 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.

“Existing Senior Credit Agreement” has the meaning set forth in the first recital paragraph at the head of this Agreement.

“Existing Subordinated Agreement” has the meaning set forth in the second recital paragraph at the head of this Agreement.

“Insolvency Proceeding” means any proceeding in respect of bankruptcy, insolvency, winding up, receivership, dissolution or assignment for the benefit of creditors, in each of the foregoing events whether under the Bankruptcy Code or any similar federal, state or foreign bankruptcy, insolvency, reorganization, receivership or similar law.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, deed to secure debt, lien, pledge, hypothecation, assignment, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan Party” means the Borrower and each direct or indirect subsidiary (or equivalent) of the Borrower that is now or hereafter becomes a party to any Senior Document (including, without limitation, the TDI Group Parties). All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding.

“Permitted Subordinated Payments” means payments by the Borrower of (i) interest on the Subordinated Obligations upon the terms set forth in the Subordinated Agreement; (ii) fees and expenses due to the Subordinated Lender on the date hereof; and (iii) the Second Earnout Amount (as defined in the Existing Subordinated Agreement as of the date hereof) for the Earnout Year (as defined in the Existing Subordinated Agreement as of the date hereof) ending June 30, 2012 in equal quarterly installments over the term of the Loan (as defined in the Existing Subordinated Agreement as of the date hereof).

“Person” means any person, individual, sole proprietorship, partnership, joint venture, corporation, limited liability company, unincorporated organization, association, institution, entity, party, including any government and any political subdivision, agency or instrumentality thereof.

“Post-Petition Interest” means interest, fees, expenses and other charges that pursuant to the Senior Credit Agreement or the Subordinated Agreement continue to accrue after the commencement of any Insolvency Proceeding, whether or not such interest, fees, expenses and other charges are allowed or allowable under the Bankruptcy Code or in any such Insolvency Proceeding.

“Secured Parties” means the Senior Creditors and the Subordinated Creditors.

“Senior Agent” has the meaning set forth in the introductory paragraph hereof and any successor, assign or replacement thereof as administrative agent under a Senior Credit Agreement.

“Senior Collateral” means all assets, whether now owned or hereafter acquired by the Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any Senior Creditor as security for any Senior Obligation, including, without limitation, the TDI Collateral.

“Senior Credit Agreement” means the collective reference to (i) the Existing Senior Credit Agreement and (ii) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the Existing Senior Credit Agreement or any other agreement or instrument referred to in this clause (ii). Any reference to the Senior Credit Agreement hereunder shall be deemed a reference to any Senior Credit Agreement then extant.

“Senior Creditors” means the Senior Agent and the “Lenders”, as defined in the Senior Credit Agreement, and any other Persons that are designated under the Senior Credit Agreement as the “Senior Creditors” for purposes of this Agreement.

“Senior Default” means an Event of Default arising under, and as defined in, any Senior Credit Agreement.

“Senior Documents” means the Senior Credit Agreement, each Senior Security Document and each Senior Guarantee.

“Senior Guarantee” means any guarantee by any Loan Party of any or all of the Senior Obligations, whether contained in the Senior Credit Agreement or separately documented.

“Senior Lien” means any Lien created by the Senior Security Documents.

“Senior Obligations” means, subject to Section 11.3 hereof, all monetary obligations under the Senior Documents and any funding obligations of the Senior Agent (on behalf of the Senior Creditors) to any third party, in each case whether or not allowed or allowable in an Insolvency Proceeding including, without limitation, the disbursements and reasonable fees of counsel to the Senior Agent or the Senior Creditors, all obligations to reimburse or indemnify any Senior Creditor in any way, and all renewals, extensions, increases, restructurings, refinancings or refunding of any indebtedness under the Senior Documents in the nature of a “workout” or otherwise. To the extent any payment with respect to any Senior Obligation (whether by or on behalf of any Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential in any respect, avoided, set aside or required to be paid to a debtor in possession, trustee, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, be deemed to be reinstated and outstanding as if such payment had not occurred. To the extent that any interest, fees, expenses or other charges (including, without limitation, Post-Petition Interest) to be paid pursuant to the Senior Credit Agreement are disallowed by order of any court, including, without limitation, by order of a Bankruptcy Court in any Insolvency Proceeding, such interest, fees, expenses and charges (including, without limitation, Post-Petition Interest) shall, as between the Senior Creditors and the Subordinated Creditors, be deemed to continue to accrue and be added to the amount to be calculated as the “Senior Obligations”.

“Senior Obligations Repayment Date” means the first date on which (i) the Senior Obligations (other than those that constitute Unasserted Contingent Obligations) have been paid in full (or cash collateralized or defeased in accordance with the terms of the Senior Documents), and (ii) all commitments to extend credit under the Senior Documents have been terminated. The expressions “prior payment in full”, “payment in full, “paid in full” or any other similar term(s) or phrase(s) when used herein with respect to Senior Documents shall mean the occurrence of all events described in clauses (i) and (ii) of the definition of “Senior Obligations Repayment Date.”

“Senior Security Documents” means the “Fundamental Documents,” as defined in the Existing Senior Credit Agreement, as any of the same may be amended, supplemented, restated or otherwise modified from time to time, and any other documents from time to time securing the payment of the Senior Obligations.

“Senior TDI Collateral Limit” means, subject to the final sentence of Section 7.2(a), an amount equal to (x) the interest due and payable on $15,000,000 of the principal of the Senior Obligations plus (y) a principal amount of Senior Obligations of up to $15,000,000.

“Subordinated Agreement” means the collective reference to (i) the Existing Subordinated Agreement and (ii) any other credit agreement, loan agreement, securities purchase agreement, note purchase agreement, note agreement, promissory note, indenture, any other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the Existing Subordinated Agreement or any other agreement or instrument referred to in this clause (ii). Any reference to the Subordinated Agreement hereunder shall be deemed a reference to any Subordinated Agreement then extant.

“Subordinated Collateral” means all of the property of the Borrower and any TDI Group Party, whether real or personal, or mixed, as to which a Lien is granted as security for the Subordinated Obligations.

“Subordinated Creditors” means the Subordinated Lender, its successors and assigns, and any other holder from time to time of any Subordinated Obligations or any interest therein.

“Subordinated Default” means an Event of Default arising under, and as defined in, any Subordinated Agreement.

“Subordinated Documents” means each Subordinated Agreement, each Subordinated Security Document, each guarantee of the Subordinated Obligations by any TDI Group Party and each other document from time to time evidencing, securing or entered into in connection with the Subordinated Obligations.

“Subordinated Lender” has the meaning set forth in the introductory paragraph hereof but shall also include any Person identified as a lender or a creditor in any Subordinated Agreement other than the Existing Subordinated Agreement.

“Subordinated Lien” means any Lien created by the Subordinated Security Documents.

“Subordinated Obligations” means all monetary obligations of the Borrower or the TDI Group Parties under the Subordinated Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any Subordinated Obligation (whether by or on behalf of the Borrower or any TDI Group Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential in any respect, avoided, set aside or required to be paid to a debtor in possession, trustee, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred. Notwithstanding any other provision to the contrary hereof, (i) the term “Subordinated Obligations” will include accrued interest, fees, costs, and other charges incurred under the Subordinated Agreement and the other Subordinated Documents, whether incurred before or after commencement of an Insolvency Proceeding, and whether or not allowable in an Insolvency Proceeding, provided, that (ii) the term “Subordinated Obligations” will not include any purchase price, earnout, indemnification or other payments required to be made to Hollywood Media Corp., in its capacity as a “Selling Stockholder” under and pursuant to the Hollywood SPA (as defined in the Existing Subordinated Agreement).

“Subordinated Security Documents” means the “Fundamental Documents,” as defined in the Existing Subordinated Agreement, as any of the same may be amended, supplemented, restated or otherwise modified from time to time, and any other documents from time to time securing the payment of the Subordinated Obligations.

“Subsidiary” means, 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.

“TDI” means Theatre Direct NY, Inc.

“TDI Collateral” means all assets, whether now owned or hereafter acquired by any TDI Group Party, in which a Lien is granted or purported to be granted to any Senior Creditor or Subordinated Creditor as security for any Senior Obligation or Subordinated Obligation including, without limitation, all Equity Interests owned by the Borrower or any of its Subsidiaries in any TDI Group Party.

“TDI Group Parties” means, collectively, TDI and the TDI Subsidiaries and each, individually is, a “TDI Group Party”.

“TDI Subsidiaries” means, collectively, all of the wholly-owned Subsidiaries of TDI.

“Unasserted Contingent Obligations” means, at any time, Senior Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding (i) the principal of, and interest and premium (if any) on, and fees and expenses relating to, any Senior Obligation and (ii) contingent reimbursement obligations in respect of amounts that may be drawn under outstanding letters of credit) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether oral or written) has been made (and, in the case of Senior Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of New York.

1.2 Amended Agreements. All references in this Agreement to agreements or other contractual obligations shall, unless otherwise specified, be deemed to refer to such agreements or contractual obligations as amended, supplemented, restated or otherwise modified from time to time.

SECTION 2. Override.

2.1 This Agreement Prevails. Each Senior Creditor and Subordinated Creditor, as applicable, hereby agrees that to the extent there is any inconsistency between the terms of any Senior Document or Subordinated Document, as applicable, and this Agreement, this Agreement shall prevail.

SECTION 3. Payment Priorities.

3.1 Agreement to Subordinate. Each Subordinated Creditor agrees that the Subordinated Obligations are and shall be, except as provided herein, subordinate, junior and subject in right of payment, to the extent and in the manner hereinafter set forth, to the prior payment in full of the Senior Obligations. The expressions “prior payment in full”, “payment in full, “paid in full” or any other similar term(s) or phrase(s) when used herein with respect to Senior Documents shall mean the occurrence of all events described in clauses (i) and (ii) of the definition of “Senior Obligations Repayment Date.”

3.2 Restrictions on Payment of the Subordinated Obligations, etc.

(a) Except as otherwise expressly permitted herein, no Subordinated Creditor will ask, demand, sue for, take or receive, directly or indirectly, from a Loan Party, in cash or other property, by setoff, by realizing upon collateral, foreclosing on any lien or otherwise, by exercise of any remedies or rights under the Subordinated Documents or at law or by executions, garnishments, levies, attachments or by any other action relating to the Subordinated Obligations, or in any other manner, payment of, or additional security for (unless the Senior Creditors shall have received or shall also receive a corresponding senior security interest), all or any part of the Subordinated Obligations unless and until the Senior Obligations shall have been paid, provided that each Subordinated Creditor may receive, and the Borrower may pay (but not prepay) Permitted Subordinated Payments.

Notwithstanding the foregoing, Borrower may not make and Subordinated Creditors may not receive any Permitted Subordinated Payments or any other amount due with respect to the Subordinated Obligations if, at the time of such payment, (1) Borrower and Subordinated Lender shall have received written notice from Senior Agent stating that a Senior Default then exists and is continuing, (2) each such Senior Default shall not have been waived in writing by Senior Agent or cured in accordance with the terms of the Senior Documents and (3) 180 days shall not have elapsed since the date such notice was received (the period during which such conditions exists being referred to as a “Limited Blockage Period”).

(b) Borrower may resume making Permitted Subordinated Payments (and make any Permitted Subordinated Payments missed due to the existence of a Limited Blockage Period) in respect of the Subordinated Obligations upon the expiration of the Limited Blockage Period, whether by waiver in writing of the applicable Senior Default by Senior Agent or cure or expiration of the 180 day period with respect to the Limited Blockage Period.

(c) Notwithstanding any provision of this Section 3.2 to the contrary, the failure of Borrower to make any payment with respect to the Subordinated Obligations by reason of the operation of this subsection 3.2 shall not be construed as preventing the Subordinated Creditors from declaring a Subordinated Default in connection with such payment.

(d) Except as expressly permitted in Section 3.2(a) above, Borrower will not (and it will not allow any other Loan Party to) make any payment of any of the Subordinated Obligations, or take any other action, in contravention of the provisions of this Agreement.

3.3 Additional Provisions Concerning Payment Subordination. Each Subordinated Creditor and the Borrower agrees as follows:

(a) In the event of (x) any dissolution, winding up, liquidation or reorganization of any TDI Group Party (whether voluntary or involuntary and whether in bankruptcy, insolvency or receivership proceedings, or upon an assignment for the benefit of creditors or proceedings for voluntary or involuntary liquidation, dissolution or other winding up of that Loan Party, whether or not involving insolvency or bankruptcy, or any other marshalling of the assets and liabilities of that TDI Group Party or otherwise); or (y) any Senior Default or an event which with notice and/or passage of time would constitute a Senior Default, or any default, demand for payment or acceleration of maturity regarding the Subordinated Obligations:

(i) Senior Obligations in an amount up to the Senior TDI Collateral Limit shall first be paid to the Senior Agent for the benefit of the Senior Creditors before any payment or distribution is made upon or in connection with the Subordinated Obligations; and

(ii) Any payment or distribution of assets of any such TDI Group Party, whether in cash, property or securities to which any Subordinated Creditor would be entitled except for the provisions hereof, shall be paid or delivered by that TDI Group Party, or any receiver, trustee in bankruptcy, liquidating trustee, disbursing agent, agent or other Person making such payment or distribution, directly to the Senior Agent for the benefit of the Senior Creditors, to the extent necessary to pay an amount of the Senior Obligations remaining unpaid up to the Senior TDI Collateral Limit, after giving effect to any concurrent payment or distribution to the Senior Creditors before any payment or distribution is made to any Subordinated Creditor;

in each case, to be applied as specified in Section 6.1;

(b) In any proceeding referred to or resulting from any event referred to in subsection (a) of this Section 3.3 commenced by or against that TDI Group Party:

(i) Senior Agent may, and is hereby irrevocably authorized and empowered (in its own name or in the name of any Subordinated Creditor or otherwise), but shall have no obligation to, (A) demand, sue for, collect and receive every payment or distribution referred to in subsection (a) of this Section 3.3 and give acquittance therefor, (B) file claims and proofs of claim in respect of the Subordinated Obligations; provided, that the Senior Agent agrees not to file (and it shall have no right to file or vote) such proofs of claim without giving at least five (5) Business Days’ prior written notice to the Subordinated Lender, and (C) take such other action as the Senior Agent may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Senior Creditors hereunder;

(ii) Each Subordinated Creditor will duly and promptly take such action as the Senior Agent may reasonably request to accelerate and/or foreclose upon the Subordinated Obligations, to file appropriate claims or proofs of claim with respect thereto, to execute and deliver to the Senior Agent such powers of attorney, assignments or other instruments as the Senior Agent may reasonably request in order to enable it to enforce any and all claims with respect to the Subordinated Obligations, and to collect and receive any and all payments or distributions which may be payable or deliverable upon or with respect to the Subordinated Obligations for the account of the Senior Creditors;

(c) In the event of (x) any dissolution, winding up, liquidation or reorganization of the Borrower or any other Loan Party (other than a TDI Group Party) (whether voluntary or involuntary and whether in bankruptcy, insolvency or receivership proceedings, or upon an assignment for the benefit of creditors or proceedings for voluntary or involuntary liquidation, dissolution or other winding up of that Loan Party, whether or not involving insolvency or bankruptcy, or any other marshalling of the assets and liabilities of that Loan Party or otherwise); or (y) any Senior Default or an event which with notice and/or passage of time would constitute a Senior Default, or any default, demand for payment or acceleration of maturity regarding the Subordinated Obligations:

(i) All Senior Obligations shall first be paid to the Senior Agent for the benefit of the Senior Creditors in full before any payment or distribution is made upon or in connection with the Subordinated Obligations; and

(ii) Any payment or distribution of assets of any such Loan Party, whether in cash, property or securities to which any Subordinated Creditor would be entitled except for the provisions hereof, shall be paid or delivered by that Loan Party, or any receiver, trustee in bankruptcy, liquidating trustee, disbursing agent, agent or other person making such payment or distribution, directly to the Senior Agent for the benefit of the Senior Creditors, to the extent necessary to pay in full all Senior Obligations remaining unpaid, after giving effect to any concurrent payment or distribution to the Senior Creditors before any payment or distribution is made to any Subordinated Creditor;

provided that, notwithstanding the foregoing, with respect to any of the events described in the first paragraph of clause (c) above, with respect to that portion of the Borrower’s Collateral that is TDI Collateral, the proceeds of that portion of any such payment or distribution that is derived from the TDI Collateral shall be applied as specified in Section 6.1;

(d) In any proceeding referred to or resulting from any event referred to in subsection (c) of this Section 3.3 commenced by or against the Borrower or any other Loan Party (other than a TDI Group Party) and subject, in the case of the Borrower, to Section 6.1:

(i) Senior Agent may, and is hereby irrevocably authorized and empowered (in its own name or in the name of any Subordinated Creditor or otherwise), but shall have no obligation to, (A) demand, sue for, collect and receive every payment or distribution referred to in subsection (c) of this Section 3.3 and give acquittance therefor, (B) file claims and proofs of claim in respect of the Subordinated Obligations; provided, that the Senior Agent agrees not to file or vote (and it shall have no right to file or vote) such proofs of claim without giving at least five (5) Business Days’ prior written notice to the Subordinated Lender, and (C) take such other action as the Senior Agent may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Senior Creditors hereunder;

(e) All payments or distributions upon or with respect to the Subordinated Obligations which are received by any Subordinated Creditor contrary to the provisions of this Agreement shall be deemed to be the property of the Senior Creditors, shall be received in trust for the benefit of the Senior Creditors, shall be segregated from other funds and property held by such Subordinated Creditor and shall be forthwith paid over to the Senior Agent for the benefit of the Senior Creditors in the same form as so received (with any necessary endorsement) to be applied to the payment or prepayment of the Senior Obligations until the Senior Obligations shall have been paid in full;

(f) Any Subordinated Creditor hereby waives any requirement for marshalling of assets by the Senior Agent in connection with any foreclosure of any lien of the Senior Creditors under the Senior Documents;

(g) No Subordinated Creditor shall take any action to impair or otherwise adversely affect the foreclosure of, or other realization of the Senior Agent’s or the Senior Creditors’ rights under the Senior Documents; and

(h) Senior Agent is hereby authorized to demand specific performance of this Agreement at any time when any Subordinated Creditor shall have failed to comply with any of the provisions of this Agreement, and each Subordinated Creditor hereby irrevocably waives any defense based on the adequacy of a remedy at law which might be asserted as a bar to such remedy of specific performance.

3.4 Legend on Subordinated Documents; Transfer.

(a) The Borrower will cause each Subordinated Document to include the following language (or language to similar effect approved by the Senior Agent) and any other language Senior Agent reasonably requests to reflect the subordination of the Subordinated Liens effected hereby:

(b) Upon any sale, assignment or other transfer of the Subordinated Agreement or any interest therein, the transferor shall (i) provide a copy of this Agreement and the then applicable Senior Credit Agreement to the transferee and (ii) provide a written instrument to Senior Agent evidencing the transferee’s agreement to be bound hereby.

SECTION 4. Lien Priorities.

4.1 Seniority of Liens Securing Senior Obligations.

(a) A Senior Lien on the TDI Collateral securing any Senior Obligation will at all times be senior and prior in all respect to a Subordinated Lien on such TDI Collateral securing any Subordinated Obligation, and a Subordinated Lien on TDI Collateral securing any Subordinated Obligation will at all times be junior and subordinate in all respects to a Senior Lien on such TDI Collateral securing any Senior Obligation.

(b) Except as otherwise expressly provided herein, the priority of the Senior Liens securing Senior Obligations and the rights and obligations of the parties will remain in full force and effect irrespective of:

(i) how a Lien was acquired (whether by grant, possession, statute, operation of law, subrogation or otherwise);

(ii) the time, manner or order of the grant, attachment, or perfection of a Lien;

(iii) any conflicting provision of the Uniform Commercial Code, or other applicable law;

(iv) the modification of a Senior Obligation or a Subordinated Obligation;

(v) the modification of a Senior Document or a Subordinated Document;

(vi) the subordination of a Lien on Collateral securing a Senior Obligation to a Lien securing another obligation of a Loan Party or other Person that is permitted under the Senior Documents as in effect on the date hereof or secures a DIP Financing deemed consented by the Subordinated Creditors pursuant to Section 7.2;

(vii) the exchange of a security interest in any Collateral for a security interest in other Collateral; or

(viii) the commencement of an Insolvency Proceeding.

4.2 Acquisition of Liens and Guarantees.

(a) No Subordinated Creditor shall, without the prior written consent of the Senior Agent, accept any Lien (other than Liens on the TDI Collateral) securing the Subordinated Debt, acquire any right or interest in or to any property of the Borrower or any other Loan Party (other than Liens on the TDI Collateral) or accept any guaranties of the Subordinated Debt from the Borrower or any Loan Party (other than guaranties from the TDI Group Parties existing on the date of this Agreement). To the extent that any Lien on any property of the Borrower or any other Loan Party is obtained by any Subordinated Creditor by operation of law or in violation hereof, such Subordinated Creditor shall hold such Lien in trust for the Senior Agent and the Senior Creditors and shall, promptly upon demand by the Senior Agent on behalf of the Senior Creditors, assign all of its rights in respect of such Lien to Senior Agent on behalf of the Senior Creditors or, if directed by Senior Agent, release such Lien. Further, for so long as any such Lien may exist, it shall be expressly subordinated to any Lien securing the Senior Obligations.

(b) Until the Senior Obligations Repayment Date, and whether or not an Insolvency Proceeding has commenced, the Subordinated Creditors will not accept any Lien securing the Subordinated Debt, acquire any right or interest in or to any property of any TDI Group Party or accept any guaranties of the Subordinated Debt from any TDI Group Party unless such TDI Group Party grants to the Senior Creditors a Senior Lien or interest on such property to secure the Senior Obligations or a senior guaranty of the Senior Obligations, as applicable.

(c) Until the Senior Obligations Repayment Date, and whether or not an Insolvency Proceeding has commenced, the Senior Creditors will not accept any Lien securing the Senior Debt, acquire any right or interest in or to any property of any TDI Group Party or accept any guaranties of the Senior Debt from any TDI Group Party unless such TDI Group Party grants to the Subordinated Creditors a Subordinated Lien or interest on such property to secure the Subordinated Obligations or a junior guaranty of the Subordinated Obligations, as applicable.

4.3 No Senior Creditor shall object to or contest, or support any other Person in contesting or objecting to, in any proceeding (including without limitation, any Insolvency Proceeding), the validity, extent, perfection, priority or enforceability of any security interest in the TDI Collateral granted to the Subordinated Lender. No Subordinated Creditor shall object to or contest, or support any other Person in contesting or objecting to, in any proceeding (including without limitation, any Insolvency Proceeding), the validity, extent, perfection, priority or enforceability of any security interest in the Senior Collateral (including, without limitation, any TDI Collateral) granted to the Senior Agent. Notwithstanding any failure by any Senior Creditor or Subordinated Creditor to perfect its security interests in the Senior Collateral or the TDI Collateral, respectively, or any avoidance, invalidation or subordination by any third party or court of competent jurisdiction of the security interests in the Senior Collateral or TDI Collateral granted to the Senior Creditors or the Subordinated Creditors, respectively, the priority and rights as between the Senior Creditors and the Subordinated Creditors, respectively, with respect to the Senior Collateral and the TDI Collateral shall be as set forth herein.

4.4 Nature of Senior Obligations. The Subordinated Lender on behalf of itself and the other Subordinated Creditors acknowledges that a portion of the Senior Obligations may not be advanced to the Borrower on the date hereof and that the terms of the Senior Obligations may be modified, extended or amended from time to time but only in accordance with their terms and in accordance with the terms of the Subordinated Agreement as of the date hereof, and that, subject to the proviso in the next sentence of this Section 4.4, the aggregate amount of the Senior Obligations may be increased, replaced or refinanced and without notice to or consent by the Subordinated Creditors and without affecting the provisions hereof; provided that the holders of any such increased, replaced or refinanced indebtedness (or their agent) bind themselves in a writing addressed to Subordinated Creditors to the terms of this Agreement. Without limiting the generality of the foregoing, the Senior Obligations may, without the consent of the Subordinated Creditors, be increased to an amount in excess of the maximum amount available to be borrowed under the Existing Senior Credit Agreement or any other Senior Credit Agreement, and the Senior Liens may be increased in each case without affecting the provisions hereof; provided that the subordination of the Subordinated Liens to the Senior Liens provided in this Agreement shall not apply to the portion of any Senior Liens securing any amount due under loans included in the Senior Obligations in excess of the Senior TDI Collateral Limit.

4.5 Nature of Subordinated Obligations. Without limiting or superseding any restrictions in the Senior Documents from time to time, the Senior Agent on behalf of itself and the other Senior Creditors acknowledges that (a) the terms of the Subordinated Obligations may be modified, extended or amended from time to time in accordance with their terms, and that the aggregate amount of the Subordinated Obligations may be increased, replaced or refinanced and without notice to or consent by the Senior Creditors and without affecting the provisions hereof; provided, that the holders of any such increased, replaced or refinanced indebtedness (or their agent) bind themselves in a writing addressed to Senior Creditors to the terms of this Agreement and (b) the Subordinated Obligations may, without the consent of the Senior Creditors, be increased to an amount in excess of the maximum amount available to be borrowed under the Existing Subordinated Agreement or any other Subordinated Agreement, and, subject to Section 4.2(a), the Subordinated Liens may be increased in each case without affecting the provisions hereof.

4.6 Bailee for Perfection. The Senior Agent, on the one hand, and Subordinated Lender, on the other hand, acknowledges and agrees that to the extent that it (or its agent) retains physical possession or control of any of the Collateral, it (or its agent) shall hold such Collateral on behalf of the other so that for purposes of perfecting any Lien in any Collateral it acts and holds such Collateral on behalf of the Senior Agent and the Subordinated Lender. Nothing in this Section 4.6 shall affect the relative priorities in and to the Collateral, all of which shall be governed by Section 4.1 of this Agreement.

SECTION 5. Enforcement Rights.

5.1 Exclusive Enforcement.

(a) No Subordinated Creditor shall take, exercise or otherwise prosecute any action as an unsecured creditor with respect to the Senior Collateral (subject to the proviso at the end of Section 5.2). The Senior Creditors shall have the exclusive right to take, continue, oppose, or otherwise prosecute, defend, settle or consent to any Enforcement Action with respect to the Senior Collateral, without any consultation with or consent of any Subordinated Creditor and the Subordinated Creditors shall not take any position contrary to the Senior Creditors, or support any other Person who takes any position contrary to the Senior Creditors, with respect to such Enforcement Action, but subject to the proviso set forth in Section 7.1. Upon the occurrence and during the continuance of a Senior Default or an event which with notice and/or passage of time would constitute a Senior Default, the Senior Agent and the other Senior Creditors may take and continue any Enforcement Action with respect to the Senior Obligations and the Senior Collateral in such order and manner as they may determine in their sole discretion.

(b) Each of the parties hereto acknowledges and agrees that the Senior Collateral is a unique asset of the Borrower and the other Loan Parties the value of which is not readily ascertainable. In particular, the parties hereto acknowledge and agree that it will be commercially reasonable and sufficient for purposes of Article 9 of the UCC and applicable law for the Senior Agent to commence an Enforcement Action based upon any valuations or other financial information prepared by a third party and passed on by the Borrower to the Senior Agent.

5.2 Standstill and Waivers. The Subordinated Lender, on behalf of itself and the other Subordinated Creditors, agrees that, until the Senior Obligations Repayment Date, subject to the proviso set forth in Section 7.1:

(a) Without the prior written consent of the Senior Agent, they will not take or cause to be taken any action, the purpose or effect of which is to make any Lien in respect of any Subordinated Obligation pari passu with or senior to, or to give any Subordinated Creditor any preference or priority relative to, the Liens with respect to the Senior Obligations or the Senior Creditors with respect to any of the Senior Collateral;

(b) Without the prior written consent of the Senior Agent, they will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including without limitation the filing of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Senior Collateral by any Senior Creditor or any other Enforcement Action taken (or any forbearance from taking any Enforcement Action) by or on behalf of any Senior Creditor with respect to the Senior Collateral;

(c) They have no right to (i) direct either the Senior Agent or any other Senior Creditor to exercise any right, remedy or power with respect to the Senior Collateral or pursuant to the Senior Security Documents or (ii) consent or object to the exercise by the Senior Agent or any other Senior Creditor of any right, remedy or power with respect to the Senior Collateral or pursuant to the Senior Security Documents or to the timing or manner in which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (c), whether as a junior lien creditor or otherwise, they hereby irrevocably waive such right);

(d) Without the prior written consent of the Senior Agent, they will not institute any suit or other proceeding or otherwise assert in any suit, Insolvency Proceeding or other proceeding any claim against any Senior Creditor seeking damages from or other relief by way of specific performance, injunction or otherwise, with respect to, and no Senior Creditor shall be liable for, any action taken or omitted to be taken by any Senior Creditor with respect to the Senior Collateral or pursuant to the Senior Documents with respect to the Senior Collateral;

(e) Without the prior written consent of the Senior Agent, they will not make any judicial or nonjudicial claim or demand or commence any judicial or non-judicial proceedings or otherwise assert any remedy against any Loan Party or any of its subsidiaries or affiliates under or with respect to any Subordinated Security Document seeking payment or damages from or other relief by way of specific performance, injunction or otherwise under or with respect to any Subordinated Security Document (other than filing a proof of claim) or exercise any right, remedy or power under or with respect to, or otherwise take any action to enforce, other than filing a proof of claim, any Subordinated Security Document; provided, that in the case of any act by the Borrower constituting dishonesty or diversion or misappropriation of funds, the Subordinated Lender may to the extent permitted by the Subordinated Security Documents bring an action for damages, recovery of funds, specific performance or injunction in respect of such act (but not an action to foreclose any Subordinated Lien), provided, further, that any sum recovered or collected in any such action shall be segregated and held in trust and promptly paid over to the Senior Agent, for the benefit of the Senior Creditors pursuant to the terms of Section 6.1.

(f) Without the prior written consent of the Senior Agent, they will not commence judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of any Senior Collateral, exercise any right, remedy or power with respect to, or otherwise take any action to enforce their interest in or realize upon, the Senior Collateral or pursuant to the Subordinated Security Documents; and

(g) Without the prior written consent of the Senior Agent, they will not seek, and hereby waive, any right, to have the Senior Collateral or any part thereof marshaled upon any foreclosure or other disposition of the Senior Collateral;

provided that notwithstanding the foregoing, any Subordinated Creditor may exercise its rights and remedies in respect of the TDI Collateral under the Subordinated Security Documents or applicable law after the passage of a period of 180 days (the “Standstill Period”) from the date of delivery of a notice in writing to the Senior Agent of such Subordinated Lender’s intention to exercise such rights and remedies, which notice may only be delivered following the occurrence of and during the continuation of an “Event of Default” under and as defined in the Subordinated Agreement; provided, further, however, that, notwithstanding the foregoing, in no event shall any Subordinated Creditor exercise or continue to exercise any such rights or remedies if, notwithstanding the expiration of the Standstill Period, (i) any Senior Creditor shall have commenced and be diligently pursuing the exercise of any of its rights and remedies with respect to any of the TDI Collateral (prompt notice of such exercise to be given to the Subordinated Lender), (ii) an Insolvency Proceeding in respect of any TDI Group Party shall have been commenced or (iii) the acceleration of the Subordinated Obligations shall be rescinded in accordance with the terms of the Subordinated Agreement; and provided, further, that in any Insolvency Proceeding commenced by or against any TDI Group Party, the Subordinated Creditors may take any action expressly permitted by Section 7.

5.3 Judgment Creditors. In the event that any Subordinated Creditor becomes a judgment lien creditor in respect of Senior Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subject to the terms of this Agreement for all purposes (including in relation to the Senior Liens and the Senior Obligations) to the same extent as all other Liens securing the Subordinated Obligations subject to the terms of this Agreement.

5.4 Cooperation. Each Subordinated Creditor agrees that it shall take such actions as the Senior Agent shall reasonably request (at the Borrower’s expense) in connection with the exercise by the Senior Creditors of their rights set forth herein.

5.5 No Additional Rights For the Loan Parties Hereunder. Except as provided in Section 5.6, if any Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Loan Party shall be entitled to use such violation as a defense to any action by any Senior Creditor or Subordinated Creditor, nor to assert such violation as a counterclaim or basis for set off or recoupment against any Senior Creditor or Subordinated Creditor.

5.6 Actions Upon Breach.

(a) If any Subordinated Creditor, contrary to this Agreement, commences or participates in any action or proceeding against any Loan Party or any Senior Collateral, such Loan Party, with the prior written consent of the Senior Agent, may interpose as a defense, or the basis for an equitable or legal claim, or a dilatory plea the making of this Agreement, and any Senior Creditor may intervene and interpose such defense or plea in its or their name or in the name of such Loan Party.

(b) Should any Subordinated Creditor, contrary to this Agreement, in any way take, attempt to or threaten to take any action with respect to the Senior Collateral (including, without limitation, any attempt to realize upon or enforce any remedy with respect to this Agreement), or fail to take any action required by this Agreement (in its own name or in the name of the relevant Loan Party) this Agreement shall create an irrebutable presumption and admission by such Subordinated Creditor that relief against such Subordinated Creditor by injunction, specific performance and/or other appropriate equitable relief is necessary to prevent irreparable harm to the Senior Creditors, it being understood and agreed by the Subordinated Lender on behalf of each Subordinated Creditor that (i) the Senior Creditors’ damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Subordinated Creditor waives any defense that the Loan Parties and/or the Senior Creditors cannot demonstrate damage and/or be made whole by the awarding of damages.

5.7 No Consequential or Punitive Damages. Notwithstanding anything contained herein to the contrary, under no event shall any party hereto be entitled to any consequential or punitive damages in connection with any action commenced hereunder or in connection with any of the Senior Obligations or Subordinated Obligations.

SECTION 6. Application Of Proceeds Of Collateral; Inspection and Insurance.

6.1 Proceeds of TDI Collateral.

(a) Proceeds obtained from the sale or disposition of the TDI Collateral shall be allocated in the following order of priority (at the election of the Senior Lender the TDI Collateral may be used to repay the Senior Obligations before any other Senior Collateral is used to repay Senior Obligations):

(i) first, to Senior Agent for the benefit of the Senior Creditors until the Senior Agent has received an amount equal to the Senior TDI Collateral Limit;

(ii) second, to Subordinated Lender until the Subordinated Obligations are paid in full;

(iii) third, to Senior Agent for the benefit of the Senior Creditors until the Senior Obligations are paid in full; and

(iv) fourth, any remainder to the Borrower.

(b) In the event of any sale of Senior Collateral together with TDI Collateral in a single sale (a “Combined Senior Collateral Sale”), the proceeds of the TDI Collateral for purposes of this Section 6.1 shall be determined as follows:

(i) If the terms of the Combined Senior Collateral Sale allocate the purchase price thereof between the TDI Collateral included in the Combined Senior Collateral Sale and the other Senior Collateral included in the Combined Senior Collateral Sale, such allocation (net of transactions costs) shall be used for purposes of Section 6.1(a).

(ii) If the Senior Agent notifies the Subordinated Lender in writing that it has elected to do so, Senior Agent may appoint a nationally recognized appraiser or valuation consultant, not affiliated with Senior Agent, to determine the relative value of the TDI Collateral as a percentage of the value of all assets included in the Combined Senior Collateral Sale and the percentage of the net proceeds of the Combined Senior Collateral Sale shall be used for purposes of Section 6.1(a).

(iii) If neither Section 6.1(b)(i) nor Section 6.1(b)(ii) shall apply, the portion of the proceeds of the Combined Senior Collateral Sale attributable to the TDI Collateral shall equal the net proceeds of the Combined Senior Collateral Sale multiplied by a fraction, the numerator of which is the Senior TDI Collateral Limit and the denominator of which is the sum of the Senior Obligations and the Subordinated Obligations immediately prior to the Combined Senior Collateral Sale.

6.2 Turnover Provisions. Until the occurrence of the Senior Obligations Repayment Date, any Senior Collateral, including without limitation any such Senior Collateral constituting proceeds, that may be received by any Subordinated Creditor contrary to or in violation of this Agreement shall be segregated and held in trust and promptly paid over to the Senior Agent, for the benefit of the Senior Creditors (in accordance with Section 6.1), in the same form as received, with any necessary endorsements, and each Subordinated Creditor hereby authorizes the Senior Agent to make any such endorsements as agent for the Subordinated Lender (which authorization, being coupled with an interest, is irrevocable).

6.3 Inspection Rights and Insurance.

(a) The Subordinated Lender and the Subordinated Creditors agree that the Senior Creditors and their representatives and invitees may at any time inspect, repossess, remove and otherwise deal with the Senior Collateral, and the Senior Agent may advertise and conduct public auctions or private sales of the Senior Collateral, in each case without notice to, the involvement of or interference by the Subordinated Lender or any Subordinated Creditor or liability to the Subordinated Lender or any Subordinated Creditor.

(b) Until the Senior Obligations Repayment Date has occurred, the Senior Agent will have the sole and exclusive right (i) to be named as additional insured and loss payee under any insurance policies maintained from time to time by any Loan Party (except that the Subordinated Lender shall have the right to be named as additional insured and loss payee so long as its subordinated status is identified in a manner satisfactory to the Senior Agent); (ii) to reasonably adjust or settle any insurance policy or claim covering the Senior Collateral in the event of any loss thereunder; and (iii) to approve any award granted in any condemnation or similar proceeding affecting the Senior Collateral.

SECTION 7. Insolvency Proceedings.

7.1 Filing of Motions. Until the Senior Obligations Repayment Date has occurred, the Subordinated Lender agrees on behalf of itself and the other Subordinated Creditors that no Subordinated Creditor shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any of the Senior Collateral, including, without limitation, with respect to the determination of any Liens or claims held by the Senior Agent (including the validity and enforceability thereof) or any other Senior Creditor or the value of any claims of such parties under Section 506(a) of the Bankruptcy Code or otherwise; provided that the Subordinated Lender may file a proof of claim in an Insolvency Proceeding involving a Loan Party, subject to the limitations contained in this Agreement and only if consistent with the terms of this Agreement and the limitations on the Subordinated Lender imposed hereby.

7.2 Financing Matters.

(a) If any Loan Party becomes subject to any Insolvency Proceeding, and if the Senior Agent or the other Senior Creditors desire to consent (or not object) to the use of cash collateral under the Bankruptcy Code or to provide financing to any Loan Party under the Bankruptcy Code or to consent (or not object) to the provision of such financing to any Loan Party by any third party (any such financing, “DIP Financing”) then the Subordinated Lender agrees, on behalf of itself and the other Subordinated Creditors, that each Subordinated Creditor (i) will take no position contrary to the Senior Creditors, nor support any Person who takes a position contrary to the Senior Creditors with respect to the use of such cash collateral or to such DIP Financing, (ii) will be deemed to have consented to, will raise no objection to, nor support any other Person objecting to, the use of such cash collateral or to such DIP Financing, (iii) will not request or accept adequate protection or any other relief in connection with the use of such cash collateral or such DIP Financing except as set forth in paragraph 7.4 below, (iv) will subordinate (and will be deemed hereunder to have subordinated) the Subordinated Liens (x) to such DIP Financing on the same terms as the Senior Liens are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), (y) to any adequate protection provided to the Senior Creditors and (z) to any “carve-out” agreed to by the Senior Agent or the other Senior Creditors and (v) agrees that notice received two (2) calendar days prior to the entry of an order approving such usage of cash collateral or approving such financing shall be adequate notice. For the avoidance of doubt, any amounts advanced to a Loan Party as part of a DIP Financing shall not apply toward or be restricted by the Senior TDI Collateral Limit and shall not be subject to Section 6.1.

(b) If any Loan Party becomes subject to any Insolvency Proceeding, and if the Senior Agent or the other Senior Creditors objects to (or does not affirmatively consent to or support) the use of cash collateral under the Bankruptcy Code or to the provision of any DIP Financing, the Subordinated Lender agrees, on behalf of itself and the other Subordinated Creditors, that each Subordinated Creditor (i) will take no position contrary to the Senior Creditors, nor support any Person who takes a position contrary to the Senior Creditors with respect to the use of such cash collateral or to such DIP Financing, (ii) will not consent to, and upon request will join in any objection by the Senior Agent or other Senior Creditors to, the use of such cash collateral or to such DIP Financing, (iii) will not provide information to or otherwise act in concert with and, to the extent it may lawfully do so, permit any Person that it controls, is controlled by or is under common control with, to provide or participate in any such DIP Financing (provided, that an affiliate of any Subordinated Creditor or affiliate thereof who is also a Senior Creditor will not be precluded from participating in such DIP Financing to the extent that (1) such Subordinated Creditor or such affiliate remains a Senior Creditor at the time such Insolvency Proceeding is commenced and (2) the opportunity to so participate is generally offered to the Senior Creditors by the Senior Agent or an affiliate thereof) and (iv) agrees that notice received three (3) business days prior to the filing of any objection to such usage of cash collateral or approving such financing shall be adequate notice and sufficient time for the Subordinated Lender and the other Subordinated Creditors to join therein.

7.3 Relief From the Automatic Stay. The Subordinated Lender agrees, on behalf of itself and the other Subordinated Creditors, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in derogation thereof in each case in respect of any Senior Collateral, without the prior written consent of the Senior Agent.

7.4 Adequate Protection. The Subordinated Lender, on behalf of itself and the other Subordinated Creditors, agrees that none of them shall object, contest, or support any other Person objecting to or contesting, (i) any request by the Senior Agent or the other Senior Creditors for adequate protection or any adequate protection provided to the Senior Agent or the other Senior Creditors or (ii) any objection by the Senior Agent or the other Senior Creditors to any motion, relief, action or proceeding based on a claim of a lack of adequate protection or (iii) the payment of interest, fees, expenses or other amounts to the Senior Agent or any other Senior Creditor under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise. Notwithstanding anything contained in this Section and in Section 7.2(a)(ii) (but subject to all other provisions of this Agreement, including, without limitation, Sections 7.2(a)(i) and 7.3), in any Insolvency Proceeding, (x) if the Senior Creditors (or any subset thereof) are granted adequate protection consisting of additional collateral (with replacement liens on such additional collateral) and superpriority claims in connection with any DIP Financing or use of cash collateral, and the Senior Creditors do not object to the adequate protection being provided to the Senior Creditors, then in connection with any such DIP Financing or use of cash collateral the Subordinated Lender, on behalf of itself and any of the Subordinated Creditors, may seek or accept adequate protection consisting solely of (A) a replacement Lien on the same additional collateral, subordinated to the Liens securing the Senior Obligations and such DIP Financing on the same basis as the other Liens securing the Subordinated Obligations are so subordinated to the Senior Obligations under this Agreement and (B) superpriority claims junior in all respects to the superpriority claims granted to the Senior Creditors, and (y) in the event the Subordinated Lender, on behalf of itself and the Subordinated Creditors, seeks or accepts adequate protection in accordance with clause (x) above and such adequate protection is granted in the form of additional collateral, then the Subordinated Lender, on behalf of itself or any of the Subordinated Creditors, agrees that the Senior Agent shall also be granted a senior Lien on such additional collateral as security for the Senior Obligations and any such DIP Financing and that any Lien on such additional collateral securing the Subordinated Obligations shall be subordinated to the Liens on such collateral securing the Senior Obligations and any such DIP Financing (and all obligations relating thereto) and any other Liens granted to the Senior Creditors as adequate protection, with such subordination to be on the same terms that the other Liens securing the Subordinated Obligations are subordinated to such Senior Obligations under this Agreement. The Subordinated Lender on behalf of itself and the other Subordinated Creditors, agrees that except as expressly set forth in his Section none of them shall seek or accept adequate protection without the prior written consent of the Senior Agent.

7.5 Avoidance Issues.

(a) If any Senior Creditor is required in any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any Loan Party, because such amount was avoided or ordered to be paid or disgorged for any reason, including without limitation because it was found to be a fraudulent or preferential transfer, any amount (a “Recovery”), whether received as proceeds of security, enforcement of any right of setoff or otherwise, then the Senior Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the Senior Obligations Repayment Date shall be deemed not to have occurred. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. The Subordinated Creditors agree that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.

7.6 Asset Dispositions in an Insolvency Proceeding. Neither the Subordinated Lender nor any other Subordinated Creditor shall, in an Insolvency Proceeding, oppose any sale or disposition of any assets of any Loan Party that is supported by the Senior Creditors; provided, that the proceeds of such sale are applied as required by Section 6.1. No Subordinated Creditor shall exercise its rights under Section 363 of the Bankruptcy Code (and otherwise) with respect to any sale supported by the Senior Creditors in a manner which is inconsistent with the terms and conditions of this Agreement. Each Subordinated Creditor will be deemed to have consented to the consummation of any such sale approved by the Senior Creditors and shall be deemed to have released any Liens on such assets upon the consummation of any such sale.

7.7 Separate Grants of Security and Separate Classification. Each Secured Party acknowledges and agrees that (i) the grants of Liens pursuant to the Senior Security Documents and the Subordinated Security Documents constitute two separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Senior Collateral and the TDI Collateral, respectively, the Senior Obligations and the Subordinated Obligations are fundamentally different and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Senior Creditors and Subordinated Creditors in respect of the Senior Collateral and the TDI Collateral, respectively, constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the Subordinated Creditors hereby acknowledge and agree that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Loan Parties in respect of the TDI Collateral (with the effect being that, to the extent that the aggregate value of the TDI Collateral is sufficient (for this purpose ignoring all claims held by the Subordinated Creditors), the Senior Creditors shall be entitled to receive from the TDI Collateral, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest up to the Senior TDI Collateral Limit before any distribution is made in respect of the claims held by the Subordinated Creditors, with the Subordinated Creditors hereby acknowledging and agreeing to turn over to the Senior Creditors amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Subordinated Creditors).

7.8 No Waivers of Rights of Senior Creditors. Nothing contained herein shall prohibit or in any way limit the Senior Agent or any other Senior Creditor from objecting in any Insolvency Proceeding or otherwise to any action taken by any Subordinated Creditor not permitted hereunder, including the seeking by any Subordinated Creditor of adequate protection (except as provided in Section 7.4).

7.9 Plans of Reorganization. Unless the Senior Agent consents in writing otherwise, no Subordinated Creditor shall support or vote in favor of any plan of reorganization (and each shall vote to reject or have their votes designated as rejections of any plan of reorganization) unless such plan (i) results in a payment in cash from the proceeds of TDI Collateral of the Senior Obligations in an amount equal to at least the Senior TDI Collateral Limit or (ii) is accepted by the class of holders of Senior Obligations voting thereon and is supported by the Senior Agent.

7.10 Other Matters. To the extent that the Subordinated Lender or any Subordinated Creditor has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Senior Collateral, the Subordinated Lender agrees, on behalf of itself and the other Subordinated Creditors not to assert any of such rights without the prior written consent of the Senior Agent; provided that if requested by the Senior Agent, the Subordinated Lender shall timely exercise such rights in any manner reasonably requested by the Senior Agent, including any rights to payments in respect of such rights.

7.11 Effectiveness in Insolvency Proceedings. This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under section 510(a) of the Bankruptcy Code, has been entered into for good and valid consideration, and shall be effective before, during and after the commencement of any subsequently commenced Insolvency Proceeding.

SECTION 8. Additional Covenants.

8.1 Negative Covenants of Subordinated Creditors. Except as otherwise permitted herein, no Subordinated Creditor will, prior to the Senior Obligations Repayment Date, without the prior written consent of the Senior Agent:

(a) Sell, assign, pledge, encumber or otherwise dispose of any instrument evidencing the indebtedness owed to such Subordinated Creditor or any collateral securing the Subordinated Obligations unless such sale, assignment, pledge, encumbrance or other disposition is made expressly subject to this Agreement and the other party to such sale, assignment, pledge, encumbrance or other disposition consents in writing to be bound by the terms hereof;

(b) Permit the terms of the Subordinated Documents to be changed in any way that would increase the principal amount thereof, increase the interest payable thereon, accelerate or shorten any payment date thereunder, accept any additional collateral (unless, but subject to Section 4.2(a), the Senior Creditors shall have received or will receive a corresponding security interest in such collateral) or otherwise materially and adversely limit or impair the rights of the Senior Creditors or the obligations of the Subordinated Creditors hereunder;

(c) Declare all or any portion of the Subordinated Obligations due and payable prior to the date fixed therefor or realize upon, or otherwise exercise any remedies with respect to, any collateral securing the Subordinated Obligations or take any other action described in Section 3.2 hereof; or

(d) Commence, or join with any creditor other than the Senior Creditors in commencing any Insolvency Proceeding.

8.2 Effect of Senior Document Amendments.

(a) Subject to Section 11.3 hereof, in the event that the Senior Agent enters into any amendment, waiver or consent in respect of any of the Senior Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Security Document or changing in any manner the rights of any parties thereunder, then such amendment, waiver or consent shall apply automatically to any comparable provision of the Subordinated Security Documents without the consent of or action by any Subordinated Creditor (with all such amendments, waivers and modifications subject to the terms hereof); provided that (other than with respect to amendments, modifications or waivers that secure additional extensions of credit and add additional secured creditors), (i) no such amendment, waiver or consent shall have the effect of removing assets subject to the Lien of any Subordinated Security Documents, except to the extent that a release of such Lien is otherwise permitted under this Agreement, (ii) any such amendment, waiver or consent that materially and adversely affects the rights of the Subordinated Creditors and does not affect the Senior Creditors in a like or similar manner shall not apply to the Subordinated Security Documents without the consent of the Subordinated Lender and (iii) notice of such amendment, waiver or consent shall be given to the Subordinated Lender no later than thirty (30) days after its effectiveness, provided that the failure to give such notice shall not affect the effectiveness and validity thereof.

(b) Notwithstanding any other provision of this Agreement to the contrary (including, without limitation, this Section 8.2) or the rights of the Senior Agent to take actions which bind the Subordinated Creditors under the Existing Subordinated Agreement, none of the Subordinated Lender or any of the Subordinated Creditors shall be bound by or be required to consent to any additional agreement or any amendment or modification to an existing agreement which has the effect of (i) requiring the Subordinated Lender or any of the Subordinated Creditors to fund any additional amounts (including out-of-pocket expenditures), or (ii) adding any additional liabilities or obligations of a monetary nature to or on the Subordinated Lender or any of the Subordinated Creditors or (iii) adding any other obligation which would require prior regulatory approvals or filings (as opposed to ex post facto notifications to or filings with applicable regulators) or unlawful acts with respect to a Subordinated Creditor or its affiliates without the prior written consent of each such party who will be responsible for such additional amount, liability or obligation.

SECTION 9. Reliance; Waivers; etc.

9.1 Reliance. All extensions of credit under the Senior Documents are deemed to have been made or incurred, in reliance upon this Agreement. Each Subordinated Creditor expressly waives all notice of the acceptance of and reliance on this Agreement by the Senior Creditors. The Subordinated Documents are deemed to have been executed and delivered and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. The Senior Agent, for itself and on behalf of each other Senior Creditor, expressly waives all notices of the acceptance of and reliance by the Subordinated Creditors.

9.2 No Warranties or Liability. The Subordinated Lender and the Senior Agent acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any Senior Document or any Subordinated Document or the value of any collateral, including but not limited to the Senior Collateral and the TDI Collateral. Except as otherwise provided in this Agreement, the Subordinated Lender and the Senior Agent will be entitled to manage and supervise their respective extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.

9.3 No Waivers. No right or benefit of any party hereunder shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such party or any other party hereto or by any noncompliance by any Loan Party with the terms and conditions of any of the Senior Documents or the Subordinated Documents.

9.4 No Duty to Subordinated Creditors.

(a) Nothing contained herein shall operate to create a fiduciary duty on the part of any Senior Creditor for the benefit of any Subordinated Creditor or the Borrower. The Subordinated Creditors acknowledge and agree that the Senior Creditors have the right to take action adverse to the interests of the Subordinated Creditors hereunder and are authorized to do so and shall not thereby incur any liability to the Subordinated Creditors to the extent such action is consistent with the terms of this Agreement.

(b) Without limiting the generality of Section 9.4(a), the Subordinated Creditors agree that none of the Senior Creditors shall have any liability or obligation to the Subordinated Creditors on account of exercise of the rights and remedies of the Senior Agent and/or the other Senior Creditors under any Senior Document. The Subordinated Creditors waive the right to commence or pursue any legal action (whether suit, counterclaim, cross claim or other action) on account of exercise of the rights and remedies of the Senior Creditors under any Senior Document alleging, or based on a theory of, breach of fiduciary obligations of the Senior Agent and/or the other Senior Creditors, equitable subordination of claims of the Senior Creditors against the Borrower or any Loan Party, conflicts of interest by the Senior Creditors or similar theories premised in any such case on the exercise of control or influence on management by the Senior Agent and/or the other Senior Creditors, actual management or control of the Borrower or any Loan Party by the Senior Agent and/or the other Senior Creditors, or other pursuit of rights or remedies by the Senior Agent and/or the Senior Creditors under any Senior Document.

(c) The Subordinated Creditors hereby waive, to the fullest extent permitted by law, any right to equitable subordination of the Senior Lien or the Senior Creditors’ claims in respect of the Senior Obligations or rights in respect of the Senior Lien (whether under or pursuant to 11 U.S.C. § 510 or otherwise) and any right to assert that the Senior Agent or Senior Creditors have in any way failed to comply with the provisions of the Uniform Commercial Code, including the provisions of Article 9 thereof, notwithstanding a determination by a court of competent jurisdiction that the Subordinated Creditors shall be so entitled.

9.5 No Additional Subordinated Collateral. The Subordinated Creditors hereby (a) represent and warrant that they hold no Senior Collateral that is not TDI Collateral and (b) other than as permitted hereunder agree not to acquire any Senior Collateral that is not TDI Collateral until the Senior Obligations Repayment Date has occurred.

SECTION 10. Obligations Unconditional.

10.1 Senior Obligations Unconditional. All rights and interests of the Senior Creditors hereunder, and all agreements and obligations of the Subordinated Creditors (and, to the extent applicable, the Loan Parties) hereunder, shall remain in full force and effect irrespective of:

(i) any lack of validity or enforceability of any Senior Document;

(ii) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Senior Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Senior Document;

(iii) prior to the Senior Obligations Repayment Date, any exchange, release, voiding, avoidance or non-perfection of any security interest in any Senior Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the Senior Obligations or any guarantee or guaranty thereof;

(iv) the commencement of any Insolvency Proceeding; or

(v) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the Senior Obligations, or of any of the Subordinated Lender or any Subordinated Creditor, or any Loan Party, to the extent applicable, in respect of this Agreement.

10.2 Subordinated Obligations Unconditional. All rights and interests of the Subordinated Creditors hereunder, and all agreements and obligations of the Senior Creditors (and, to the extent applicable, the Loan Parties) hereunder, shall remain in full force and effect irrespective of:

(i) any lack of validity or enforceability of any Subordinated Document;

(ii) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Subordinated Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Subordinated Document;

(iii) any exchange, release, voiding, avoidance or non-perfection of any security interest in any TDI Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the Subordinated Obligations or any guarantee or guaranty thereof;

(iv) the commencement of any Insolvency Proceeding; or

(v) any other circumstances that otherwise might constitute a defense available to, or a discharge of any Loan Party in respect of the Subordinated Obligations, or any Senior Creditor in respect of this Agreement.

SECTION 11. Miscellaneous.

11.1 Conflicts. In the event of any conflict between the provisions of this Agreement and the provisions of any Senior Document or any Subordinated Document, the provisions of this Agreement shall govern.

11.2 Continuing Nature of Provisions. This Agreement shall continue to be effective, and shall not be revocable by any party hereto, until the Senior Obligations Repayment Date shall have occurred. This is a continuing agreement and the Senior Creditors and the Subordinated Creditors may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness to, or for the benefit of, Borrower or any other Loan Party on the faith hereof.

11.3 Amendments; Waivers.

(a) No amendment or modification of any of the provisions of this Agreement shall be effective unless the same shall be in writing and signed by the Senior Agent and the Subordinated Lender and the Borrower (to the extent such amendment or modification would adversely affect the Borrower’s right or obligations thereunder). No waiver of any provision hereof shall be effective unless made in writing by the waiving party.

(b) The Senior Creditors may at any time and from time to time without the consent of or notice to the Subordinated Creditors, without incurring liability to the Subordinated Creditors and without impairing or releasing the obligations of the Subordinated Creditors under this Agreement, change the manner or place of payment or extend the time of payment of or renew or alter any of the terms of the Senior Obligations, or amend, modify, refinance or restructure in any manner the Senior Documents.

(c) Without limiting the Senior Creditors’ right hereunder to amend the Senior Documents and increase the amount of the Senior Obligations without the consent of the Subordinated Creditors, it is understood that the Senior Agent, without the consent of any Subordinated Creditor, may in the its discretion determine that a supplemental agreement (which may take the form of an amendment and restatement of this Agreement) is necessary or appropriate to facilitate having additional indebtedness or other obligations (“Additional Debt”) of any of the Loan Parties become Senior Obligations under this Agreement; provided, that such Additional Debt is permitted to be incurred by the Senior Credit Agreement then extant and is permitted by said Senior Credit Agreement to be subject to the provisions of this Agreement as Senior Obligations.

11.4 Further Assurances. Each Subordinated Creditor and the Borrower will (in each case, solely at the expense of the Borrower) and at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action that the Senior Agent may reasonably request, in order to perfect or otherwise protect any right or interest granted or purported to be granted hereby or to enable the Senior Agent to exercise and enforce its rights and remedies hereunder. Each Subordinated Creditor further authorizes the Senior Agent to file UCC financing statements and any amendments thereto or continuations thereof with regard to the Subordinated Obligations without any Subordinated Creditor’s signature.

11.5 Expenses. The Borrower agrees to pay to the Senior Agent and the Subordinated Lender, upon demand, the amount of any and all reasonable expenses, including the reasonable fees and expenses of counsel for the Senior Agent or the Subordinated Lender, as the case may be, which the Senior Agent or the Subordinated Lender, as the case may be, may incur in connection with the exercise or enforcement of any of the rights or interests hereunder of the Senior Agent or the Senior Creditors on the one hand and the Subordinated Lender or the Subordinated Creditors on the other.

11.6 Information Concerning Financial Condition of the Borrower and the other Loan Parties. Each of the Subordinated Lender and the Senior Agent hereby assume responsibility for keeping itself informed of the financial condition of the Borrower and each of the other Loan Parties and all other circumstances bearing upon the risk of nonpayment of the Senior Obligations or the Subordinated Obligations. The Subordinated Lender and the Senior Agent hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances. In the event the Subordinated Lender or the Senior Agent, in its sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, it shall be under no obligation (i) to provide any such information to such other party or any other party on any subsequent occasion, (ii) to undertake any investigation not a part of its regular business routine, or (iii) to disclose any other information.

11.7 Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than the State of New York are governed by the laws of such jurisdiction.

11.8 Consent to Jurisdiction; Service of Process.

(a) The Subordinated Lender, each Subordinated Creditor and the Borrower (i) each hereby irrevocably submits to the jurisdiction of the state courts of the State of New York and the jurisdiction of the United States District Court for the Southern District of New York, for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or the subject matter hereof brought by the Senior Agent or its successors or assigns and (ii) hereby waives and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court, and (iii) each hereby waives in any such action, suit or proceeding any offsets or counterclaims which are unrelated to the transactions contemplated herein.

(b) The Subordinated Lender, each Subordinated Creditor and the Borrower each hereby consents to service of process by registered mail at the address to which notices are to be given. The Subordinated Lender, each Subordinated Creditor and the Borrower each agrees that its submission to jurisdiction and its consent to service of process by mail are made for the express benefit of the Senior Agent and the Senior Creditors. Final judgment against any of the Subordinated Lender, a Subordinated Creditor or a Loan Party in any such action, suit or proceeding shall be conclusive, and may be enforced in other jurisdictions (i) by suit, action or proceeding on the judgment, a certified or true copy of which shall be conclusive evidence of the fact and of the amount of any indebtedness or liability of the Subordinated Lender, a Subordinated Creditor or a Loan Party therein described or (ii) in any other manner provided by or pursuant to the laws of such other jurisdiction; provided, however, that the Senior Agent may at its option bring suit, or institute other judicial proceedings against any of the Subordinated Lender, a Subordinated Creditor or a Loan Party or any of their respective assets in any state or Federal court of the United States or of any country or place where such party or their respective assets may be found.

(c) The Subordinated Lender, each Subordinated Creditor and the Borrower further each covenants and agrees that so long as this Agreement shall be in effect, each shall maintain a duly appointed agent for the receipt and acceptance on its behalf of service of summons and other legal processes, and upon failure to do so the clerk of each court to whose jurisdiction it has submitted shall be deemed to be its respective designated agent upon whom such process may be served on its behalf, and notification by the attorney for plaintiff, complainant or petitioner therein by mail or telegraph to such Subordinated Creditor or the Borrower of the filing of each suit, action or proceeding shall be deemed sufficient notice thereof. The Senior Agent has appointed Loeb & Loeb LLP at 345 Park Avenue, New York, New York 10154, Attention: Kevin Eisenberg, as its agent for service of process in the State of New York.

11.9 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG ANY OF THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT.

11.10 Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or five (5) days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section) shall be as set forth below each party’s name on the signature pages hereof, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

11.11 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and each of the Senior Creditors and Subordinated Creditors and their respective successors and assigns, and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Senior Collateral or TDI Collateral.

11.12 Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, to be taken into consideration in interpreting, this Agreement.

11.13 Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

11.14 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective when it shall have been executed by each party hereto.

11.15 Acknowledgment. Subordinated Lender agrees that any payments of Senior Obligations made by TDI shall not be considered a distribution to Borrower.

11.16 Acknowledgment of Consent. Subordinated Lender hereby acknowledges and confirms that Subordinated Lender has consented to the consummation of the transactions contemplated under the Senior Documents subject to the execution by the Senior Lender of this Agreement and the effectiveness of that certain Amendment No. 2 to Second Lien Credit, Security and Pledge Agreement dated as of the date hereof by and among the Borrower, TDI and the Subordinated Lender.

[Signature pages follow]

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

TERIDO LLP, as Senior Agent for and on behalf of the Senior Creditors

By:	Terido DM1

By:	/s/ Paul Latham
	Name:	Paul Latham
	Title:	Director

By:	Terido DM2

By:	/s/ Paul Latham
	Name:	Paul Latham
	Title:	Director

	Address for Notices:

	20 Old Bailey
	London, England
	EC4M 7AN
	Attention: John Thorpe
	Telecopy No.: +44 (0)20 7710 2825

SIGNATURE PAGE TO
SUBORDINATION AND
INTERCREDITOR AGREEMENT

	HOLLYWOOD MEDIA CORP., as Subordinated Lender for and on behalf of the Subordinated Creditors

	By:	/s/ Tammy Hedge
		Name: Tammy Hedge
		Title: CFO

	Address for Notices:

	Hollywood Media Corp.
	560 Broadway, Suite 404
	New York, New York 10012
	Facsimile: (561) 998-2974
	Attention: Mitchell Rubenstein

	With a copy (which shall not constitute notice) to:

	Weil, Gotshal & Manges LLP
	767 Fifth Avenue
	New York, New York 10153
	Telecopy No.: (212) 833-8007
	Attention:	S. Scott Parel
		Richard A. Ginsburg

SIGNATURE PAGE TO
SUBORDINATION AND
INTERCREDITOR AGREEMENT

	KEY BRAND ENTERTAINMENT INC.,
	as Borrower

	By:	/s/ Paul Dietz
		Name: Paul Dietz
		Title: Chief Financial Officer

	Address for Notices:

	Key Brand Entertainment Inc.
	1619 Broadway, 9^th Floor
	New York, New York 10019
	Attention:	John Gore
		and Paul Dietz
	Telecopy No.: (917) 421-5430

SIGNATURE PAGE TO
SUBORDINATION AND
INTERCREDITOR AGREEMENT

EX-10.3 4 v331168_ex10-3.htm EXHIBIT 10.3

Exhibit 10.3

EXECUTION VERSION

AMENDMENT TO THE WARRANT TO PURCHASE SHARES OF

COMMON STOCK OF THEATRE DIRECT NY, INC.

This Amendment to the Warrant, dated as of December 31, 2012 (this “Amendment”) is executed by Theatre Direct NY, Inc., a Delaware corporation, and Hollywood Media Corp., a Florida corporation.

WHEREAS, Theatre Direct NY, Inc. and Hollywood Media Corp. are parties to that certain Warrant executed and issued as of December 15, 2010 (the “Warrant”).

WHEREAS, the parties desire to amend the Warrant upon the terms and conditions herein provided.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Warrant.

2. Amendment to the Warrant.

Section 11(A) of the Warrant is hereby amended and restated in its entirety as follows:

“(A) At any time after the first (1st) anniversary of the Issue Date, the Corporation may elect to redeem this Warrant (or the Shares issued upon exercise of this Warrant), in whole and not in part, in exchange for an amount equal to the greater of (x) the aggregate Fair Market Value of the Shares on or about the date of notice of redemption and (y) $3,000,000 (the “Redemption Price”) by delivering to the Warrantholder a notice of redemption, which when delivered shall be irrevocable by the Corporation and binding on the Corporation and the Warrantholder, stating the Corporation’s intent to redeem this Warrant and the effective date for such redemption (which shall not be more than ten (10) Business Days from the date of such notice).”

Section 11(B) of the Warrant is hereby amended and restated in its entirety as follows:

“(B) At any time after June 30, 2015, the Warrantholder may elect to put this Warrant, in whole and not in part, to the Corporation in exchange for an amount equal to the greater of (x) the aggregate Fair Market Value of the Shares, and (y) $3,000,000 (the “Put Price”) by delivering to the Corporation a put notice, which when delivered shall be irrevocable by the Warrantholder and binding on the Warrantholder and the Corporation, stating the Warrantholder’s intent to put this Warrant back to the Corporation and the effective date of such put (which shall not be less than twenty (20) Business Days from the date of such notice). Notwithstanding the foregoing, if the Corporation has delivered notice of a Conversion Event and such Conversion Event is consummated within thirty (30) days thereof, the Warrantholder may not exercise the put under this Section 11(B) until after such thirty (30) day period; provided that such restriction shall apply to only one such notice.”

3. Amendment. All references in the Warrant (and in the other agreements, documents and instruments entered into in connection therewith) to the “Warrant” shall be deemed for all purposes to refer to the Warrant, as amended by this Amendment. This Amendment may not be amended or modified in any manner other than as provided in the Warrant.

4. Remaining Provisions of the Warrant. Except as expressly provided herein, the provisions of the Warrant shall remain in full force and effect in accordance with their terms and shall be unaffected by this Amendment.

5. Counterparts. This Amendment may be executed in multiple counterparts and by facsimile or other electronic means, each of which will be deemed to be an original copy of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement.

6. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed in such state without giving effect to the choice of law principles of such state that would require or permit the application of laws of another jurisdiction.

[Remainder of page intentionally left blank]

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

	THEATRE DIRECT NY, INC.

	By:	/s/ Paul Dietz
		Name: Paul Dietz
		Title: CFO

	HOLLYWOOD MEDIA CORP.

	By:	/s/ Tammy Hedge
		Name: Tammy Hedge
		Title: CFO

[Signature Page to Amendment to the Warrant]