SECOND AMENDMENT TO
FORBEARANCE AGREEMENT
This SECOND AMENDMENT TO FORBEARANCE AGREEMENT ("Second
Amendment"), dated as of August 14, 2007, is entered into by and
among MOVIE GALLERY, INC., a Delaware corporation ("Borrower"),
the Lenders party hereto, XXXXXXX XXXXX CREDIT PARTNERS L.P.
("GSCP"), as Lender and in its capacity as Administrative Agent
for the Lenders ("Administrative Agent") and WACHOVIA BANK,
NATIONAL ASSOCIATION ("Wachovia"), as Lender and in its capacity
as Collateral Agent for the Secured Parties ("Collateral
Agent").
RECITALS:
WHEREAS, the Borrower, the Guarantors party thereto, the Lenders
party thereto, the Administrative Agent, GSCP as Syndication
Agent, the Collateral Agent, and Wachovia as Documentation Agent
have entered into that certain First Lien Credit and Guaranty
Agreement, dated as of March 8, 2007 (as has been amended,
restated, supplemented or otherwise modified from time to time,
the "Credit Agreement");
WHEREAS, the Borrower, the Guarantors, the Administrative Agent,
the Collateral Agent and the Requisite Lenders have entered into
that certain Forbearance Agreement, dated as of July 20, 2007
(the "Forbearance Agreement");
WHEREAS, the Borrower, the Guarantors, the Administrative Agent,
the Collateral Agent and the Requisite Lenders have entered into
that certain First Amendment to Forbearance Agreement, dated as
of July 27, 2007 (the "First Amendment") (the Forbearance
Agreement together with and as amended by the First Amendment,
the "Amended Forbearance Agreement");
WHEREAS, pursuant to Section 5(d) of the Forbearance Agreement,
Borrower and the Guarantors have requested that the
Administrative Agent and the Requisite Lenders further amend the
Amended Forbearance Agreement to extend the Forbearance Period
until August 27, 2007; and
WHEREAS, Administrative Agent and the Requisite Lenders are
willing to extend the Forbearance Period upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements
contained in the Amended Forbearance Agreement, the Credit
Agreement, the other Credit Documents and herein, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree
as follows:
SECTION 1. Definitions.
Unless otherwise defined above or elsewhere in this Second
Amendment, capitalized terms used herein shall have the meanings
ascribed to them in the Amended Forbearance Agreement or the
Credit Agreement, as applicable.
SECTION 2. Amendments to Amended Forbearance Agreement.
Subject to the receipt of the signatures from the Administrative
Agent, Collateral Agent, Requisite Lenders, Borrower and the
Guarantors, the Amended Forbearance Agreement is hereby amended
as of the Effective Date as follows:
(a) The definition of "Forbearance Period" contained in
Section 1(b) of the Forbearance Agreement is hereby amended to
replace the date "August 14, 2007" in clause (ii) thereof with
the date "August 27, 2007".
(b) The second sentence of Section 6(b) of Forbearance
Agreement is hereby amended by (x) deleting the word "and"
immediately before clause (ii) thereof, and (y) adding the
following at the end thereof:
"and (iii) unless waived by the Administrative Agent in the
exercise of its sole discretion, cause the Strategic
Advisor to meet telephonically with the steering committee
for the Lenders, the Administrative Agent, the Collateral
Agent and/or the Financial Advisor on a weekly basis (as
currently provided in Section 6(c)(ii)(c) of the
Forbearance Agreement), on Wednesday of each calendar week
(or on such other dates and with the frequency (it being
understood that the frequency shall not to be increased)
determined by the Administrative Agent in the exercise of
its sole discretion), to update the steering committee for
the Lenders, the Administrative Agent, the Collateral Agent
and/or the Financial Advisor on, and to otherwise discuss
with and address questions from the members of the steering
committee for the Lenders, the Administrative Agent, the
Collateral Agent and/or the Financial Advisor about, the
information and matters referred to in this Section 6".
(c) Section 6(c)(ii) of the Forbearance Agreement is
hereby amended by (x) replacing the reference to "EST" with
"PST" in subclause (b) thereof, and (y) adding the following at
the end of subclause (d) thereof, before the colon:
"(it being understood that the weekly sales report due by 1:00
p.m. PST on August 7, 2007 shall be delivered no later than 5:00
p.m. PST on August 8, 2007)".
(d) Section 6(c)(iii) of the Forbearance Agreement is
hereby amended by (x) replacing, before the colon, the words
"the last day of the Forbearance Period" with "August 14, 2007",
and (y) adding the following at the end thereof:
"; provided, that notwithstanding the foregoing, the
delivery of the information referred to in the foregoing
subclauses (a) and (b) shall be delivered to the
Administrative Agent and the Financial Advisor no later
than the close of business on August 17, 2007".
(e) The Forbearance Agreement is hereby amended by
adding new subsections (n), (o) and (p) at the end of Section 6
thereof, as follows:
"(n) Cash Payments to Landlords. The Borrower, the
Guarantors and their respective Subsidiaries shall not make
or cause to be made any cash payments to landlords in
settlement of unpaid rent or in settlement of rent due for
the remaining term or any other obligations under any
lease, in each case without the prior written consent of
the Requisite Lenders (it being understood that the
foregoing shall not restrict (A) the payment of current
rent to landlords in the ordinary course of business of the
Borrower and the Guarantors, consistent with past practice,
and otherwise in accordance with each of the following: (x)
the relevant lease, (y) the Cash Flow Forecast and (z) the
deliveries provided pursuant to Sections 6(c)(i)(a) and
6(c)(iii)(c) of the Forbearance Agreement, and (B) the
payment of unpaid rent for the month of August 2007).
(o) Cost Estimates. No later than the close of business
on August 17, 2007, the Borrower shall cause the Strategic
Advisor to provide to the Administrative Agent and the
Financial Advisor (each of whom may provide copies to any
of the Private Side Lenders) estimates of the costs and
savings to the Borrower and its Subsidiaries for in-court
and out-of-court restructuring alternatives.
(p) Collateral Account. The Borrower shall establish the
Collateral Account (as such term is defined in the Pledge
and Security Agreement) with the Collateral Agent on or
prior to the close of business on August 20, 2007."
SECTION 3. Representations and Warranties of Borrower and the
Guarantors.
To induce Administrative Agent, Collateral Agent and Requisite
Lenders to execute and deliver this Second Amendment, each of
Borrower and the Guarantors represents and warrants that:
(a) The execution, delivery and performance by each of
Borrower and the Guarantors of this Second Amendment and all
documents and instruments delivered in connection herewith and
the Amended Forbearance Agreement, the Credit Agreement and all
other Credit Documents have been duly authorized by Borrower's
and each Guarantor's respective board of directors (or similar
governing body), and this Second Amendment and all documents and
instruments delivered in connection herewith, the Amended
Forbearance Agreement and the Credit Agreement and all other
Credit Documents are legal, valid and binding obligations of
Borrower and the Guarantors enforceable against such parties in
accordance with their respective terms, except as may be limited
by (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity
(regardless of whether such enforcement is sought in a
proceeding in equity or at law);
(b) Except as a result of the Existing Defaults, and
except for the representations set forth in Section 4.9 (No
Material Adverse Change) and Section 4.22 (Solvency) of the
Credit Agreement, each of the representations and warranties
contained in the Credit Agreement and the other Credit Documents
is true and correct in all material respects on and as of the
date hereof to the same extent as though made on the date
hereof, except to the extent that such representations and
warranties specifically relate to an earlier date, in which case
such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date,
and each of the agreements and covenants in the Credit Agreement
and the other Credit Documents is hereby reaffirmed with the
same force and effect as if each were separately stated herein
and made as of the date hereof;
(c) Neither the execution, delivery and performance of
this Second Amendment and all documents and instruments
delivered in connection herewith nor the consummation of the
transactions contemplated hereby or thereby does or shall
contravene, result in a breach of, or violate (i) any provision
of Borrower's or any Guarantor's corporate charter, bylaws,
operating agreement, or other governing documents, (ii) any law
or regulation, or any order or decree of any court or government
instrumentality, or (iii) any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which Borrower or
any Guarantor is a party or by which Borrower or any Guarantor
or any of their respective property is bound;
(d) As of the date hereof, except for the Existing
Defaults, no Event of Default has occurred or is continuing
under this Second Amendment, the Amended Forbearance Agreement,
the Credit Agreement or any other Credit Document; and
(e) The Lenders' and the other Secured Parties' security
interests in the Collateral continue to be valid, binding, and
enforceable first-priority security interests which secure the
Obligations subject only to the Permitted Liens.
SECTION 4. Ratification of Liability.
Each of Borrower and the Guarantors, as debtors, grantors,
pledgors, guarantors, assignors, or in other similar capacities
in which such parties grant liens or security interests in their
properties or otherwise act as accommodation parties or
guarantors, as the case may be, under the Credit Documents,
hereby ratifies and reaffirms all of its payment and performance
obligations and obligations to indemnify, contingent or
otherwise, under each of such Credit Documents and the Amended
Forbearance Agreement to which such party is a party, and each
such party hereby ratifies and reaffirms its grant of liens on
or security interests in its properties pursuant to such Credit
Documents to which it is a party as security for the Obligations
under or with respect to the Credit Agreement and confirms and
agrees that such liens and security interests hereafter secure
all of the Obligations, including, without limitation, all
additional Obligations hereafter arising or incurred pursuant to
or in connection with this Second Amendment, the Amended
Forbearance Agreement, the Credit Agreement or any other Credit
Document. Borrower and the Guarantors each further agrees and
reaffirms that the Credit Documents to which it is a party now
apply to all Obligations as defined in the Credit Agreement, as
modified hereby (including, without limitation, all additional
Obligations hereafter arising or incurred pursuant to or in
connection with this Second Amendment, the Amended Forbearance
Agreement, the Credit Agreement or any other Credit Document).
Each such party (i) further acknowledges receipt of a copy of
this Second Amendment and all other agreements, documents, and
instruments executed and/or delivered in connection herewith,
(ii) consents to the terms and conditions of same, and (iii)
agrees and acknowledges that the Amended Forbearance Agreement
and each of the Credit Documents, as modified hereby, remains in
full force and effect and is hereby ratified and confirmed.
Except as expressly provided herein, the execution of this
Second Amendment shall not operate as a waiver of any right,
power or remedy of any Lender, nor constitute a waiver of any
provision of any of the Credit Documents nor constitute a
novation of any of the Obligations under the Amended Forbearance
Agreement, the Credit Agreement or other Credit Documents.
SECTION 5. Reference to and Effect upon the Amended Forbearance
Agreement and the Credit Documents.
(a) Except as specifically amended hereby, all terms,
conditions, covenants, representations and warranties contained
in the Amended Forbearance Agreement, the Credit Agreement and
other Credit Documents, and all rights of the Lenders and all of
the Obligations, shall remain in full force and effect. Each of
Borrower and the Guarantors hereby confirms that the Amended
Forbearance Agreement, the Credit Agreement and the other Credit
Documents are in full force and effect and that neither Borrower
nor any Guarantor has any right of setoff, recoupment or other
offset or any defense, claim or counterclaim with respect to any
of the Obligations, the Amended Forbearance Agreement, the
Credit Agreement or any other Credit Document.
(b) Except as expressly set forth herein, the execution,
delivery and effectiveness of this Second Amendment and any
waivers set forth herein shall not directly or indirectly (i)
create any obligation to make any further Loans or issue any
Letters of Credit or Synthetic Letters of Credit, or to continue
to defer any enforcement action after the occurrence of any
other Default or Event of Default (including, without
limitation, any Forbearance Default), (ii) constitute a consent
or waiver of any past, present or future violations of any
provisions of the Amended Forbearance Agreement, the Credit
Agreement or any other Credit Documents, (iii) amend, modify or
operate as a waiver of any provision of the Amended Forbearance
Agreement, the Credit Agreement or any other Credit Documents or
any right, power or remedy of any Lender, (iv) constitute a
consent to any merger or other transaction or to any sale,
restructuring or refinancing transaction, (v) constitute a
course of dealing or other basis for altering any Obligations or
any other contract or instrument. Except as expressly set forth
herein, each Lender and each of the other Secured Parties
reserves all of its rights, powers, and remedies under the
Amended Forbearance Agreement, the Credit Agreement, the other
Credit Documents and applicable law. All of the provisions of
the Amended Forbearance Agreement, the Credit Agreement and the
other Credit Documents, including, without limitation, the time
of the essence provisions, are hereby reiterated.
(c) From and after the Effective Date, (i) the term
"Agreement" in the Credit Agreement, and all references to the
Credit Agreement in any Credit Document shall mean the Credit
Agreement as amended by, among other things, the Amended
Forbearance Agreement and this Second Amendment, and (ii) the
term "Credit Documents" in the Credit Agreement and the other
Credit Documents shall include, without limitation, the Amended
Forbearance Agreement and this Second Amendment and any
agreements, instruments and other documents executed and/or
delivered in connection herewith.
(d) No Lender or other Secured Party has waived or is by
this Second Amendment waiving, and no Lender or other Secured
Party has any intention of waiving (regardless of any delay in
exercising such rights and remedies), any Default or Event of
Default which may be continuing on the date hereof or any Event
of Default which may occur after the date hereof (whether the
same or similar to the Existing Defaults or otherwise), and no
Lender or any other Secured Party has agreed to forbear with
respect to any of its rights or remedies concerning any Events
of Default (other than, during the Forbearance Period, the
Existing Defaults solely to the extent expressly set forth
herein), which may have occurred or are continuing as of the
date hereof, or which may occur after the date hereof.
(e) Borrower and each Guarantor each agrees and
acknowledges that the Lenders' agreement to forbear from
exercising certain of their default-related rights and remedies
with respect to the Existing Defaults during the Forbearance
Period does not in any manner whatsoever limit any Lender's or
other Secured Party's right to insist upon strict compliance by
Borrower and the Guarantors with the Credit Agreement, the
Amended Forbearance Agreement, this Second Amendment or any
other Credit Document during the Forbearance Period, except as
related to the Existing Defaults to the extent provided herein
and otherwise as expressly set forth herein.
(f) This Second Amendment shall not be deemed or
construed to be a satisfaction, reinstatement, novation or
release of the Amended Forbearance Agreement, the Credit
Agreement or any other Credit Document.
(g) As further provided in, and without limitation of,
the Amended Forbearance Agreement, upon the occurrence of a
Termination Event, the agreement of the Lenders hereunder to
forbear from exercising their respective default-related rights
and remedies shall immediately terminate and Borrower and the
Guarantors each agrees that any or all of the Lenders and other
Secured Parties may at any time thereafter proceed to exercise
any and all of their respective rights and remedies under any or
all of the Credit Agreement and any other Credit Document and/or
applicable law, including, without limitation, the right to
require that all Cash Proceeds (as such term is defined in the
Pledge and Security Agreement) be held in trust for the
Collateral Agent and turned over to the Collateral Agent to be
held in the Collateral Account (as such term is defined in the
Pledge and Security Agreement) as provided under Section 7.7 of
the Pledge and Security Agreement.
SECTION 6. Costs and Expenses.
In addition to (to the extent not otherwise provided in the
Amended Forbearance Agreement and the Credit Agreement), and not
in lieu of, the terms of the Amended Forbearance Agreement, the
Credit Agreement and other Credit Documents relating to the
reimbursement of fees and expenses, Borrower shall reimburse
Administrative Agent and the other Lenders, as the case may be,
promptly on demand for all fees, costs, charges and expenses,
including the fees, costs and expenses of counsel and other
expenses, incurred in connection with this Second Amendment and
the other agreements and documents executed and/or delivered in
connection herewith.
SECTION 7. Governing Law; Consent to Jurisdiction and Venue.
THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER AND/OR ANY
GUARANTOR ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT
DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX
XXX XXXX XX XXX XXXX. BY EXECUTING AND DELIVERING THIS SECOND
AMENDMENT, BORROWER AND EACH GUARANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS
GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE BORROWER OR THE
APPLICABLE GUARANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 10.1 OF THE CREDIT AGREEMENT; (D) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER THE BORROWER AND/OR THE APPLICABLE GUARANTOR
IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND
(E) AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST BORROWER OR ANY CREDIT PARTY IN THE COURTS
OF ANY OTHER JURISDICTION.
SECTION 8. Construction.
This Second Amendment and all other agreements and documents
executed and/or delivered in connection herewith have been
prepared through the joint efforts of all of the parties hereto.
Neither the provisions of this Second Amendment or any such
other agreements and documents nor any alleged ambiguity therein
shall be interpreted or resolved against any party on the ground
that such party or its counsel drafted this Second Amendment or
such other agreements and documents, or based on any other rule
of strict construction. Each of the parties hereto represents
and declares that such party has carefully read this Second
Amendment and all other agreements and documents executed in
connection therewith, and that such party knows the contents
thereof and signs the same freely and voluntarily. The parties
hereto acknowledge that they have been represented by legal
counsel of their own choosing in negotiations for and
preparation of this Second Amendment and all other agreements
and documents executed in connection herewith and that each of
them has read the same and had their contents fully explained by
such counsel and is fully aware of their contents and legal
effect. If any matter is left to the decision, right,
requirement, request, determination, judgment, opinion,
approval, consent, waiver, satisfaction, acceptance, agreement,
option or discretion of one or more Lenders, the other Secured
Parties or their respective employees, counsel, or agents in the
Amended Forbearance Agreement, the Credit Agreement or any other
Credit Documents, such action shall be deemed to be exercisable
by such Lenders, such other Secured Parties or such other Person
in its sole and absolute discretion and according to standards
established in its sole and absolute discretion. Without
limiting the generality of the foregoing, "option" and
"discretion" shall be implied by the use of the words "if" and
"may."
SECTION 9. Counterparts.
This Second Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an
original, but all such counterparts shall constitute one and the
same instrument, and all signatures need not appear on any one
counterpart. Any party hereto may execute and deliver a
counterpart of this Second Amendment by delivering by facsimile
or other electronic transmission a signature page of this Second
Amendment signed by such party, and any such facsimile or other
electronic signature shall be treated in all respects as having
the same effect as an original signature. Any party delivering
by facsimile or other electronic transmission a counterpart
executed by it shall promptly thereafter also deliver a manually
signed counterpart of this Second Amendment.
SECTION 10. Severability.
The invalidity, illegality, or unenforceability of any provision
in or obligation under this Second Amendment in any jurisdiction
shall not affect or impair the validity, legality, or
enforceability of the remaining provisions or obligations under
this Second Amendment or of such provision or obligation in any
other jurisdiction. If feasible, any such offending provision
shall be deemed modified to be within the limits of
enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other
provisions of this Second Amendment in all other respects shall
remain valid and enforceable.
SECTION 11. Time of Essence.
Time is of the essence in the performance of each of the
obligations of Borrower and the Guarantors hereunder and with
respect to all conditions to be satisfied by such parties.
SECTION 12. No Other Creditor Action.
The Lenders' and the other Secured Parties' obligations to
forbear are expressly conditioned upon all other creditors of
Borrower and the Guarantors (including, without limitation,
trade creditors) refraining or otherwise forbearing from
exercising remedies or otherwise taking any enforcement action
against Borrower, any Guarantor or the Collateral (including,
without limitation, acceleration of indebtedness) during the
Forbearance Period. In the event that any such creditor takes
any such action, all of the Lenders' and the other Secured
Parties' obligations hereunder and under the Amended Forbearance
Agreement shall automatically and immediately terminate without
further notice (provided, that, without limitation of this
Section 12, the Administrative Agent agrees to give notice of
such event to the Borrower (it being understood that the failure
to give such notice will not prevent the operation of this
Section 12 and that the Administrative Agent shall have no
liability to the Borrower, any of its Subsidiaries or their
respective affiliates for the failure to give such notice)) or
demand.
SECTION 13. Further Assurances.
Borrower and each Guarantor agrees to take all further actions
and execute all further documents as Administrative Agent may
from time to time reasonably request to carry out the
transactions contemplated by this Second Amendment, the Amended
Forbearance Agreement and all other agreements executed and
delivered in connection herewith.
SECTION 14. Section Headings.
Section headings in this Second Amendment are included herein
for convenience of reference only and shall not constitute part
of this Second Amendment for any other purpose.
SECTION 15. Notices.
All notices, requests, and demands to or upon the respective
parties hereto shall be given in accordance with the Credit
Agreement.
SECTION 16. Effectiveness.
This Second Amendment shall become effective when all of the
following conditions precedent have been met (or waived) as
determined by Administrative Agent and the Requisite Lenders in
their sole discretion (provided, that Section 2 hereof shall
become effective upon satisfaction of the condition set forth in
the following subclause (a)):
(a) Execution of Second Amendment. Administrative Agent
shall have received duly executed signature pages for this
Second Amendment signed by Administrative Agent, Collateral
Agent, Requisite Lenders, Borrower and the Guarantors.
(b) Closing Fee. In consideration of the accommodations
granted by the Administrative Agent, the Collateral Agent and
the Requisite Lenders in this Second Amendment, in addition to
all other fees and costs owed under the Amended Forbearance
Agreement, the Borrower and the Guarantors shall pay to the
Administrative Agent, ratably for its account and the account of
each Lender that was a Lender as of the date of effectiveness of
this Second Amendment, a fee equal to (x) 0.05% multiplied by
(y) the aggregate Revolving Exposure plus Term Loan Exposure
plus Synthetic LC Exposure of each Lender.
(c) Representations and Warranties. The Borrower and
the Guarantors shall have confirmed in writing that the
representations and warranties contained herein and in the
Amended Forbearance Agreement shall be true and correct, and no
Forbearance Default, Default or Event of Default, other than the
Existing Defaults, shall exist on the date hereof.
SECTION 17. Waivers by Borrower and the Guarantors.
(a) Waiver of Jury Trial Right and Other Matters.
BORROWER AND EACH OF THE GUARANTORS EACH HEREBY WAIVES (i) THE
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
SECOND AMENDMENT, THE AMENDED FORBEARANCE AGREEMENT, THE CREDIT
AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS, THE OBLIGATIONS OR
THE COLLATERAL; (ii) PRESENTMENT, DEMAND AND PROTEST, AND NOTICE
OF PRESENTMENT, PROTEST, DEFAULT, NONPAYMENT, MATURITY, RELEASE
WITH RESPECT TO ALL OR ANY PART OF THE OBLIGATIONS OR ANY
COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS,
INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY
ANY LENDER ON WHICH BORROWER OR ANY GUARANTOR MAY IN ANY WAY BE
LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER SUCH LENDER MAY
DO IN THIS REGARD; (iii) NOTICE PRIOR TO TAKING POSSESSION OR
CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE
REQUIRED BY ANY COURT PRIOR TO ALLOWING ANY LENDER TO EXERCISE
ANY OF THEIR RESPECTIVE RIGHTS AND REMEDIES; (iv) THE BENEFIT OF
ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS AND ALL RIGHTS
WAIVABLE UNDER ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE; (v) ANY
RIGHT BORROWER OR ANY GUARANTOR MAY HAVE UPON PAYMENT IN FULL OF
THE OBLIGATIONS TO REQUIRE ANY LENDER OR OTHER SECURED PARTY TO
TERMINATE ITS SECURITY INTEREST IN THE COLLATERAL OR IN ANY
OTHER PROPERTY OF BORROWER OR ANY GUARANTOR UNTIL TERMINATION OF
THE CREDIT AGREEMENT IN ACCORDANCE WITH ITS TERMS AND THE
EXECUTION BY BORROWER, AND BY ANY PERSON WHO PROVIDES FUNDS TO
BORROWER WHICH ARE USED IN WHOLE OR IN PART TO SATISFY THE
OBLIGATIONS, OF AN AGREEMENT INDEMNIFYING ANY OR ALL OF THE
LENDERS AND THE OTHER SECURED PARTIES FROM ANY LOSS OR DAMAGE
ANY SUCH PARTY MAY INCUR AS THE RESULT OF DISHONORED CHECKS OR
OTHER ITEMS OF PAYMENT RECEIVED BY SUCH LENDER OR OTHER SECURED
PARTY FROM BORROWER, OR ANY ACCOUNT DEBTOR AND APPLIED TO THE
OBLIGATIONS AND RELEASING AND INDEMNIFYING, IN THE SAME MANNER
AS DESCRIBED IN SECTION 7 OF THE AMENDED FORBEARANCE AGREEMENT,
THE RELEASEES FROM ALL CLAIMS ARISING ON OR BEFORE THE DATE OF
SUCH TERMINATION STATEMENT; AND (vi) NOTICE OF ACCEPTANCE
HEREOF, AND BORROWER THE GUARANTORS EACH ACKNOWLEDGES THAT THE
FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE
AGENT'S AND SIGNING LENDER'S ENTERING INTO THIS SECOND AMENDMENT
AND THAT SUCH PARTIES ARE RELYING UPON THE FOREGOING WAIVERS IN
THEIR FUTURE DEALINGS WITH BORROWER AND THE GUARANTORS.
BORROWER AND THE GUARANTORS EACH WARRANTS AND REPRESENTS THAT IT
HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND
HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, THIS SECOND AMENDMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
SECTION 18. Assignments; No Third Party Beneficiaries.
This Second Amendment shall be binding upon and inure to the
benefit of Borrower, the Guarantors, the Lenders and the other
Secured Parties and their respective successors and assigns;
provided, that neither Borrower nor any Guarantor shall be
entitled to delegate any of its duties hereunder and shall not
assign any of its rights or remedies set forth in this Second
Amendment without the prior written consent of Administrative
Agent in its sole discretion. No Person other than the parties
hereto, and in the case of Section 7 of the Forbearance
Agreement, the Releasees, shall have any rights hereunder or be
entitled to rely on this Second Amendment and all third-party
beneficiary rights (other than the rights of the Releasees under
Section 7 of the Forbearance Agreement) are hereby expressly
disclaimed.
SECTION 19. Final Agreement.
This Second Amendment, the Amended Forbearance Agreement, the
Credit Agreement, the other Credit Documents, and the other
written agreements, instruments, and documents entered into in
connection therewith (collectively, the "Borrower/Lender
Documents") set forth in full the terms of agreement between the
parties hereto and thereto and are intended as the full,
complete, and exclusive contracts governing the relationship
between such parties, superseding all other discussions,
promises, representations, warranties, agreements, and
understandings between the parties with respect thereto. No
term of the Borrower/Lender Documents may be modified or
amended, nor may any rights thereunder be waived, except in a
writing signed by the party against whom enforcement of the
modification, amendment, or waiver is sought. Any waiver of any
condition in, or breach of, any of the foregoing in a particular
instance shall not operate as a waiver of other or subsequent
conditions or breaches of the same or a different kind.
Administrative Agent's, any Lender's or any other Secured
Party's exercise or failure to exercise any rights or remedies
under any of the foregoing in a particular instance shall not
operate as a waiver of its right to exercise the same or
different rights and remedies in any other instances. There are
no oral agreements among the parties hereto.
SECTION 20. Administrative Agent.
The Requisite Lenders hereby authorize the Administrative Agent
to execute this Second Amendment.
Signature pages to follow
IN WITNESS WHEREOF, the duly authorized representatives of the
parties have caused this Second Amendment to be executed and
delivered as of the date first written above, and acknowledge
that they have read and understood this Second Amendment.
MOVIE GALLERY, INC.
By:
Name:
Title:
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Administrative Agent and a Lender
By:
Authorized Signatory
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Collateral Agent and a Lender
By:
Name:
Title:
[LENDER]
By:
Name:
Title:
RATIFICATION OF OBLIGATIONS
Each of the undersigned Guarantors hereby acknowledges, agrees
and consents to the foregoing Second Amendment and agrees that
the guaranty under the Credit Agreement and each of the other
Credit Documents remain in full force and effect, and the
Guarantors confirm and ratify all of their obligations under
the Amended Forbearance Agreement and each Credit Document to
which such Guarantor is a party.
MOVIE GALLERY US, LLC
By: Movie Gallery, Inc., its Manager and Sole Member
By:
Name:
Title:
M.G. DIGITAL, LLC
By: Movie Gallery US, LLC, its Manager and Sole Member
By: Movie Gallery, Inc., its Manager and Sole Member
By:
Name:
Title:
M.G.A REALTY I, LLC
By: Movie Gallery US, LLC, its Manager and Sole Member
By: Movie Gallery, Inc., its Manager and Sole Member
By:
Name:
Title:
HOLLYWOOD ENTERTAINMENT CORPORATION
By:
Name:
Title:
MG AUTOMATION LLC
By: Hollywood Entertainment Corporation, its Manager
and Sole Member
By:
Name:
Title:
