EXHIBIT 10.3
EXECUTION VERSION
MOVIE GALLERY, INC.
$325,000,000
11% Senior Notes Due 2012
REGISTRATION RIGHTS AGREEMENT
April 27, 2005
Wachovia Capital Markets, LLC
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇, Incorporated
CIBC World Markets, Corp.
As Initial Purchasers under the Purchase Agreement
c/o Wachovia Capital Markets, LLC
One Wachovia Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ 0604
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
This Registration Rights Agreement (this "Agreement") is made and
entered into between Movie Gallery, Inc., a Delaware corporation (the
"Company"), the guarantors listed on Exhibit A hereto (the "Guarantors") and
Wachovia Capital Markets, LLC, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇,
Incorporated and CIBC World Markets, Corp. (the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated April 25, 2005, by and between the Company, the Guarantors and
the Initial Purchasers (the "Purchase Agreement"), which provides for the
issuance and sale by the Company to the Initial Purchasers of $325,000,000
aggregate principal amount of the Company's 11% Senior Notes Due 2012 (the
"Notes"). In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company and the Guarantors have agreed to provide the
registration rights set forth in this Agreement for the benefit of the Initial
Purchasers and their direct and indirect transferees. The parties hereby agree
as follows:
1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Additional Interest" has the meaning set forth in Section 4 hereto.
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"Affiliate" means, with respect to any specified person, any other
person that, directly or indirectly, controls, is controlled by, or is under
common control with, such specified person. For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement" has the meaning set forth in the preamble hereto.
"Business Day" means any day excluding Saturday, Sunday or any other
day which is a legal holiday under the laws of New York, New York or is a day on
which banking institutions therein located are authorized or required by law or
other governmental action to close.
"Closing Date" means the Closing Date as defined in the Purchase
Agreement.
"Commission" means the Securities and Exchange Commission.
"Company" means Movie Gallery, Inc., a Delaware corporation.
"Consummate" means, with respect to a Registered Exchange Offer, the
occurrence of (a) the filing and effectiveness under the Act of the Exchange
Offer Registration Statement relating to the Exchange Notes to be issued in the
Registered Exchange Offer, (b) the maintenance of such Exchange Offer
Registration Statement continuously effective and the keeping of the Registered
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 2(c)(ii) hereof, (c) the Company's acceptance for exchange
of all Transfer Restricted Notes duly tendered and not validly withdrawn
pursuant to the Registered Exchange Offer and (d) the delivery of duly executed
and authenticated Exchange Notes by the Company to the registrar under the
Indenture in the same aggregate principal amount as the aggregate principal
amount of Transfer Restricted Notes duly tendered and not validly withdrawn by
Holders thereof pursuant to the Registered Exchange Offer and the delivery of
such Exchange Notes to such Holders. The term "Consummation" has a meaning
correlative to the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Notes" means debt securities of the Company substantially
identical in all material respects to the Notes other than issue date (except
that the Additional Interest provisions and the transfer restrictions pertaining
to the Notes will be modified or eliminated, as appropriate), to be issued under
the Indenture in connection with the Registered Exchange Offer.
"Exchange Offer Registration Period" means the 180-day period
following the Consummation of the Registered Exchange Offer, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement; provided, however,
that in the event that all resales of Exchange Notes (including any resales by
Participating Broker-Dealers) covered by such Exchange Offer Registration
Statement
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have been made, the Exchange Offer Registration Statement need not thereafter
remain continuously effective for such period.
"Exchange Offer Registration Statement" means a registration
statement of the Company and the Guarantors on an appropriate form under the Act
with respect to the Registered Exchange Offer, all amendments and supplements to
such registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Filing Date" has the meaning set forth in Section 2(a) hereto.
"Guarantors" means the guarantors listed on Exhibit A hereto.
"Holder" means any holder from time to time of Transfer Restricted
Notes or Exchange Notes (including the Initial Purchasers).
"Indenture" means the indenture relating to the Notes and the
Exchange Notes, dated as of April 27, 2005, between the Company and SunTrust
Bank, as Trustee, as the same may be amended, supplemented, waived or otherwise
modified from time to time in accordance with the terms thereof.
"Initial Purchasers" has the meaning set forth in the preamble
hereto.
"Losses" has the meaning set forth in Section 8(d) hereto.
"Majority Holders" means the Holders of a majority of the aggregate
principal amount of Transfer Restricted Notes registered under a Registration
Statement.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering
under a Shelf Registration Statement.
"Notes" has the meaning set forth in the preamble hereto.
"Participating Broker-Dealer" means any Holder (which may include
the Initial Purchasers) that is a broker-dealer electing to exchange Notes
acquired for its own account as a result of market-making activities or other
trading activities for Exchange Notes.
"Private Exchange Notes" has the meaning set forth in Section 2(f)
hereof.
"Prospectus" means the prospectus included in any Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Act or any similar rule that may be adopted by
the Commission), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Transfer Restricted
Notes covered by such Registration Statement, and all amendments and supplements
to the Prospectus.
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"Purchase Agreement" has the meaning set forth in the preamble
hereto.
"Registered Exchange Offer" means an offer by the Company to issue
and deliver a like principal amount of Exchange Notes in exchange for Transfer
Restricted Notes.
"Registration Default" has the meaning set forth in Section 4(a)
hereof.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company and the Guarantors with this
Agreement, including without limitation: (i) all Commission, stock exchange or
National Association of Securities Dealers, Inc. registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Notes or Transfer Restricted Notes), (iii)
all expenses of any persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting agreements,
securities sales agreements and other documents relating to the performance of
and compliance with this Agreement, (iv) all rating agency fees, (v) all fees
and disbursements relating to the qualification of the Indenture under
applicable securities laws, (vi) the fees and disbursements of the Trustee and
its counsel, (vii) the fees and disbursements of counsel for the Company and, in
the case of a Shelf Registration Statement, the fees and disbursements of one
counsel for the Holders (which counsel shall be selected by the Majority Holders
and which counsel may also be counsel for the Initial Purchasers) and (viii) the
fees and disbursements of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, but excluding fees and
expenses of counsel to the underwriters (other than fees and expenses set forth
in clause (ii) above) or the Holders and underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of Transfer
Restricted Notes by a Holder.
"Registration Statement" means any Exchange Offer Registration
Statement or Shelf Registration Statement that covers any of the Transfer
Restricted Notes (including any guarantees of each thereof) pursuant to the
provisions of this Agreement, amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto, and all material
incorporated by reference therein.
"Shelf Registration" means a registration effected pursuant to
Section 3 hereof.
"Shelf Registration Event Date" has the meaning set forth in Section
3(a) hereof.
"Shelf Registration Period" has the meaning set forth in Section
3(c) hereof.
"Shelf Registration Statement" means a "shelf" registration
statement of the Company filed pursuant to the provisions of Section 3 hereof,
which covers some or all of the Transfer Restricted Notes, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, and which may be in the format of an amendment to the
Exchange Offer Registration Statement if permitted by the Commission, all
amendments and supplements to such registration statement, including
post-effective
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amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Transfer Restricted Notes" means each Note upon original issuance
thereof and at all times subsequent thereto, each Exchange Note received by a
Participating Broker-Dealer or as to which Section 3(a)(v) applies upon original
issuance and at all times subsequent thereto, until in the case of any such Note
or Exchange Note, as the case may be, the earliest to occur of (i) the date on
which such Note has been exchanged by a person other than a Participating
Broker-Dealer for an Exchange Note (other than with respect to an Exchange Note
as to which Section 3(a)(v) applies), (ii) with respect to Exchange Notes
received by Participating Broker-Dealers in the Registered Exchange Offer, the
date on which such Exchange Note has been sold by such Participating
Broker-Dealer by means of the Prospectus contained in the Exchange Offer
Registration Statement, (iii) a Shelf Registration Statement covering such Note
or Exchange Note, as the case may be, has been declared effective by the
Commission and such Note or Exchange Note, as the case may be, has been disposed
of in accordance with the plan of distribution set forth in such effective Shelf
Registration Statement, (iv) the date on which all such Notes or Exchange Notes,
as the case may be, can be sold without any limitations under clauses (c), (e),
(f) or (h) of Rule 144 under the Act or any similar rule that may be adopted by
the Commission, (v) the date on which such Note or Exchange Note, as the case
may be, is distributed to the public pursuant to Rule 144 under circumstances in
which any legend borne by such Note relating to restrictions on transferability
thereof, under the Act or otherwise, is removed by the Company, or (vi) such
Note or Exchange Note, as the case may be, ceases to be outstanding for purposes
of the Indenture.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trustee" means the trustee with respect to the Notes or Exchange
Notes, as applicable, under the Indenture.
2. Registered Exchange Offer; Resales of Exchange Notes by
Participating Broker-Dealers; Private Exchange. (a) The Company and the
Guarantors shall prepare and, not later than 90 days from the Closing Date,
shall file with the Commission the Exchange Offer Registration Statement with
respect to the Registered Exchange Offer (the date of such filing hereinafter
referred to as the "Filing Date"). The Company and the Guarantors shall use
their commercially reasonable best efforts to cause the Exchange Offer
Registration Statement to be declared effective under the Act within 180 days
from the Closing Date. The Company shall commence the Registered Exchange Offer
promptly after the Exchange Offer Registration Statement has been declared
effective by the Commission and use its commercially reasonable best efforts to
Consummate the Registered Exchange Offer within 40 days (or, if such 40th day is
not a Business Day, the first Business Day thereafter) from the date the
Exchange Offer Registration Statement becomes effective.
(b) The objective of such Registered Exchange Offer is to enable
each Holder electing to exchange Transfer Restricted Notes for Exchange Notes
(assuming that such Holder (x) is not an Affiliate of the Company, (y) is not a
broker-dealer that acquired the Transfer Restricted Notes in a transaction other
than as a part of its market-making or other trading activities and (z) if such
Holder is not a broker-dealer, acquires the Exchange Notes in the
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ordinary course of such Holder's business, is not participating in the
distribution of the Exchange Notes and has no arrangements or intentions with
any person to make a distribution of the Exchange Notes) to resell such Exchange
Notes from and after their receipt without any limitations or restrictions under
the Act and without material restrictions under the securities laws of a
substantial proportion of the several states of the United States. Each Holder
participating in the Registered Exchange Offer shall be required to represent to
the Company that at the time of the tender of its Notes pursuant to the
Registered Exchange Offer each of the items listed in subsections (x), (y) and
(z) of this Section 2(b) is true.
(c) In connection with the Registered Exchange Offer, the Company
shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for acceptance for not
less than 20 Business Days (or longer if required by applicable law) after
the date notice thereof is mailed to Holders;
(iii) permit Holders to withdraw tendered Notes at any time prior to
5:00 p.m. New York City time on the last Business Day on which the
Registered Exchange Offer shall remain open;
(iv) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of
New York; and
(v) comply in all material respects with all applicable laws
relating to the Registered Exchange Offer.
(d) The Company and the Guarantors may suspend the use of the
Prospectus in connection with the resale of Exchange Notes for a period not to
exceed 30 days in any six-month period or an aggregate of 45 days in any
twelve-month period for valid business reasons (not including avoidance of their
obligations hereunder) to avoid premature public disclosure of a pending
corporate transaction, including pending acquisitions or divestitures of assets,
mergers and combinations and similar events; provided that (i) the Company and
the Guarantors promptly thereafter comply with the requirements of Section 5(k)
hereof, if applicable, (ii) the period during which the Registration Statement
is required to be effective and usable shall be extended by the number of days
during which such Registration Statement was not effective or usable pursuant to
the foregoing provisions and (iii) Additional Interest shall accrue on the Notes
as provided in Section 4 hereof.
(e) As soon as practicable after the close of the Registered
Exchange Offer, the Company shall:
(i) accept for exchange all the Notes validly tendered and not
withdrawn pursuant to the Registered Exchange Offer;
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(ii) deliver to the Trustee for cancellation all of the Notes so
accepted for exchange; and
(iii) execute and cause the Trustee promptly to authenticate and
deliver to each Holder Exchange Notes equal in principal amount to the
Transfer Restricted Notes of such Holder so accepted for exchange.
(f) The Initial Purchasers and the Company acknowledge that,
pursuant to interpretations by the staff of the Commission of Section 5 of the
Act, and in the absence of an applicable exemption therefrom, each Participating
Broker-Dealer is required to deliver a prospectus meeting the requirements of
the Act in connection with a sale of any Exchange Notes received by such
Participating Broker-Dealer pursuant to the Registered Exchange Offer in
exchange for Transfer Restricted Notes acquired for its own account as a result
of market-making activities or other trading activities. Accordingly, the
Company will allow Participating Broker-Dealers and other persons, if any, with
similar prospectus delivery requirements to use the Prospectus contained in the
Exchange Offer Registration Statement during the Exchange Offer Registration
Period in connection with the resale of such Exchange Notes and shall:
(i) include the information set forth in (A) Annex A hereto on the
cover of the Prospectus forming a part of the Exchange Offer Registration
Statement; (B) Annex B hereto in the forepart of the Prospectus forming a
part of the Exchange Offer Registration Statement in a section setting
forth details of the Registered Exchange Offer; (C) Annex C hereto in the
plan of distribution section of the Prospectus forming a part of the
Exchange Offer Registration Statement, and (D) Annex D hereto in the
letter of transmittal delivered pursuant to the Registered Exchange Offer,
in each case substantially in the form specified therein, subject to
applicable Commission requirements; and
(ii) use its best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act during the Exchange Offer
Registration Period for delivery of the Prospectus included therein by
Participating Broker-Dealers in connection with sales of Exchange Notes
received pursuant to the Registered Exchange Offer, as contemplated by
Section 5(h) below.
(g) In the event that any of the Initial Purchasers determines that
it is not eligible to participate in the Registered Exchange Offer with respect
to the exchange of Transfer Restricted Notes constituting any portion of an
unsold allotment, at the request of the Initial Purchaser, the Company shall
issue and deliver to such Initial Purchaser, or to any party purchasing Transfer
Restricted Notes or Exchange Notes registered under the Shelf Registration
Statement from the Initial Purchasers, in exchange for such Transfer Restricted
Notes, a like principal amount of Exchange Notes to the extent permitted by
applicable law (the "Private Exchange Notes"). The Company shall use its
reasonable best efforts to cause the CUSIP Service Bureau to issue the same
CUSIP number for such Private Exchange Notes as for Exchange Notes issued
pursuant to the Registered Exchange Offer.
3. Shelf Registration. (a) If (i) the Company and the Guarantors are
not permitted to file the Exchange Offer Registration Statement or to Consummate
the Registered Exchange
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Offer in accordance with Section 2 hereof because the Registered Exchange Offer
is not permitted by applicable law or the applicable interpretations of the
staff of the Commission, (ii) for any other reason the Registered Exchange Offer
is not Consummated within 220 days after the Closing Date, (iii) any Holder
notifies the Company on or prior to the 30th day following the Consummation of
the Registered Exchange Offer that (A) such Holder is not eligible to
participate in the Registered Exchange Offer due to applicable law or the
applicable interpretations of the staff of the Commission, (B) the Exchange
Notes such Holder would receive would not be freely tradable, (C) such Holder is
a Participating Broker-Dealer that cannot publicly resell the Exchange Notes
that it acquires in the Registered Exchange Offer without delivering a
Prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for resales following the Consummation
of the Registered Exchange Offer, or (D) the Holder is a broker-dealer and owns
Notes it has not exchanged and that it acquired directly from the Company or one
of its Affiliates, (iv) an Initial Purchaser so requests with respect to Notes
that are not eligible to be exchanged for Exchange Notes in the Registered
Exchange Offer and are held by it following Consummation of the Registered
Exchange Offer, or (v) in the case where an Initial Purchaser participates in
the Registered Exchange Offer or acquires Private Exchange Notes pursuant to
Section 2(f) hereof, the Initial Purchaser does not receive freely tradable
Exchange Notes in exchange for Notes constituting any portion of an unsold
allotment (it being understood that, for purposes of this Section 3, (x) the
requirement that the Initial Purchaser deliver a Prospectus containing the
information required by Items 507 and/or 508 of Regulation S-K under the Act in
connection with sales of Exchange Notes acquired in exchange for such Transfer
Restricted Notes shall result in such Exchange Notes being not "freely tradable"
and (y) the requirement that a Participating Broker-Dealer deliver a Prospectus
in connection with sales of Exchange Notes acquired in the Registered Exchange
Offer in exchange for Transfer Restricted Notes acquired as a result of
market-making activities or other trading activities shall not result in such
Exchange Notes being not "freely tradable") (the date on which any event
specified in clause (i) through (v) above occurs, the "Shelf Registration Event
Date"), the following provisions shall apply:
(b) The Company and the Guarantors shall use commercially reasonable
best efforts (i) on or prior to the 45th day following such Shelf Registration
Event Date, to prepare and file with the Commission a Shelf Registration
Statement relating to the offer and sale of the Notes and the Exchange Notes, as
applicable, by the Holders thereof from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement, and (ii) to cause the Shelf Registration Statement to be
declared effective by the Commission within 60 days after the filing of the
Shelf Registration Statement. With respect to Exchange Notes received by an
Initial Purchaser in exchange for Notes constituting any portion of an unsold
allotment, the Company may, if permitted by current interpretations by the
Commission's staff, file a post-effective amendment to the Exchange Offer
Registration Statement containing the information required by Regulation S-K
Items 507 and/or 508, as applicable, in satisfaction of its obligations under
this paragraph (b) with respect thereto, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration Statement.
(c) The Company and the Guarantors shall use commercially reasonable
best efforts to keep such Shelf Registration Statement continuously effective,
supplemented and amended as required by the Act in order to permit the
Prospectus forming a part thereof to be
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usable by Holders until the earlier of (i) two years from the date the Shelf
Registration Statement has been declared effective exclusive of any period
during which any stop order shall be in effect suspending the effectiveness of
the Shelf Registration Statement, and (ii) such time as there are no longer any
Transfer Restricted Securities outstanding (the "Shelf Registration Period").
The Company and the Guarantors shall be deemed not to have used commercially
reasonable best efforts to keep the Shelf Registration Statement effective
during the Shelf Registration Period if they voluntarily take any action that
would result in Holders of the Notes or Exchange Notes covered thereby not being
able to offer and sell such notes during that period, unless such action is (x)
required by applicable law or (y) pursuant to Section 3(d) hereof and, in either
case, so long as the Company and the Guarantors promptly thereafter comply with
the requirements of Section 5(k) hereof, if applicable.
(d) The Company and the Guarantors may suspend the use of the
Prospectus that forms a part of the Shelf Registration Statement for a period
not to exceed 30 days in any six-month period or an aggregate of 45 days in any
twelve-month period for valid business reasons (not including avoidance of its
obligations hereunder) to avoid premature public disclosure of a pending
corporate transaction, including pending acquisitions or divestitures of assets,
mergers and combinations and similar events; provided that (i) the Company
promptly thereafter complies with the requirements of Section 5(k) hereof, if
applicable; (ii) the period during which the Shelf Registration Statement is
required to be effective and usable shall be extended by the number of days
during which such Shelf Registration Statement was not effective or usable
pursuant to the foregoing provisions; and (iii) the Additional Interest shall
accrue on the Notes as provided in Section 4 hereof.
(e) No Holder of Transfer Restricted Notes may include any of its
Transfer Restricted Notes in any Shelf Registration Statement pursuant to this
Agreement unless and until such Holder furnishes to the Company and the
Guarantors in writing, within 15 days after receipt of a written request
therefor, such information as the Company and the Guarantors may reasonably
request for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Notes shall be entitled to Additional Interest pursuant to Section 4
hereof unless and until such Holder shall have provided all such reasonably
requested information. Each Holder of Transfer Restricted Notes as to which any
Shelf Registration Statement is being effected agrees to furnish promptly to the
Company and the Guarantors all information required to be disclosed in order to
make the information previously furnished to the Company and the Guarantors by
such Holder not misleading.
4. Additional Interest.
(a) The parties hereto agree that Holders of Transfer Restricted
Notes will suffer damages if the Company and the Guarantors fail to perform
their obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages. Accordingly, in the event that
(i) the applicable Registration Statement is not filed with the Commission on or
prior to the date specified herein for such filing, (ii) the applicable
Registration Statement has not been declared effective by the Commission on or
prior to the date specified herein for such effectiveness after such obligation
arises, (iii) if the Registered Exchange Offer is required to be Consummated
hereunder, the Registered Exchange Offer has
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not been Consummated by the Company within the time period set forth in Section
2(a) hereof, (iv) prior to the end of the Exchange Offer Registration Period or
the Shelf Registration Period, the Commission shall have issued a stop order
suspending the effectiveness of the Exchange Offer Registration Statement or the
Shelf Registration Statement, as the case may be, or proceedings have been
initiated with respect to the Registration Statement under Section 8(d) or 8(e)
of the Act, or (v) the Prospectus forming a part of a Registration Statement
ceases to be useable in connection with resales of the Transfer Restricted Notes
covered by such Registration Statement prior to the end of the Exchange Offer
Registration Period or the Shelf Registration Period (whether or not as a result
of the initiation of a suspension period pursuant to Section 2(d) or 3(d)
hereof) (each such event referred to in clauses (i) through (v), a "Registration
Default"), then additional interest with respect to the Transfer Restricted
Notes ("Additional Interest") will accrue with respect to the first 90-day
period (or any portion thereof) immediately following the occurrence of such
Registration Default in an amount equal to 0.25% per annum per $1,000 principal
amount of such Notes and will increase by an additional 0.25% per annum per
$1,000 principal amount of such Notes for each subsequent 90-day period (or any
portion thereof) until such Registration Default has been cured, up to an
aggregate maximum amount of Additional Interest of 1.0% per annum per $1,000
principal amount of Notes for all Registration Defaults. Following the cure of a
Registration Default, the accrual of Additional Interest with respect to such
Registration Default will cease with respect to that Registration Default.
(b) The Company shall notify the Trustee and paying agent under the
Indenture (or the trustee and paying agent under such other indenture under
which any Transfer Restricted Notes are issued) immediately upon the happening
of each and every Registration Default. The Company shall pay the Additional
Interest due on the Transfer Restricted Notes by depositing with the paying
agent (which shall not be the Company for these purposes) for the Transfer
Restricted Notes, in trust, for the benefit of the Holders thereof, prior to
11:00 a.m. on the next interest payment date specified in the Indenture (or such
other indenture), sums sufficient to pay the Additional Interest then due. The
Additional Interest due shall be payable on each interest payment date specified
by the Indenture (or such other indenture) to the record holders entitled to
receive the interest payment to be made on such date. Each obligation to pay
Additional Interest shall be deemed to accrue from and include the date of the
applicable Registration Default to, but excluding, the relevant interest payment
date.
(c) All of the Company's and the Guarantors' obligations set forth
in this Section 4 which are outstanding with respect to any Transfer Restricted
Note at the time such Note ceases to be covered by an effective Registration
Statement shall survive until such time as all such obligations with respect to
such Transfer Restricted Note have been satisfied in full (notwithstanding
termination of this Agreement).
5. Registration Procedures. In connection with any Exchange Offer
Registration Statement and, to the extent applicable, any Shelf Registration
Statement, the following provisions shall apply:
(a) The Company shall furnish to the Initial Purchasers, not less
than 5 Business Days prior to the filing thereof with the Commission, a copy of
any Registration Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein (including all documents
incorporated by reference therein) and shall use their best
10
efforts to reflect in each such document, when so filed with the Commission,
such comments as the Initial Purchasers may propose.
(b) The Company shall ensure that:
(i) any Registration Statement and any amendment thereto and any
Prospectus contained therein and any amendment or supplement thereto
complies in all material respects with the Act;
(ii) any Registration Statement and any post-effective amendment
thereto does not, when it becomes effective, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(iii) any Prospectus forming part of any Registration Statement,
including any amendment or supplement to such Prospectus, does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) (1) The Company shall advise the Initial Purchasers and, in the
case of a Shelf Registration Statement, the Holders of Transfer Restricted Notes
covered thereby, and, if requested by the Initial Purchasers or any such Holder,
confirm such advice in writing:
(i) when a Registration Statement and any amendment thereto has been
filed with the Commission and when the Registration Statement or any
post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus included therein or for
additional information.
(2) The Company shall advise the Initial Purchasers and, in the case
of a Shelf Registration Statement, the Holders of Transfer Restricted Notes
covered thereby, and, in the case of an Exchange Offer Registration Statement,
any Participating Broker-Dealer that has provided in writing to the Company a
telephone or facsimile number or address for notices, and, if requested by the
Initial Purchasers or any such Holder or Participating Broker-Dealer, confirm
such advice in writing:
(i) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
(ii) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Transfer Restricted Notes
included in any Registration Statement for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of any
changes in the Registration Statement or the Prospectus so that, as of
such date, the Registration
11
Statement and the Prospectus do not contain an untrue statement of a
material fact and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been
made).
(d) The Company and the Guarantors shall use their commercially
reasonable best efforts to file any amendments or supplements to a Registration
Statement or Prospectus requested by the Commission and obtain the withdrawal of
any order suspending the effectiveness of any Registration Statement or the
qualification of the Transfer Restricted Notes covered thereby for sale in any
jurisdiction, in each case at the earliest possible time.
(e) The Company shall furnish to each Holder of Transfer Restricted
Notes included in any Shelf Registration Statement, without charge, at least one
copy of such Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, any documents
incorporated by reference therein and, if the Holder so requests in writing, all
exhibits thereto (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Transfer Restricted Notes included in any Shelf Registration
Statement, without charge, as many copies of the Prospectus (including any
preliminary Prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder may reasonably request; and the
Company consents to the use of the Prospectus (including any preliminary
prospectus) or any amendment or supplement thereto by each of the selling
Holders of Transfer Restricted Notes in connection with the offering and sale of
the Transfer Restricted Notes covered by the Prospectus or any amendment or
supplement thereto.
(g) The Company shall furnish to each Participating Broker-Dealer
that so requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, any documents incorporated by reference
therein and, if the Participating Broker-Dealer so requests in writing, all
exhibits thereto (including those incorporated by reference).
(h) The Company shall, during the Exchange Offer Registration Period
and pursuant to the requirements of the Act for the resale of the Exchange Notes
during the period in which a prospectus is required to be delivered under the
Act (including any Commission no-action letters relating to the Registered
Exchange Offer), deliver to each Participating Broker-Dealer, without charge, as
many copies of the Prospectus (including any preliminary Prospectus) included in
such Exchange Offer Registration Statement and any amendment or supplement
thereto as such Participating Broker-Dealer may reasonably request; and the
Company and the Guarantors consent to the use of the Prospectus (including any
preliminary prospectus) or any amendment or supplement thereto by any such
Participating Broker-Dealer in connection with the offering and sale of the
Exchange Notes, as provided in Section 2(e) above.
(i) Prior to the Registered Exchange Offer or any other offering of
Transfer Restricted Notes pursuant to any Registration Statement, the Company
and the Guarantors shall
12
use their commercially reasonable best efforts to register, qualify or cooperate
with the Holders of Transfer Restricted Notes included therein and their
respective counsel in connection with the registration or qualification of such
Transfer Restricted Notes for offer and sale under the securities or blue sky
laws of such states as any such Holders reasonably request in writing and do any
and all other commercially reasonable acts or things necessary or advisable to
enable the offer and sale in such jurisdictions of the Transfer Restricted Notes
covered by such Registration Statement.
(j) The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer Restricted
Notes to be sold pursuant to any Registration Statement free of any restrictive
legends and in denominations authorized by the Indenture and registered in such
names as Holders may request.
(k) Upon the occurrence of any event contemplated by Section 2(d),
Section 3(d) or paragraph (c)(2)(iii) of this Section 5, the Company and the
Guarantors shall promptly prepare and file a post-effective amendment to any
Registration Statement or an amendment or supplement to the related Prospectus
or any other required document so that, as thereafter delivered to purchasers of
the Transfer Restricted Notes included therein, the Prospectus will not include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(l) The Company shall use its best efforts to cause The Depository
Trust Company ("DTC") on the first Business Day following the effective date of
any Registration Statement hereunder or as soon as possible thereafter to remove
(i) from any existing CUSIP number assigned to the Transfer Restricted Notes or
Exchange Notes, as the case may be, any designation indicating that such notes
are "restricted securities," which efforts shall include delivery to DTC of a
letter executed by the Company substantially in the form of Annex E hereto and
(ii) any other stop or restriction on DTC's system with respect to the Transfer
Restricted Notes or Exchange Notes, as the case may be. In the event the Company
is unable to cause DTC to take actions described in the immediately preceding
sentence, the Company shall take such actions as the Initial Purchasers may
request to provide, as soon as practicable, a new CUSIP (if not already
obtained) number for the Transfer Restricted Notes or Exchange Notes registered
under such Registration Statement and to cause such CUSIP number to be assigned
to the Transfer Restricted Notes or Exchange Notes (or to the maximum aggregate
principal amount of the securities to which such number may be assigned).
(m) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to the security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Act and Rule 158 promulgated thereunder.
(n) The Company shall cause the Indenture to be qualified under the
Trust Indenture Act in a timely manner.
13
(o) The Company may require each Holder of Transfer Restricted Notes
to be sold pursuant to any Shelf Registration Statement to furnish to the
Company such information regarding the Holder and the distribution of such
Transfer Restricted Notes as may, from time to time, be required by the Act, and
the obligations of the Company to any Holder hereunder shall be expressly
conditioned on the compliance of such Holder with such request.
(p) The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement (i) such information as the Majority Holders provide or, if the
Transfer Restricted Notes are being sold in an underwritten offering, as the
Managing Underwriters and the Majority Holders reasonably agree should be
included therein and, in either case, provided to the Company in writing for
inclusion in the Shelf Registration Statement, or Prospectus, and (ii) such
information as a Holder may provide from time to time to the Company in writing
for inclusion in a Prospectus or any Shelf Registration Statement, in the case
of clause (i) or (ii) above, concerning such Holder and/or underwriter and the
distribution of such Holder's Transfer Restricted Notes and, in either case,
shall make all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after being notified in writing of the matters
to be incorporated in such Prospectus supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Company and
the Guarantors shall enter into such agreements (including underwriting
agreements) and take all other customary and appropriate actions as may be
reasonably requested in order to expedite or facilitate the registration or the
disposition of any Transfer Restricted Notes, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable than those set forth
in Section 8 (or such other provisions and procedures reasonably acceptable to
the Majority Holders and the Managing Underwriters, if any, with respect to all
parties to be indemnified pursuant to Section 8).
(r) In the case of any Shelf Registration Statement, and if
requested by an Initial Purchaser in connection with resales of Transferred
Restricted Notes under the Exchange Offer Registration Statement, the Company
shall:
(i) make reasonably available for inspection by the Holders of
Transfer Restricted Notes to be registered thereunder, any Managing
Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent
retained by the Holders or any such Managing Underwriter, all relevant
financial and other records, pertinent corporate documents and properties
of the Company and any of its subsidiaries, provided, however, that the
foregoing inspection and the information gathering provided for in Section
5(r)(ii) shall be conducted on behalf of the Holders by one counsel
designated by the Managing Underwriter or in the absence of any Managing
Underwriter by the Majority Holders;
(ii) cause the Company's officers, directors and employees to supply
all relevant information reasonably requested by the Holders or any such
Managing Underwriter, attorney, accountant or agent in connection with any
such Registration Statement as is customary for similar due diligence
examinations; provided, however,
14
that any information that is designated in writing by the Company in good
faith as confidential at the time of delivery of such information shall be
kept confidential by the Holders or any such Managing Underwriter,
attorney, accountant or agent, unless (x) disclosure thereof is made in
connection with a court proceeding or required by law; provided that each
Holder and any such Managing Underwriter, attorney, accountant or agent
will, upon learning that disclosure of such information is sought in a
court proceeding or required by law, give notice to the Company to allow
the Company to undertake appropriate action to prevent disclosure at the
Company's sole expense, or (y) such information has previously been made
or becomes available to the public generally through the Company or
through a third party without an accompanying obligation of
confidentiality;
(iii) make such representations, warranties and covenants to the
Holders of Transfer Restricted Notes registered thereunder and the
Managing Underwriters, if any, in form, substance and scope as are
customarily made in comparable transactions and covering matters
including, but not limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions, in form, scope and substance, shall be
reasonably satisfactory to the Managing Underwriters, if any, or, in the
absence of any Managing Underwriter, by the Majority Holders) addressed to
each selling Holder and the Managing Underwriters, if any, covering such
matters as are customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
Holders and Managing Underwriters;
(v) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each selling Holder
of the Transfer Restricted Notes covered by such Shelf Registration
Statement (provided such Holder furnishes the accountants with such
representations as the accountants customarily require in similar
situations) and the Managing Underwriters, if any, in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with primary underwritten offerings; and
(vi) deliver such documents and certificates as may be reasonably
requested by the Majority Holders and the Managing Underwriters, if any,
including those to evidence compliance with Section 5(k) and with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company or a Guarantor.
The foregoing actions set forth in this Section 5(r) shall be
performed at (i) the effectiveness of such Shelf Registration Statement and each
post-effective amendment thereto and (ii) each closing under any underwriting or
similar agreement as and to the extent required thereunder.
15
(s) If a Registered Exchange Offer is to be consummated, upon
delivery of the Notes by Holders to the Company (or to such other Person as
directed by the Company) in exchange for the Exchange Notes, the Company shall
▇▇▇▇, or caused to be marked, on the Notes so exchanged that such Notes are
being canceled in exchange for the Exchange Notes. In no event shall the Notes
be marked as paid or otherwise satisfied.
(t) The Company shall use its commercially reasonable best efforts
to confirm that the ratings applicable to the Transfer Restricted Notes will
apply to the Notes covered by a Registration Statement.
(u) In the event that any broker-dealer shall underwrite any Notes
or Exchange Notes or participate as a member of an underwriting syndicate or
selling group or "assist in the distribution" (within the meaning of the Rules
of Fair Practice and the By-Laws of the National Association of Securities
Dealers, Inc.) thereof, whether as a Holder of such Notes or Exchange Notes or
as an underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company and the Guarantors shall assist such
broker-dealer in complying with the requirements of such Rules and By-Laws,
including, without limitation, by:
(i) if such Rules or By-Laws shall so require, engaging a "qualified
independent underwriter" (as defined in such Rules) at the expense of such
broker-dealer or the Holders to participate in the preparation of the
Registration Statement, to exercise usual standards of due diligence with
respect thereto and, if any portion of the offering contemplated by such
Registration Statement is an underwritten offering or is made through a
placement or sales agent, to recommend the yield of such Notes or Exchange
Notes;
(ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 8
hereof; and
(iii) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the requirements
of such Rules.
(v) The Company and the Guarantors shall use commercially reasonable
best efforts to take all other steps necessary to effect the registration of the
Notes or the Exchange Notes, as the case may be, covered by a Registration
Statement as contemplated by, and in accordance with the terms of, this
Agreement.
(w) Each Holder of Notes or Exchange Notes, as applicable, to be
registered for resale pursuant to a Registration Statement agrees by acquisition
of such Notes or Exchange Notes, as the case may be, that, upon the occurrence
of any event contemplated by subsection (c)(2) above during the period for which
the Company is required to maintain the effectiveness of the Registration
Statement, such Holder will, upon written notice thereof from the Company,
discontinue disposition of such Notes or Exchange Notes, as applicable, under
such Registration Statement until such Holder's receipt of copies of the
supplemented or amended Prospectus contemplated in subsection (k) above, or
until advised in writing by the Company that the use of the applicable
Prospectus may be resumed.
16
(x) The Company and the Guarantors shall, if and to the extent
required under the Act and/or the Trust Indenture Act and the rules and
regulations thereunder in order to register the Note guarantee under the Act and
qualify the Indenture under the Trust Indenture Act, cause each guarantor, if
any, to sign any Registration Statement and take all other action necessary to
register the Note guarantee under the applicable Registration Statement.
(y) If in the reasonable opinion of counsel to the Company there is
a question as to whether the Registered Exchange Offer is permitted by
applicable law, the Company and the Guarantors hereby agree to seek a no-action
letter or other favorable decision from the Commission allowing the Company and
the Guarantors to consummate a Registered Exchange Offer for such Transfer
Restricted Notes. The Company and the Guarantors each hereby agrees to pursue
the issuance of such a decision to the Commission staff level but shall not be
required to take commercially unreasonable action to effect a change of
Commission policy. The Company and the Guarantors each hereby agrees, however,
to (A) participate in telephonic conferences with the Commission, (B) deliver to
the Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that such a
Registered Exchange Offer should be permitted and (C) diligently pursue a
favorable resolution by the Commission staff of such submission.
6. Registration Expenses. The Company shall bear all Registration
Expenses incurred in connection with the performance of their obligations under
Sections 2, 3, 4 and 5 hereof, and, in connection with the Shelf Registration
Statement, shall reimburse the Holders for the reasonable fees and disbursements
of Mayer, Brown, ▇▇▇▇ & Maw LLP to act as counsel for the Holders in connection
therewith.
7. Rules 144 and 144A. The Company and the Guarantors shall use
their best efforts to file the reports required to be filed by them under the
Act and the Exchange Act in a timely manner and, if at any time the Company is
not required to file such reports, it will, upon the request of any Holder of
Transfer Restricted Notes, make publicly available other information so long as
necessary to permit sales of their securities pursuant to Rules 144 and 144A (or
any successor rule adopted by the Commission). The Company and the Guarantors
each covenant that it will take such further action as any Holder of Transfer
Restricted Notes may reasonably request, all to the extent required from time to
time to enable such Holder to sell Transfer Restricted Notes without
registration under the Securities Act within the limitation of the exemptions
provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4) if
applicable). The Company will provide a copy of this Agreement to prospective
purchasers of Transfer Restricted Notes identified to the Company by any Initial
Purchaser upon request. Upon the request of any Holder of Transfer Restricted
Notes, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.
8. Indemnification and Contribution.
(a) (i) In connection with any Registration Statement, the Company
and each Guarantor, jointly and severally, agrees to indemnify and hold
harmless each Holder of Transfer Restricted Notes covered thereby, the
directors, officers and employees of each such Holder and each person who
controls any such Holder within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any Losses, joint or
17
several, to which they or such controlling person may become subject,
insofar as such Losses (or actions in respect thereof) arise out of or are
based upon (x) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement as originally filed
or in any amendment thereof, in any preliminary Prospectus or Prospectus
or in any amendment thereof or supplement thereto, or (y) the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse, as incurred, each such indemnified party for any legal or
other expenses reasonably incurred by them in connection with
investigating, defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action;
provided, however, that (A) the Company and the Guarantors will not be
liable in any such case to the extent that any such Loss arises out of or
is based upon (i) any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information relating to the Holder furnished to
the Company by any such Holder specifically for inclusion therein, or (ii)
use of a Registration Statement or related Prospectus during a period when
a stop order has been issued in respect of such Registration Statement or
any proceedings for that purpose have been initiated or use of a
Prospectus when use of such Prospectus has been suspended pursuant to
Section 2(d), 3(d) or 5(c)(2) hereof, provided that in each such case,
such Holder received prior written notice of such stop order, initiation
of proceedings or suspension from the Company; and (B) the foregoing
indemnity agreement with respect to a preliminary Prospectus shall not
inure to the benefit of any Holder who failed to deliver a final
Prospectus, provided by the Company to the Holder on a timely basis to
permit proper delivery to the person asserting any Losses caused by any
untrue statement or alleged untrue statement of a material fact contained
in the preliminary Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, if a court of competent
jurisdiction, in a decision not subject to further appeal, determines that
(i) such material misstatement or omission was cured in such final
Prospectus, (ii) such final Prospectus was required by law to be delivered
by the Holder to such person and (iii) delivery of such final Prospectus
would have precluded such person from recovering for such losses, claims,
damages and liabilities. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(ii) The Company and each Guarantor, jointly and severally, also
agrees to indemnify or contribute to Losses, as provided in Section 8(d),
of each underwriter of Transfer Restricted Notes registered under a
Registration Statement, their officers and directors and each person who
controls such underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act on substantially the same basis as that of
the indemnification of the selling Holders provided in this Section 8(a)
and shall, if requested by any Holder, enter into an underwriting
agreement reflecting such agreement, as provided in Section 5(q) hereof.
(b) Each Holder of Transfer Restricted Notes covered by a
Registration Statement severally agrees to indemnify and hold harmless the
Company and the Guarantors and their respective directors, officers, employees
and agents and each person, if any, who controls the Company or the Guarantors
within the meaning of Section 15 of the Act or Section 20 of the
18
Exchange Act against any Losses, joint or several, to which they or such
controlling persons become subject, insofar as such Losses (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement as originally filed or in any amendment thereof, in any preliminary
Prospectus or Prospectus or in any amendment thereof or supplement thereto, or
(y) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse, as incurred, each such indemnified party for any legal or
other expenses reasonably incurred by them in connection with investigating,
defending against, or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action but only if and to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
relating to such Holder furnished to the Company by such Holder specifically for
inclusion therein. This indemnity agreement will be in addition to any liability
which any such Holder may otherwise have.
(c) Promptly after receipt by any person to whom indemnity may be
available under this Section 8 (the "indemnified party") of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against any person from whom indemnity may be sought under
this Section 8 (the "indemnifying party"), notify such indemnifying party of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
as determined by a court of competent jurisdiction and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. In case any such action is brought against any indemnified party, and
such indemnified party notifies the relevant indemnifying party of the
commencement thereof, such indemnifying party will be entitled to participate
therein and, to the extent that it may wish, to assume the defense thereof,
jointly with any other indemnifying party similarly notified, with counsel
satisfactory to such indemnified party; provided, however, that if the named
parties in any such action (including impleaded parties) include both the
indemnified party and the indemnifying party and the indemnified party shall
have concluded, based on advice of outside counsel, that there may be one or
more legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party or
that representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them, the indemnifying
party shall not have the right to direct the defense of such action on behalf of
such indemnified party or parties and such indemnified party or parties shall
have the right to select a single national counsel and one local firm in each
jurisdiction to defend such action on behalf of such indemnified party or
parties. After notice from an indemnifying party to an indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, such indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) such
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence or (ii) such indemnifying party
does not promptly retain counsel satisfactory to such indemnified party or (iii)
such indemnifying party has authorized the employment of counsel for
19
such indemnified party at the expense of the indemnifying party. After such
notice from an indemnifying party to an indemnified party, such indemnifying
party will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the written consent of such
indemnifying party. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by (i), (ii)
or (iii) of the third sentence of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (x) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (y) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. An indemnifying party
will not, without the prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not the indemnified party or any other person that
may be entitled to indemnification hereunder is a party to such claim, action,
suit or proceeding) unless such settlement, compromise or consent includes an
unconditional release of the indemnified party and such other persons from all
liability arising out of such claim, action, suit or proceeding.
(d) In the circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any, losses, claims, damages or liabilities (including, without limitation,
legal or other expenses incurred in connection with investigating or defending
any action or claim) (or actions in respect thereof) (collectively "Losses")
then each indemnifying party, in order to provide for just and equitable
contribution, agrees to contribute to the amount paid or payable by such
indemnified party as a result of such Losses to which such indemnified party may
be subject (i) in such proportion as is appropriate to reflect the relative
benefits received by such indemnifying party, on the one hand, and such
indemnified party, on the other hand, from the original issuance of the Notes
under the Purchase Agreement and the Registration Statement which resulted in
such Losses, or (ii) if the allocation provided by the foregoing clause (i) is
unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses and any other relevant
equitable considerations appropriate in the circumstances. The relative fault of
the parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Guarantors, on the one hand, or such Holder or such other indemnified
person, as the case may be, on the other hand, and the parties' intent, relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other relevant equitable considerations
appropriate in the circumstances. Benefits received by the Company shall be
deemed to be equal to the sum of (x) the total net proceeds from the original
issuance and sale of the Notes (before deducting expenses) as set forth in the
Final Memorandum, and (y) the total amount of Additional Interest which the
Company was not required to pay as a result of registering the Transfer
Restricted Notes covered by the Registration Statement which resulted in such
Losses. Benefits received by any Holder (other than the Initial Purchasers)
shall be deemed
20
to be equal to the value of receiving Transfer Restricted Notes registered under
the Act. Benefits received by the Initial Purchasers shall be deemed to be equal
to the total purchase discounts and commissions as set forth in the Final
Memorandum. Benefits received by any underwriter shall be deemed to be equal to
its relative share of the total underwriting discounts and commissions, as set
forth on the cover page of the Prospectus forming a part of the Registration
Statement which resulted in such Losses. Notwithstanding any other provision of
this Section 8(d), the Holders of the Transfer Restricted Notes shall in no case
be required to contribute any amount in excess of the amount by which the net
proceeds received by such Holders from the sale of the Transfer Restricted Notes
pursuant to a Registration Statement exceeds the amount of damages which such
Holders have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission and in no case shall any
underwriter be responsible for any amount in excess of the underwriting discount
or commission applicable to the Transfer Restricted Notes purchased by such
underwriter under the Registration Statement which resulted in such Losses. The
parties agree that it would not be just and equitable if contribution were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), the Initial Purchasers shall not be obligated
to make contributions hereunder that in the aggregate exceed the total
underwriting discounts and commissions received by the Initial Purchasers from
the Company in connection with the purchase of the Notes, and no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person, if
any, who controls an indemnified party within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act and each director, officer,
employee and agent of such indemnified party shall have the same rights to
contribution as such indemnified party.
(e) The provisions of this Section 8 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, the
Company, the Guarantors or any of the directors, officers, employees, agents or
controlling persons referred to in Section 8 hereof, and will survive the sale
by a Holder of Transfer Restricted Notes covered by a Registration Statement.
9. Underwritten Registrations
If any of the Transfer Restricted Notes covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the Managing
Underwriter that will administer the offering will be selected by the Majority
Holders of such Transfer Restricted Notes included in such offering, and such
Holders shall be responsible for all underwriting commissions and discounts,
subject to the consent of the Company not to be unreasonably withheld.
No person may participate in any underwritten offering pursuant to a
Shelf Registration Statement unless such person (i) agrees to sell such person's
Transfer Restricted Notes on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all
21
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
10. Miscellaneous.
(a) No Inconsistent Agreements. Neither the Company nor any
Guarantor has, as of the date hereof, entered into nor shall it, on or after the
date hereof, enter into any agreement that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Majority Holders; provided that, with respect to any matter that
directly or indirectly affects the rights of the Initial Purchasers hereunder,
the Company shall obtain the written consent of the Initial Purchasers.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose Transfer Restricted Notes are being sold pursuant to a
Shelf Registration Statement or whose Notes are being exchanged pursuant to an
Exchange Offer Registration Statement, as the case may be, and which does not
directly or indirectly affect the rights of other Holders may be given by such
Holders, determined on the basis of Notes being sold rather than registered.
Notwithstanding any of the foregoing, no amendment, modification, supplement,
waiver or consents to any departure from the provisions of Section 8 hereof
shall be effective as against any Holder of Transfer Restricted Notes unless
consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to the Initial Purchasers, as follows:
Wachovia Capital Markets, LLC
One Wachovia Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: 704-715-6099
Attention: High-Yield Capital Markets
with a copy mailed or delivered to:
Mayer, Brown, ▇▇▇▇ & Maw LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
22
(ii) if to any other Holder, at the most current address given by
such Holder to the Company in accordance with the provisions of this
Section 10(c), which address initially is, with respect to each Holder,
the address of such Holder maintained by the registrar under the
Indenture, with a copy in like manner to the Initial Purchasers; and
(iii) if to the Company or the Guarantors, as follows:
Movie Gallery, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
with a copy mailed or delivered to:
▇▇▇▇▇▇ & Bird
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
All such notices and communications shall be deemed to have been
duly given when received, if delivered by hand or air courier, and when sent, if
sent by first-class mail, telex or facsimile.
The Company by notice to the others may designate additional or
different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company or any Guarantor thereto, subsequent Holders. The Company and the
Guarantors hereby agree to extend the benefits of this Agreement to any Holder
and any such Holder may specifically enforce the provisions of this Agreement as
if an original party hereto.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law and Consent to Jurisdiction. This agreement shall
be governed by and construed in accordance with the laws of the State of New
York. The Company and each Guarantor (x) submits to the nonexclusive
jurisdiction of the courts of the State of New York and of the United States
sitting in the Borough of Manhattan in respect of any action, claim or
proceeding ("Proceeding") arising out of or relating to this Agreement or the
transactions contemplated hereby, (y) irrevocably waives, to the fullest extent
permitted by applicable law,
23
any objection that it may now or hereafter have to the laying of venue of any
Proceeding in the Supreme Court of the State of New York, County of New York, or
the United States District Court for the Southern District of New York, and any
claim that any Proceeding in any such court has been brought in an inconvenient
forum, and (z) agrees that any service of process or other legal summons in
connection with any Proceeding may be served on it by mailing a copy thereof by
registered mail, or a form of mail substantially equivalent thereto, postage
prepaid, addressed to the served party at its address as provided for in Section
10(c). Nothing in this section shall affect the right of the parties to serve
process in any other manner permitted by law.
(h) Obligations of New Guarantors. If any person becomes a Guarantor
(as defined in the Indenture) after the date hereof and while the Company has
continuing obligations under this Agreement, the Company will cause such
Guarantor to become a party hereto including for purposes of registration
obligations, the guarantee of Additional Interest on a joint and several basis
and indemnification and contribution pursuant to Section 8.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(j) Notes Held by the Company, etc. Whenever the consent or approval
of Holders of a specified percentage of principal amount of Transfer Restricted
Notes or Exchange Notes is required hereunder, Transfer Restricted Notes or
Exchange Notes held by the Company or any of its Affiliates (other than
subsequent Holders of Transfer Restricted Notes or Exchange Notes if such
subsequent Holders are deemed to be Affiliates solely by reason of their
holdings of such Notes) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
(k) Remedies. In the event of a breach by either the Company or any
of the Guarantors of any of their respective obligations under this Agreement,
each Holder, in addition to being entitled to exercise all rights provided
herein, in the Indenture or, in the case of the Initial Purchasers, in the
Purchase Agreement, or granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The Company
and the Guarantors agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by either the Company
or any of the Guarantors of any of the provisions of this Agreement and hereby
further agree that, in the event of any action for specific performance in
respect of such breach, the Company shall (and shall cause each Guarantor to)
waive the defense that a remedy at law would be adequate.
[Intentionally left blank]
24
Please confirm that the foregoing correctly sets forth the agreement
between and between the Company and the Initial Purchasers.
Very truly yours,
MOVIE GALLERY, INC.
By: /s/ ▇▇▇ ▇. Malogen
---------------------------------
Name: ▇▇▇ ▇. Malogen
Title: President and Chief Executive
Officer
MOVIE GALLERY US, INC.
By: /s/ S. Page ▇▇▇▇
-----------------------------------
Name: S. Page ▇▇▇▇
Title: Executive Vice President and
Secretary
MOVIE GALLERY SERVICES, INC.
By: /s/ S. Page ▇▇▇▇
-----------------------------------
Name: S. Page ▇▇▇▇
Title: Executive Vice President and
Secretary
MOVIE GALLERY LICENSING, INC.
By: /s/ S. Page ▇▇▇▇
-----------------------------------
Name: S. Page ▇▇▇▇
Title: Vice President
and Assistant Secretary
25
MOVIE GALLERY FINANCE, INC.
By: /s/ S. Page ▇▇▇▇
-----------------------------------
Name: S. Page ▇▇▇▇
Title: Vice President
and Assistant Secretary
MOVIE GALLERY ASSET MANAGEMENT, INC.
By: /s/ S. Page ▇▇▇▇
-----------------------------------
Name: S. Page ▇▇▇▇
Title: President
M. G. A. REALTY I, INC.
By: /s/ S. Page ▇▇▇▇
-----------------------------------
Name: S. Page ▇▇▇▇
Title: Executive Vice President and
Secretary
M. G. DIGITAL, LLC
By: /s/ S. Page ▇▇▇▇
-----------------------------------
Name: S. Page ▇▇▇▇
Title: Executive Vice President and
Secretary
HOLLYWOOD ENTERTAINMENT CORPORATION
By: /s/ S. Page ▇▇▇▇
-----------------------------------
Name: S. Page ▇▇▇▇
Title: Executive Vice President
and Assistant Secretary
26
HOLLYWOOD MANAGEMENT COMPANY
By: /s/ S. Page ▇▇▇▇
---------------------------------
Name: S. Page ▇▇▇▇
Title: Executive Vice President
and Assistant Secretary
27
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
WACHOVIA CAPITAL MARKETS, LLC
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
CIBC WORLD MARKETS CORP.
Acting severally on behalf of themselves
and the several Initial Purchasers named
in Schedule I hereto
By: WACHOVIA CAPITAL MARKETS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
By: CIBC WORLD MARKETS CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
28
EXHIBIT A
Movie Gallery US, Inc.
Movie Gallery Services, Inc.
Movie Gallery Licensing, Inc.
Movie Gallery Finance, Inc.
Movie Gallery Asset Management, Inc.
M.G.A. Realty I, LLC
M.G. Digital, LLC
Hollywood Entertainment Corporation
Hollywood Management Company
A-1
ANNEX A
Each broker-dealer that receives Exchange Notes for its own account pursuant to
the Registered Exchange Offer must acknowledge that it will deliver a prospectus
in connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Act. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer during the Exchange Offer Registration
Period in connection with resales of Exchange Notes received in exchange for
Notes where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, during the Exchange Offer Registration Period, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
A-2
ANNEX B
Each broker-dealer that receives Exchange Notes for its own account in exchange
for Notes, where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Notes
during the Exchange Offer Registration Period. See "Plan of Distribution."
B-1
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Notes during the
Exchange Offer Registration Period. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Notes where such Notes
were acquired as a result of market-making activities or other trading
activities. The Company has agreed that, during the Exchange Offer Registration
Period, it will make this Prospectus, as amended or supplemented, available to
any broker-dealer for use in connection with any such resale. In addition, until
____________ 2005, all dealers effecting transactions in the Exchange Notes may
be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange
Notes by broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Registered Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells Exchange Notes that were received
by it for its own account pursuant to the Registered Exchange Offer and any
broker or dealer that participates in a distribution of such Exchange Notes may
be deemed to be an "underwriter" within the meaning of the Act and any profit
from any such resale of Exchange Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Act. The Letter of Transmittal states that by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Act.
During the Exchange Offer Registration Period, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the holders of the Notes) other than dealers' and brokers' discounts,
commissions and counsel fees and will indemnify the holders of the Notes
(including any broker-dealers) against certain liabilities, including
liabilities under the Act.
[If applicable, add information required by Regulation S-K Items 507
and/or 508.]
C-1
ANNEX D
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS
OR SUPPLEMENTS THERETO.
[ ] Name: ________________________________
Address: _____________________________
The undersigned represents that it is not an Affiliate of the
Company, that any Exchange Notes to be received by it will be acquired in the
ordinary course of business and that at the time of the commencement of the
Registered Exchange Offer it had no arrangement with any person to participate
in a distribution of the Exchange Notes.
In addition, if the undersigned is not a broker-dealer, the
undersigned represents that it is not engaged in, and does not intend to engage
in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that
will receive Exchange Notes for its own account in exchange for Notes, it
represents that the Notes to be exchanged for Exchange Notes were acquired by it
as a result of market-making activities or other trading activities and
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Notes; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Act.
D-1
ANNEX E
FORM OF LETTER TO BE PROVIDED BY THE COMPANY TO
THE DEPOSITORY TRUST COMPANY
The Depository Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: 11% Senior Notes Due 2012 (the "Notes") of Movie Gallery, Inc.
Ladies and Gentlemen:
Please be advised that the Securities and Exchange Commission has
declared effective a Registration Statement on Form S-__ under the Securities
Act of 1933, as amended, with regard to all of the Notes referenced above.
Accordingly, there is no longer any restriction as to whom such Notes may be
sold and [any restrictions on the CUSIP designation are no longer appropriate
and may be removed] [the new CUSIP number for the Notes provided should be
used]. I understand that upon receipt of this letter, DTC will remove any stop
or restriction on its system with respect to this issue.
As always, please do not hesitate to call if we can be of further
assistance.
Very truly yours,
MOVIE GALLERY, INC.
By:_________________________________
Name:
Title:
E-1
