EXHIBIT 10.1
$325,000,000
MOVIE GALLERY, INC.
(a Delaware corporation)
11% Senior Notes due 2012
PURCHASE AGREEMENT
April 25, 2005
April 25, 2005
Wachovia Capital Markets, LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
CIBC World Markets Corp.
c/o Wachovia Capital Markets, LLC
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
Movie Gallery, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several purchasers named in Schedule I hereto (the
"Initial Purchasers"), for whom Wachovia Capital Markets, LLC, Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated and CIBC World Markets Corp. are acting as
Representatives (in such capacity, the "Representatives"), $325,000,000
aggregate principal amount of its 11% Senior Notes due 2012 (the "Notes"), which
will be unconditionally guaranteed on a senior basis as to principal, premium,
if any, and interest (the "Guarantees") by the subsidiaries of the Company named
in Schedule II hereto (each individually, a "Guarantor" and collectively, the
"Guarantors"). The Notes will be issued pursuant to an Indenture (the
"Indenture") dated as of the Closing Date (as defined in Section 2) among the
Company, the Guarantors and SunTrust Bank, as Trustee (the "Trustee"). This
Agreement, the Registration Rights Agreement, to be dated the Closing Date,
between the Initial Purchasers and the Company (the "Registration Rights
Agreement") and the Indenture are hereinafter collectively referred to as the
"Transaction Documents" and the execution and delivery of the Transaction
Documents and the transactions contemplated herein and therein are hereinafter
referred to as the "Transactions".
The Notes (and the related Guarantees) will be offered and sold through
the Initial Purchasers without being registered under the Securities Act of
1933, as amended (the "Securities Act"), to qualified institutional buyers in
reliance on the exemption from registration provided by Rule 144A under the
Securities Act, and in offshore transactions in reliance on Regulation S under
the Securities Act ("Regulation S"). The Initial Purchasers have advised the
Company that they will offer and sell the Notes purchased by them hereunder in
accordance with Section 3 hereof as soon as the Representatives deem advisable.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum, dated April 15, 2005 (the "Preliminary
Memorandum") and a final offering memorandum, dated the date hereof (the "Final
Memorandum" and, with the Preliminary Memorandum, each a "Memorandum"). Each
Memorandum sets forth certain information concerning the Company, the Notes, the
Transaction Documents and the Transactions. The Company hereby confirms that it
has authorized the use of the Preliminary Memorandum and the Final Memorandum,
and any amendment or supplement thereto, in connection with the offer and sale
of the Notes by the Initial Purchasers.
1. Representations and Warranties of the Company and the Guarantors. The
Company and the Guarantors (other than Hollywood Entertainment Corporation
("Hollywood") and Hollywood Management Company (collectively, the "Hollywood
Guarantors")) jointly and severally represent and warrant to, and agree with,
each of the Initial Purchasers that:
(a) The Preliminary Memorandum does not contain, and the Final
Memorandum, in the form used by the Initial Purchasers to confirm sales
and on the Closing Date, and any amendment or supplement thereto does not
and will not contain any 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; provided,
however, that the representations or warranties set forth in this
paragraph shall not apply to statements in or omissions from either
Memorandum made in reliance upon and in conformity with information
furnished in writing to the Company by the Initial Purchasers expressly
for use therein, as specified in Section 11. The statistical and industry
data included in each Memorandum are based on or derived from sources that
the Company believes to be reliable and accurate.
(b) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Company is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect. "Material Adverse
Effect" shall mean a material adverse change in or effect on or any
development having a prospective material adverse effect on (i) the
business, operations, properties, assets, liabilities, stockholders'
equity, earnings, condition (financial or otherwise), results of
operations or management of the Company and its subsidiaries or Hollywood
and its subsidiaries, as applicable, considered as one enterprise, whether
or not in the ordinary course of business, or (ii) the ability of the
Company and each Guarantor to perform its obligations under the Notes or
the Transaction Documents.
(c) The Company and each Guarantor has full power (corporate and other)
to own or lease its properties and conduct its business as described in
each Memorandum; and the Company has full power (corporate and other) to
enter into the Transaction Documents and to carry out all the terms and
provisions hereof and thereof to be carried out by it.
(d) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Final Memorandum. All of the issued shares of
capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable; and none of the outstanding shares
of capital stock of the Company was issued in violation of the preemptive
or other similar rights of any security holder of the Company.
(e) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in the Final
Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good
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standing would not have a Material Adverse Effect; all of the issued
shares of capital stock or other equity interests of each subsidiary of
the Company have been duly and validly authorized and issued, are fully
paid and non-assessable, and, except for any encumbrance pursuant to
(i)(A) the Credit Agreement between the Company and SouthTrust Bank, dated
June 27, 2001 (as subsequently amended) as of the date hereof with respect
to Movie Gallery or (B) the Credit Agreement between Hollywood and other
parties named therein dated January 16, 2003 (as subsequently amended)
with respect to Hollywood and (iii) the Credit Agreement to be entered
into as of the Closing Date between the Company, Wachovia Bank, N.A., and
the other parties to be named therein (collectively, the "Senior Financing
Documents"), are owned directly or through wholly-owned subsidiaries by
the Company, free and clear of all liens, encumbrances, equities or
claims.
(f) No subsidiary of the Company is prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as provided by applicable laws
or regulations, the Senior Financing Documents, the Indenture or as
disclosed in the Final Memorandum.
(g) Ernst & Young LLP, who has certified the financial statements
included in the Final Memorandum with respect to the Company and delivered
its report with respect to such audited financial statements in the Final
Memorandum, is, to the knowledge of the Company, an independent registered
public accounting firm with respect to the Company within the meaning of
the Securities Act and the applicable rules and regulations thereunder.
PricewaterhouseCoopers LLP, who has certified the financial statements
included in the Final Memorandum with respect to Hollywood and delivered
its report with respect to such audited financial statements in the Final
Memorandum, is, to the knowledge of the Company, an independent registered
public accounting firm with respect to Hollywood within the meaning of the
Securities Act and the applicable rules and regulations thereunder.
(h) The financial statements (including the notes thereto) of the
Company and its consolidated subsidiaries and Hollywood and its
consolidated subsidiaries in the Final Memorandum fairly present the
financial position, results of operations, cash flows and changes in
stockholders' equity of the Company and its consolidated subsidiaries and
Hollywood and its consolidated subsidiaries, as applicable, as of the
dates and for the periods specified therein; such financial statements
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise expressly disclosed in the notes thereto) and comply as to form
with the applicable accounting requirements of Regulation S-X under the
Securities Act; the information set forth under the captions "Offering
Memorandum Summary - Summary Consolidated Financial Data and Other Data -
Movie Gallery", "Summary Consolidated Financial Data and Other Data -
Hollywood," "Selected Consolidated Financial Data - Movie Gallery" and
"Selected Consolidated Financial Data - Hollywood" in the Final Memorandum
has been fairly extracted from the financial statements of the Company and
its consolidated subsidiaries and Hollywood and its consolidated
subsidiaries, as applicable, fairly presents the information included
therein and has been compiled on a basis consistent with that of the
audited financial statements included in the Final Memorandum. The pro
forma financial information in the Final
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Memorandum complies as to form with the applicable accounting requirements
of Article 11 of Regulation S-X.
(i) Subsequent to the respective dates as of which information is given
in the Final Memorandum, (i) none of the Company and its subsidiaries and
none of Hollywood and its subsidiaries have incurred any material
liability or obligation, direct or contingent, or entered into any
material transaction in each case not in the ordinary course of business;
(ii) the Company has not purchased any of its outstanding capital stock,
and, except for regular quarterly dividends on the common stock, par value
$.001 per share of the Company in amounts per share that are consistent
with past practice, has not declared, paid or otherwise made any dividend
or distribution of any kind on any class of its capital stock; and (iii)
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and its subsidiaries or Hollywood
and its subsidiaries, except as disclosed in the Final Memorandum.
(j) The Company and each of its subsidiaries and Hollywood and each of
its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(k) The Company and Hollywood are subject to and in full compliance with
the reporting requirements of Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), except
for failures to file current reports on Form 8-K by Hollywood. The reports
on SEC Form 10-K filed most recently by the Company and Hollywood, at the
time they were filed with the Commission complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of
the Commission promulgated thereunder and, when read together with the
other information in the Final Memorandum, at the date of the Final
Memorandum and as of the Closing Date, do not and will not include 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,
in the light of the circumstances under which they were made, not
misleading.
(l) This Agreement has been duly authorized, executed and delivered by
the Company and each Guarantor.
(m) The Indenture and the Registration Rights Agreement have been duly
authorized by the Company and each Guarantor and, on the Closing Date,
will have been duly executed and delivered by the Company and each
Guarantor, and will constitute the legal, valid and binding obligations of
the Company and each Guarantor, enforceable against the Company and each
Guarantor in accordance with their respective terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement
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thereof is subject to general principles of equity; and the
Indenture and the Registration Rights Agreement will conform to the
description thereof in the Final Memorandum and will be
substantially in the form previously delivered to you.
(n) The Indenture will conform to the requirements of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and to the
rules and regulations of the Securities and Exchange Commission (the
"Commission") applicable to an indenture that is qualified thereunder.
(o) The Notes have been duly authorized and, on the Closing Date, when
executed and authenticated in the manner provided for in the Indenture and
delivered to and paid for by the Initial Purchasers as provided in this
Agreement, will constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity, and will be entitled
to the benefits of the Indenture and the Registration Rights Agreement;
the Guarantees have been duly authorized and, on the Closing Date, upon
the due issuance and delivery of the related Notes and the due endorsement
of the Guarantees thereon, will have been duly executed, endorsed and
delivered and will constitute valid and legally binding obligations of
each of the Guarantors, except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity, and will
be entitled to the benefits of the Indenture; the Exchange Notes (as
defined in the Registration Rights Agreement) have been duly authorized
and, when executed and authenticated in the manner provided for in the
Registration Rights Agreement and the Indenture, will constitute the
legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity, and will be entitled to the benefits of the
Indenture and the Registration Rights Agreement; and the Notes and the
Exchange Notes will conform to the descriptions thereof in the Final
Memorandum.
(p) The execution, delivery and performance by the Company and each
Guarantor of this Agreement and the other Transaction Documents, the
issuance and sale of the Notes and the compliance by the Company and each
Guarantor with all of the provisions of the Notes, the Indenture, the
Registration Rights Agreement and this Agreement and the consummation of
the transactions contemplated hereby and thereby will not (i) conflict
with, result in a breach or violation of, or constitute a default under,
any indenture, mortgage, deed of trust or loan agreement, stockholders'
agreement or any other agreement or instrument to which the Company or any
of its subsidiaries or any other Guarantor is a party or by which the
Company or any of its subsidiaries or any other Guarantor is bound or any
of their respective properties are subject, except for such conflicts,
breaches, violations or defaults that could not have a Material Adverse
Effect, or (ii) with the certificate of incorporation or bylaws of the
Company or any of its subsidiaries or any other Guarantor, or any statute,
rule or regulation or any judgment, order or decree of any governmental
authority or court or any arbitrator
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applicable to the Company or any of its subsidiaries or any other
Guarantor, or (iii) require the consent, approval, authorization, order,
registration or filing or qualification with, any governmental authority
or court, or body or arbitrator having jurisdiction over the Company or
any of its subsidiaries or any other Guarantor, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer or sale of the Notes and by Federal and state
securities laws with respect to the obligations of the Company and the
Guarantors under the Registration Rights Agreement.
(q) No legal or governmental proceedings or investigations are pending
or threatened to which the Company or any of its subsidiaries or Hollywood
or any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries or Hollywood or any of its
subsidiaries is subject, other than proceedings accurately described in
the Preliminary Memorandum and the Final Memorandum and such proceedings
or investigations that could not, singly or in the aggregate, result in a
Material Adverse Effect.
(r) Except as disclosed in reports filed under the Exchange Act by Movie
Gallery or Hollywood, there are no material relationships, direct or
indirect, between or among the Company or Hollywood or any of their
subsidiaries, on the one hand, and the respective directors, officers,
stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, that would be required by the Securities
Act to be disclosed in a prospectus were the Notes being issued and sold
in a public offering registered on Form S-1 under the Securities Act that
are not so disclosed in the Preliminary Memorandum and Final Memorandum;
and there are no contracts or other documents (other than employment
agreements) that would be required by the Securities Act to be disclosed
in a prospectus were the Notes being issued and sold in a public offering
registered on Form S-1 under the Securities Act that are not so disclosed
in the Preliminary Memorandum and Final Memorandum.
(s) Each of the Company and each Guarantor is not now nor after giving
effect to the issuance of the Notes and the execution, delivery and
performance of the Transaction Documents and the consummation of the
transactions contemplated thereby or described in the Preliminary
Memorandum or the Final Memorandum, will be (i) insolvent, (ii) left with
unreasonably small capital with which to engage in its anticipated
business or (iii) incurring debts or other obligations beyond its ability
to pay such debts or obligations as they become due.
(t) The Company and its Affiliates (as defined in Rule 501(b) of
Regulation D under the Securities Act ("Regulation D")) have not
distributed and, prior to the later of (i) the Closing Date and (ii) the
completion of the distribution of the Notes, will not distribute any
offering material in connection with the offering and sale of the Notes
other than the Preliminary Memorandum, the Final Memorandum or any
amendment or supplement thereto.
(u) The Company and its subsidiaries and Hollywood and its subsidiaries
have not sustained, since the date of the latest respective audited
financial statements included in the Final Memorandum (exclusive of any
amendment or supplement thereto), any material loss or interference with
its business or properties from fire, explosion, flood, accident or other
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calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree (whether domestic or
foreign) otherwise than as set forth in the Final Memorandum (exclusive of
any amendment or supplement thereto); and, since such date, there has not
occurred any change or development having a Material Adverse Effect on the
Company or Hollywood or any of their subsidiaries.
(v) The Company and its subsidiaries and Hollywood and its subsidiaries
have good and marketable title in fee simple to all items of real property
and good and marketable title to all personal property owned by each of
them except as set forth in the Final Memorandum, free and clear of any
pledge, lien, encumbrance, security interest or other defect or claim of
any third party, except for any encumbrance pursuant to the Senior
Financing Documents and for such defects in title that could not,
individually or in the aggregate, have a Material Adverse Effect. Any
property leased by the Company and its subsidiaries is held under valid,
subsisting and enforceable leases, and there is no default under any such
lease or any other event that with notice or lapse of time or both would
constitute a default thereunder, except for defaults that could not,
individually or in the aggregate, have a Material Adverse Effect.
(w) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(c) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred, exists or is
reasonably expected to occur with respect to any employee benefit plan (as
defined in Section 3(3) of ERISA) which the Company or any of its
subsidiaries maintains, contributes to or has any obligation to contribute
to, or with respect to which the Company or any of its subsidiaries or any
other Guarantor has any material liability, direct or indirect, contingent
or otherwise (a "Plan"); each Plan is in compliance in all material
respects with applicable law, including ERISA and the Code; none of the
Company or any of its subsidiaries has incurred or expects to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any Plan; and each Plan that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or failure to act, which could
reasonably be expected to cause the loss of such qualification.
(x) Except as disclosed in each Memorandum, no labor dispute with the
employees of the Company or any of its subsidiaries or Hollywood or any of
its subsidiaries exists, is imminent or is threatened, and the senior
officers of the Company and its subsidiaries are not aware of any
existing, imminent or threatened labor disturbance by the employees of any
of their respective principal suppliers, manufacturers, customers or
contractors, which, in either case, could reasonably be expected to result
in a Material Adverse Effect.
(y) No proceedings for the merger, consolidation, liquidation or
dissolution of the Company or any Guarantor and or the sale of all or a
material part of the assets of the Company and its subsidiaries or any
material acquisition by the Company or any Guarantor are pending or
contemplated, except as set forth in the Final Memorandum.
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(z) The Company and each of its subsidiaries and Hollywood and each of
its subsidiaries owns or otherwise possesses adequate rights to use all
material patents, trademarks, service marks, trade names and copyrights,
all applications and registrations for each of the foregoing, and all
other material proprietary rights and confidential information necessary
to conduct their respective businesses as currently conducted; none of the
Company or any of its subsidiaries nor Hollywood and its subsidiaries has
received any notice, or is otherwise aware, of any infringement of or
conflict with the rights of any third party with respect to any of the
foregoing, except for failures to possess such rights and for any such
infringement or conflicts that could not, individually or in the
aggregate, have a Material Adverse Effect.
(aa) The Company and each of its subsidiaries and Hollywood and each of
its subsidiaries is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts and with
such deductibles as are prudent in the business in which it is engaged;
and none of the Company or any of its subsidiaries or Hollywood and its
subsidiaries has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue their respective businesses at a cost that would not have a
Material Adverse Effect.
(bb) The Company and each of its subsidiaries and Hollywood and its
subsidiaries are in compliance with all laws, ordinances, regulations and
orders applicable to the Company and its subsidiaries or to Hollywood and
its subsidiaries, as the case may be, and their respective businesses, and
none of the Company or any of its subsidiaries nor Hollywood and any of
its subsidiaries has received any notice to the contrary; and each of the
Company and its subsidiaries and Hollywood and its subsidiaries possesses
all certificates, authorizations, permits, licenses, approvals, orders and
franchises (collectively, "Licenses") necessary to conduct their
respective businesses in the manner and to the full extent now operated or
proposed to be operated as described in the Final Memorandum, and are in
compliance with the Licenses, in each case issued by the appropriate
federal, state, local or foreign governmental or regulatory authorities
(collectively, the "Agencies"), and each other federal, state and local
agency, the regulations of which are applicable to the businesses or
products of the Company and its subsidiaries or Hollywood and its
subsidiaries, except where the failure to so comply with such laws,
ordinances, regulations or orders or to possess such Licenses could not
have a Material Adverse Effect. The Licenses are in full force and effect
and no proceeding has been instituted or, to the Company's or Hollywood's
knowledge, is threatened or contemplated which in any manner affects or
calls into question the validity or effectiveness thereof, except for such
failures to be in effect and such proceedings as could not have a Material
Adverse Effect. The Licenses contain no restrictions, except for
restrictions applicable to the home video, video game and tanning salon
industries generally, that are materially burdensome to the Company or
Hollywood.
(cc) There is and has been no failure on the part of the Company or
Hollywood or any of their respective directors or officers, in their
capacities as such, to comply with any provision of the Sarbanes Oxley Act
of 2002 and the rules and regulations promulgated in connection therewith
(the "Sarbanes Oxley Act"), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
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(dd) (i) The Company and each of its subsidiaries and Hollywood and each
of its subsidiaries is and has been in compliance with all applicable
laws, statutes, ordinances, rules, regulations, orders, judgments,
decisions, decrees, standards, and requirements relating to: human health
and safety; pollution; management, disposal or release of any chemical
substance, product or waste; and protection, cleanup, remediation or
corrective action relating to the environment or natural resources
("Environmental Law");
(ii) The Company and each of its subsidiaries and Hollywood and each
of its subsidiaries has obtained and is in compliance with the conditions
of all permits, authorizations, licenses, approvals and variances
necessary under any Environmental Law for the continued conduct in the
manner now conducted of their respective businesses ("Environmental
Permits");
(iii) To the knowledge of the Company, there are no past or present
conditions or circumstances, including but not limited to pending changes
in any Environmental Law or Environmental Permits, that are likely to
interfere with the conduct of the business of the Company and its
subsidiaries or Hollywood and each of its subsidiaries in the manner now
conducted or which would interfere with compliance with any Environmental
Law or Environmental Permits; and
(iv) To the knowledge of the Company, there are no past or present
conditions or circumstances at, or arising out of, their respective
businesses, assets and properties of the Company and each of its
subsidiaries or Hollywood and each of its subsidiaries or any business,
assets or properties formerly leased, operated or owned by the Company or
any of its subsidiaries, including but not limited to on-site or off-site
disposal or release of any chemical substance, product or waste, which may
give rise to: (i) liabilities or obligations for any cleanup, remediation
or corrective action under any Environmental Law; (ii) claims arising
under any Environmental Law for personal injury, property damage, or
damage to natural resources; (iii) liabilities or obligations incurred by
the Company or its subsidiaries to comply with any Environmental Law; or
(iv) fines or penalties arising under any Environmental Law;
except in each case for any noncompliance or conditions or circumstances that,
singly or in the aggregate, could not result in a Material Adverse Effect.
(ee) Neither the Company nor any Guarantor nor any subsidiary of the
Company or any Guarantor is in violation of its certificate of
incorporation, bylaws or other organizational document, and no default or
breach exists, and no event has occurred that, with notice or lapse of
time or both, would constitute a default in the due performance and
observation of any term, covenant or condition of any indenture, mortgage,
deed of trust, lease, loan agreement, stockholders' agreement or any other
agreement or instrument to which the Company or any Guarantor or any
subsidiary of the Company or any Guarantor is a party or by which the
Company or any Guarantor or any of subsidiary of the Company or any
Guarantor is bound or to which any of their respective properties are
subject, except for such breaches, defaults or events, that could not,
individually or in the aggregate, have a Material Adverse Effect.
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(ff) The Company and each of its subsidiaries and the Guarantor and each
of their subsidiaries has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
and has paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the foregoing
is due and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith and for which adequate reserves
are retained, and except for such filings and payments, the failure of
which to have been made, could not, individually or in the aggregate, have
a Material Adverse Effect.
(gg) Except as disclosed in the Final Memorandum, there are no
contracts, agreements or understandings between the Company or any of its
subsidiaries and any person granting such person the right to require the
Company or any of its subsidiaries to file a registration statement under
the Securities Act or to require the Company to include any securities
held by any person in any registration statement filed by the Company
under the Securities Act.
(hh) Neither the Company nor any Guarantor is, nor after giving effect
to the offering and sale of the Notes and the application of the proceeds
thereof as described in the Final Memorandum will be, an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(ii) Neither the Company nor any of its subsidiaries nor any of their
respective Affiliates, nor any person acting on behalf of the Company or
any of its subsidiaries has, directly or indirectly, sold, offered for
sale, solicited any offer to buy or otherwise negotiated in respect of, or
will sell, offer for sale, solicit any offer to buy or otherwise negotiate
in respect of, or distributed any offering memoranda or similar materials
with respect to, any security which offer or sale would be integrated with
the sale of the Notes and the Guarantees in a manner that would require
the offer or sale of the Notes and the Guarantees to be registered under
the 1933 Act (it being understood that no representation or warranty is
made by the Company and the Guarantors as to the Initial Purchasers and
their agents). Within the last six months, neither the Company nor anyone
acting on its behalf has distributed to investors or potential investors
any offering materials relating to an offering of securities, other than
the Preliminary Memorandum.
(jj) None of the Company or any of its Affiliates has, directly or
through any person acting on its or their behalf (other than the Initial
Purchasers, as to which no statement is made), offered, solicited offers
to buy or sold the Notes by any form of general solicitation or general
advertising (within the meaning of Regulation D) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(kk) None of the Company, any of its Affiliates, nor any person acting
on its or their behalf (other than the Initial Purchasers, as to which no
statement is made), has engaged in any directed selling efforts with
respect to the Notes, and each of them has complied with the offering
restrictions requirement of Regulation S under the Securities Act
("Regulation S"). Terms used in this paragraph have the meanings given to
them by Regulation S.
-10-
(ll) None of the Company or any of its Affiliates has taken, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Notes; nor has the Company or any
of its Affiliates paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of the Company (except as
contemplated by this Agreement).
(mm) The Notes satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(nn) Assuming the accuracy of the representations and warranties of the
Initial Purchasers in Section 3 hereof and compliance by the Initial
Purchasers with the procedures set forth in Section 3 hereof, it is not
necessary in connection with the offer, sale and delivery of the Notes to
the Initial Purchasers in the manner contemplated by this Agreement and
disclosed in the Preliminary Memorandum and the Final Memorandum to
register the Notes or the related Guarantees under the Securities Act or
to qualify the Indenture under the Trust Indenture Act.
(oo) None of the Transactions (including, without limitation, the use of
proceeds from the sale of the Notes) will violate or result in a violation
of Section 7 of the Exchange Act or any regulation promulgated thereunder,
including, without limitation, Regulations T, U and X of the Board of
Governors of the Federal Reserve System.
(pp) There are, and during the last 12 months there have been, no
material disputes between the Company and its subsidiaries or Hollywood
and its subsidiaries and any of their respective ten largest suppliers (as
measured by dollar volume of goods purchased by the Company and its
subsidiaries or Hollywood and its subsidiaries, as applicable) ("Material
Suppliers"). The Company's and Hollywood's relations with their Material
Suppliers are, to the knowledge of the Company and Hollywood, good, and
the Company and Hollywood have received no notice, and are not otherwise
aware, of any anticipated dispute with any of their respective Material
Suppliers, or that any Material Supplier intends to cease or reduce its
supply to the Company or Hollywood, as applicable.
(qq) The relationship of the Company or Hollywood and each of their
subsidiaries with each movie studio with which it has a revenue sharing
contract or movie distribution arrangement, to the knowledge of the
Company, is good, and the Company and Hollywood have received no notice,
and are not otherwise aware, of any anticipated dispute with any of such
respective movie studios, or that any such movie studios intend to cease
or reduce their revenue sharing arrangements or movie distribution
arrangements with the Company or Hollywood, or any of their respective
subsidiaries, as applicable.
(rr) Except as disclosed in the Final Memorandum, and except for fee
arrangements between (i) the Company and Wachovia Bank, National
Association; Wachovia Capital Investments, Inc.; Wachovia Capital Markets,
LLC; Xxxxxxx Xxxxx Capital Corporation; and Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated and (ii) Hollywood and UBS Securities and Lazard
Freres & Co., LLC, there are no agreements, arrangements or understandings
that will require the payment of any commissions, fees or other
remuneration to any investment
-11-
banker, broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement.
(ss) The Company does not intend to treat any of the transactions
contemplated by the Transaction Documents as being a "reportable
transaction" (within the meaning of Treasury Regulation Section 1.6011-4).
In the event the Company determines to take any action inconsistent with
such intention, it will promptly notify the Representatives thereof. If
the Company so notifies the Representatives, the Company acknowledges that
one or more of the Initial Purchasers may not treat its purchase and
resale of Notes as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and such Initial Purchaser or Initial
Purchasers, as applicable, will maintain the lists and other records
required by such Treasury Regulation.
(tt) The Company has been advised by the National Association of
Securities Dealers, Inc.'s (the "NASD") PORTAL Market that the Notes have
been designated PORTAL-eligible securities in accordance with the rules
and regulations of the NASD.
(uu) There are no stamp or other issuance or transfer taxes or duties or
other similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the
Company of the Notes.
Each certificate signed by any officer of the Company or the Guarantors and
delivered to the Initial Purchasers or their counsel shall be deemed to be a
representation and warranty by the Company or the Guarantors, as the case may
be, to the Initial Purchasers as to the matters covered thereby. Upon the
delivery of and payment for the Notes as set forth in Section 2, the Hollywood
Guarantors will be deemed to have made all of the representations and warranties
set forth in Section 1.
2. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell $325,000,000 aggregate principal amount of Notes, and each of the
Initial Purchasers, severally and not jointly, agree to purchase from the
Company the principal amount of Notes set forth opposite the name of such
Initial Purchaser in Schedule I hereto having the terms described in the Final
Offering Memorandum at a purchase price equal to 95.965% of the principal amount
thereof (the "Purchase Price"), plus any additional principal amount of Notes
that such Initial Purchaser may become obligated to purchase pursuant to the
provision of Section 10 hereof. One or more certificates in definitive form or
global form, as instructed by the Representatives for the Notes that the Initial
Purchasers have severally agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Representatives
request upon notice to the Company not later than one full business day prior to
the Closing Date (as defined below), shall be delivered by or on behalf of the
Company to the Representatives for the respective accounts of the Initial
Purchasers, with any transfer taxes payable in connection with the transfer of
the Notes to the Initial Purchasers duly paid, against payment by or on behalf
of the Initial Purchasers of the Purchase Price therefor by wire transfer in
Federal or other funds immediately available to the account of the Company. Such
delivery of and payment for the Notes shall be made at the offices of Mayer,
Brown, Xxxx & Maw LLP ("Counsel for the Initial Purchasers"), 0000
-00-
Xxxxxxxx, Xxx Xxxx, XX 00000 at 10:00 A.M., New York City time, on April 27,
2005, or at such other place, time or date as the Representatives and the
Company may agree upon, such time and date of delivery against payment being
herein referred to as the "Closing Date". The Company will make such certificate
or certificates for the Notes available for examination by the Initial
Purchasers at the New York, New York offices of Counsel for the Initial
Purchasers not later than 10:00 A.M., New York City time on the business day
prior to the Closing Date.
3. Offering of the Notes and the Initial Purchasers' Representations and
Warranties. Each of the Initial Purchasers, severally and not jointly,
represents and warrants to and agrees with the Company that:
(a) It is a qualified institutional buyer as defined in Rule 144A under
the Securities Act (a "QIB").
(b) It will solicit offers for such Notes only from, and will offer such
Notes only to, persons that it reasonably believes to be (A) in the case
of offers inside the United States, QIBs (B) in the case of offers outside
the United States, to persons other than U.S. persons ("foreign
purchasers", which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for
foreign beneficial owners (other than an estate or trust)) in reliance
upon Regulation S under the Securities Act that, in each case, in
purchasing such Notes are deemed to have represented and agreed as
provided in the Final Memorandum under the caption "Notice to Investors".
(c) It will not offer or sell the Notes using any form of general
solicitation or general advertising (within the meaning of Regulation D)
or in any manner involving a public offering within the meaning of Section
4(2) under the Securities Act.
(d) With respect to offers and sales outside the United States:
(i) at or prior to the confirmation of any sale of any Notes sold in
reliance on Regulation S, it will have sent to each distributor, dealer or
other person receiving a selling concession, fee or other remuneration
that purchases Notes from it during the distribution compliance period (as
defined in Regulation S) a confirmation or notice substantially to the
following effect:
"The Notes covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons, (i) as part of their
distribution at any time; or (ii) otherwise until 40 days after the
later of the commencement of the offering of the Notes and April 27,
2005, except in either case in accordance with Regulation S or Rule
144A under the Securities Act. Terms used above have the meanings
given to them by Regulation S."; and
(ii) such Initial Purchaser has offered the Notes and will offer and
sell the Notes (A) as part of its distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with
-13-
Rule 903 of Regulation S or as otherwise permitted in Section 3(b);
accordingly, such Initial Purchaser has not engaged nor will engage in any
directed selling efforts (within the meaning of Regulation S) with respect
to the Notes, and such Initial Purchasers has complied and will comply
with the offering restrictions requirements of Regulation S.
Terms used in this Section 3(d) have the meanings given to them by
Regulation S.
4. Covenants of the Company. The Company covenants and agrees with the
Initial Purchasers that:
(a) The Company will prepare the Final Memorandum in the form approved
by the Representatives and will not amend or supplement the Final
Memorandum without first furnishing to the Representatives a copy of such
proposed amendment or supplement or filing and will not use or file any
amendment or supplement to which the Representatives may reasonably
object.
(b) The Company will furnish to the Initial Purchasers and to Counsel
for the Initial Purchasers prior to 5:00 p.m. New York City time on the
business day after the date of this Agreement and during the period
referred to in paragraph (c) below, without charge, as many copies of the
Final Memorandum and any amendments and supplements thereto as they
reasonably may request.
(c) At any time prior to the completion of the distribution of the Notes
by the Initial Purchasers, if any event occurs or condition exists as a
result of which the Final Memorandum, as then amended or supplemented,
would include any 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, or if it should
be necessary to amend or supplement the Final Memorandum to comply with
applicable law, the Company will promptly (i) notify the Initial
Purchasers of the same; (ii) subject to the requirements of paragraph (a)
of this Section 4, prepare and provide to the Initial Purchasers, at its
own expense, an amendment or supplement to the Final Memorandum so that
the statements in the Final Memorandum as so amended or supplemented will
not include any 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 or so that the
Final Memorandum, as amended or supplemented, will comply with applicable
law; and (iii) supply any supplemented or amended Final Memorandum to the
Initial Purchasers and Counsel for the Initial Purchasers, without charge,
in such quantities as may be reasonably requested.
(d) The Company will (i) qualify the Notes and the Guarantees for sale
by the Initial Purchasers under the laws of such jurisdictions as the
Representatives may designate and (ii) maintain such qualifications for so
long as required for the sale of the Notes by the Initial Purchasers. The
Company will promptly advise the Initial Purchasers of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose.
-14-
(e) At any time prior to the completion of the distribution of the Notes
by the Initial Purchasers, the Company will deliver to the Initial
Purchasers such additional information concerning the business and
financial condition of the Company or Hollywood as the Initial Purchasers
may from time to time request and whenever the Company or Hollywood or any
of their subsidiaries publishes or makes available to the public (by
filing with any regulatory authority or securities exchange or by
publishing a press release or otherwise) any information that would
reasonably be expected to be material in the context of the issuance of
the Notes under this Agreement, shall promptly notify the Initial
Purchasers as to the nature of such information or event. The Company will
likewise notify the Initial Purchasers of (i) any decrease in the rating
of the Notes or any other debt securities of the Company by any nationally
recognized statistical rating organization (as defined in Rule 436(g)(2)
under the Securities Act) or (ii) any notice or public announcement given
of any intended or potential decrease in any such rating or that any such
securities rating agency has under surveillance or review, with possible
negative implications, its rating of the Notes, as soon as the Company
becomes aware of any such decrease, notice or public announcement.
(f) The Company will not, and will not permit any of its Affiliates to,
resell any of the Notes that have been acquired by any of them, other than
pursuant to an effective registration statement under the Securities Act
or in accordance with Rule 144 under the Securities Act.
(g) Except as contemplated in the Registration Rights Agreement, none of
the Company or any of its Affiliates, nor any person acting on its or
their behalf (other than the Initial Purchasers or any of their respective
Affiliates, as to which no statement is made) will, directly or
indirectly, make offers or sales of any security, or solicit offers to buy
any security, under circumstances that would require the registration of
the Notes under the Securities Act.
(h) None of the Company or any of its Affiliates, nor any person acting
on its or their behalf (other than the Initial Purchasers or any of their
respective Affiliates, as to which no statement is made), will solicit any
offer to buy or offer to sell the Notes by means of any form of general
solicitation or general advertising (within the meaning of Regulation D)
or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.
(i) None of the Company or any of its Affiliates, nor any person acting
on its or their behalf (other than the Initial Purchasers or any of their
respective Affiliates, as to which no statement is made), will engage in
any directed selling efforts (within the meaning of Regulation S) with
respect to the Notes, and each of them will comply with the offering
restrictions requirements of Regulation S.
(j) None of the Company or any of its Affiliates, nor any person acting
on its or their behalf (other than the Initial Purchasers or any of their
respective Affiliates, as to which no statement is made), will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
securities of the same or a similar class as the Notes, other than the
Notes offered or sold to the Initial Purchasers hereunder, in a manner
which would require the registration under the Securities Act of the
Notes.
-15-
(k) So long as any of the Notes are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, at any time that the
Company is not then subject to Section 13 or 15(d) of the Exchange Act,
the Company will provide at its expense to each holder of the Notes and to
each prospective purchaser (as designated by such holder) of the Notes,
upon the request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Securities Act. (This
covenant is intended to be for the benefit of the holders, and the
prospective purchasers designated by such holders from time to time, of
the Notes.)
(l) The Company will apply the net proceeds from the sale of the Notes
as set forth under "Use of Proceeds" in the Final Memorandum.
(m) Until completion of the distribution, neither the Company nor any of
its Affiliates will take, directly or indirectly, any action designed to
cause or result in, or which has constituted or which might reasonably be
expected to cause or result in, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Notes.
(n) For so long as any Notes are outstanding, the Company and its
subsidiaries will conduct its operations in a manner that will not subject
the Company or any subsidiary to registration as an investment company
under the Investment Company Act.
(o) Each Note will bear a legend substantially as set forth in the Final
Memorandum under the caption "Notice to Investors" until such legend
shall no longer be necessary or advisable because the Notes are no
longer subject to the restrictions on transfer described therein.
(p) Except as contemplated by the Registration Rights Agreement, the
Company will not, directly or indirectly, offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company or
warrants to purchase debt securities of the Company substantially
similar to the Notes (other than the Notes offered pursuant to this
Agreement) for a period of 90 days after the date hereof, without
the prior written consent of Wachovia Capital Markets, LLC.
(q) The Company will, promptly after it has notified the Representatives
of any intention by the Company to treat the Transactions as being a
"reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4), deliver a duly completed copy of IRS Form 8886 or
any successor form to the Representatives.
5. Expenses. (a) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company and the
Guarantors (subject to the last sentence of Section 8 and the proviso in Section
9(b) of this Agreement) will pay or cause to be paid all expenses incident to
the performance of its obligations under this Agreement, including: (i) the
fees, disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the issuance and sale of the Notes and all other
fees or expenses in connection with the preparation of each Memorandum and all
amendments and supplements thereto, including all printing costs associated
therewith, and the delivery of copies
-16-
thereof to the Initial Purchasers, (ii) all costs and expenses related to the
transfer and delivery of the Notes to the Initial Purchasers, including any
transfer or other taxes payable thereon, (iii) the cost of producing any Blue
Sky or legal investment memorandum in connection with the offer and sale of the
Notes under state securities laws and all expenses in connection with the
qualification of the Notes for offer and sale under state securities laws as
provided in Section 4(d) hereof, including filing fees and the reasonable fees
and disbursements of Counsel for the Initial Purchasers in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of the
Notes, (v) all document production charges and expenses of counsel to the
Initial Purchasers (but not including their fees for professional services) in
connection with the preparation of this Agreement, (vi) the fees and expenses,
if any, incurred in connection with the admission of the Notes for trading in
PORTAL or any appropriate market system, (vii) the costs and charges of the
Trustee and any transfer agent, registrar or depositary, (viii) the cost of the
preparation, issuance and delivery of the Notes, (ix) all costs and expenses
relating to investor presentations, including any "road show" presentations
undertaken in connection with the marketing of the offering of the Notes,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations, travel and lodging expenses of the
officers of the Company and any such consultants, and one-half of the cost of
any aircraft chartered in connection with the road show, and (x) all other costs
and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.
(b) If the sale of the Notes provided for herein is not consummated
because any condition to the obligations of the Initial Purchasers set
forth in Section 6 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 9 hereof or because of any failure, refusal
or inability on the part of the Company to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder
other than by reason of a default by any of the Initial Purchasers, the
Company will reimburse the Initial Purchasers upon demand for all
reasonable documented out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with
the proposed purchase and sale of the Notes; provided, however, that the
obligations of the Company under this Section 5(b) shall be in addition
to, and not in place of, the provisions for expense reimbursement set
forth in the Amended and Restated Fee Letter, dated January 9, 2005, among
and between Wachovia Bank, National Association; Wachovia Capital
Investments, Inc.; Wachovia Capital Markets, LLC; Xxxxxxx Xxxxx Capital
Corporation; and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
6. Conditions to the Initial Purchaser's Obligations. The obligations of
the several Initial Purchasers to purchase and pay for the Notes shall be
subject to the accuracy of the representations and warranties of the Company and
each Guarantor in Section 1 hereof, in each case as of the date hereof and as of
the Closing Date, as if made on and as of the Closing Date, to the accuracy of
the statements of the Company's officers made pursuant to the provisions hereof,
to the performance by the Company of its covenants and agreements hereunder and
to the following additional conditions:
(a) The Initial Purchasers shall have received the following opinions,
each in form and substance satisfactory to the Initial Purchasers and
dated the Closing Date:
-17-
(i) An opinion of Xxxxxx & Bird LLP ("Counsel for the Company") to
the effect set forth in Exhibit A hereto;
(ii) An opinion of Xxxx & Xxxxx, P.C. to the effect set forth in
Exhibit B hereto;
(iii) An opinion of the General Counsel of the Company to the effect
set forth in Exhibit C hereto; and
(iv) An opinion of Stoel Rives LLP, counsel for Hollywood to the
effect set forth in Exhibit D hereto.
(b) The Initial Purchasers shall have received an opinion, dated the
Closing Date, of Counsel for the Initial Purchasers, with respect to
the issuance and sale of the Notes and such other related matters as
the Initial Purchasers may reasonably require, and the Company shall
have furnished to such counsel such documents as it may reasonably
request for the purpose of enabling it to pass upon such matters. In
rendering such opinion, such counsel may rely as to certain matters
of law upon the opinions referred to in Section 6(a).
(c) The Initial Purchasers shall have received on each of the date hereof
and the Closing Date a letter, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Initial Purchasers and Counsel for the Initial Purchasers, from
Ernst & Young LLP and PricewaterhouseCoopers LLP, independent
registered public accounting firms, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements
and certain financial information contained in each Memorandum,
including, without limitation, pro forma financial information;
provided that the letter shall use a "cut-off date" within three
days of the date of such letter. References to the Final Memorandum
in this paragraph (c) with respect to either letter referred to
above shall include any amendment or supplement thereto at the date
of such letter.
(d) (i) None of the Company nor any of its subsidiaries nor Hollywood or
any of its subsidiaries, shall have sustained, since the date of
their respective latest audited financial statements included in the
Final Memorandum (exclusive of any amendment or supplement thereto),
any loss or interference with their respective businesses or
properties from fire, explosion, flood, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree (whether domestic or
foreign) otherwise than as set forth in the Final Memorandum
(exclusive of any amendment or supplement thereto); and (ii) since
the respective dates as of which information is given in the
Preliminary Memorandum or the Final Memorandum, there shall not have
been any change in the capital stock (other than issuances pursuant
to employee benefit plans) or long-term debt of the Company and its
subsidiaries or Hollywood or any of its subsidiaries except as
included in the Final Memorandum (exclusive of any amendment or
supplement thereto), or any change in or effect on or any
development having a prospective change in or effect on the
business, operations, properties, assets, liabilities, stockholders'
equity, earnings, condition (financial or otherwise), results of
operations or management of the Company and its subsidiaries or
Hollywood or any of its subsidiaries, whether or not in the ordinary
course of business,
-18-
otherwise than as set forth in each such Memorandum (exclusive of
any amendment or supplement thereto), the effect of which, in any
such case described in clause (i) or (ii), is, in the sole judgment
of the Representatives, so material and adverse as to make it
impracticable or inadvisable to market the Notes on the terms and in
the manner described in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(e) None of the information set forth in the sections of the Final
Memorandum entitled "Use of Proceeds" and "Management's Discussion
and Analysis of Financial Conditions and Results of Operations -
Movie Gallery - Related Party Transactions" shall have changed, nor
shall there have been any change in the information with respect to
the directors and officers of the Company from what is set forth in
the section of the Final Memorandum entitled "Business - Movie
Gallery - Management", if the effect of any such change,
individually or in the aggregate, in the sole judgment of the
Representatives makes it impracticable or inadvisable to proceed
with the offering or the delivery of the Notes on the terms and in
the manner described in the Final Memorandum, exclusive of any
amendment or supplement thereto.
(f) The Initial Purchasers shall have received a certificate, dated the
Closing Date and in form and substance satisfactory to the Initial
Purchasers, of the Chief Executive Officer and the Chief Financial
Officer of the Company as to the accuracy of the representations and
warranties of the Company in this Agreement at and as of the Closing
Date; that the Company has performed all covenants and agreements
and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date; and as to the matters set
forth in Sections 6(d) and (e).
(g) The Initial Purchasers shall have received a certificate, dated the
Closing Date and in form and substance satisfactory to the Initial
Purchasers, of the Chief Executive Officer and the Chief Financial
Officer of Hollywood (i) as to the accuracy of the representations
and warranties relating to Hollywood in this Agreement at and as of
the Closing Date; (ii) as to the matters set forth in Sections 6(d)
relating to Hollywood; and (iii) to the effect that the statements
about Hollywood (including the financial statements of Hollywood)
included in the Preliminary Offering Memorandum and the Final
Offering Memorandum do not contain any untrue statement of material
fact or omit to state any material fact necessary to make the
statements made therein, in light of the circumstances under which
they were made, not misleading.
(h) The Notes shall have received initial ratings of not less than B- by
Standard & Poor's and B2 by Xxxxx'x, and, subsequent to the date
hereof, there shall not have been any decrease in the rating of the
Notes by any "nationally recognized statistical rating agency", as
that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act, and no such organization shall
have publicly announced that it has under surveillance or review its
ratings of the Securities or any notice or public announcement given
of any intended or potential decrease in any such rating or that any
such securities rating agency has under surveillance or review, with
possible negative implications, its rating of the Notes.
(i) The Notes shall have been designated for trading on PORTAL.
-19-
(j) The Notes shall be eligible for clearance and settlement through the
Depository Trust Company, Clearstream Banking and the Euroclear
System.
(k) On or before the Closing Date, the Initial Purchasers and Counsel for
the Initial Purchasers shall have received such further
certificates, documents or other information as they may have
reasonably requested from the Company or Hollywood.
(l) Simultaneously with the Closing, the Company shall have consummated
that certain senior credit facility described under the caption
"Description of New Senior Credit Facility" in the Final Memorandum.
(m) Simultaneously with the Closing, the Company shall have consummated
that certain merger with Hollywood as described in the Final
Memorandum.
7. Indemnification and Contribution. (a) The Company and each Guarantor
(subject to the last sentence of Section 8 and the proviso in Section 9(b) of
this Agreement), jointly and severally, agrees to indemnify and hold harmless
each Initial Purchaser, its affiliates, directors and officers and each person,
if any, who controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) any Initial Purchaser against any losses,
claims, damages or liabilities, joint or several, to which such Initial
Purchaser or such other person may become subject, insofar as such losses,
claims, damages or liabilities (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 Preliminary Memorandum or the Final Memorandum or
any amendment or supplement thereto; or (ii) the omission or alleged omission to
state in the Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto a material fact necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading, and will
reimburse, as incurred, each Initial Purchaser and each such other person for
any legal or other expenses reasonably incurred by such Initial Purchaser or
such other person 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 the Company and the
Guarantors will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Memorandum, the Final Memorandum or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by such Initial Purchasers through the Representatives
specifically for use therein as set forth in Section 11 hereof; and provided
further, that the foregoing indemnity agreement (except for the expense
reimbursement provisions) with respect to the Preliminary Memorandum shall not
inure to the benefit of any Initial Purchaser who failed to deliver a Final
Memorandum, provided by the Company to the Initial Purchasers in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
Closing Date, to the person asserting any losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Memorandum, 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 the Final Memorandum, (ii)
such Final Memorandum
-20-
was required by law to be delivered at or prior to the written confirmation of
sale to such person and (iii) delivery of such Final Memorandum would have
precluded such person from recovering for such losses, claims, damages and
liabilities.
(b) Each Initial Purchaser, severally and not jointly, will indemnify and
hold harmless the Company and the Guarantors and their respective
affiliates, directors, officers, and each person, if any, who
controls any of the Company or the Guarantors within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which the
Company, the Guarantors, any such affiliates, directors or officers
or such controlling person may become subject, insofar as such
losses, claims, damages or liabilities (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
Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto, or (ii) the omission or alleged omission to
state in the Preliminary Memorandum or the Final Memorandum or any
amendment or supplement thereto a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, in each case to the extent,
but only 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 furnished to the Company
by the Initial Purchasers through the Representatives specifically
for use therein as set forth in Section 11 hereof and, subject to
the limitation set forth immediately preceding this clause, will
reimburse as incurred, any legal or other expenses reasonably
incurred by the Company or the Guarantors or any such affiliates,
directors or officers or such controlling person in connection with
investigating, defending against or appearing as a third-party
witness in connection with, any such loss, claim, damage, liability
or action in respect thereof.
(c) As soon as reasonably practicable, after receipt by any person to whom
indemnity may be available under this Section 7 (the "indemnified
party") of legal service 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 7 (the "indemnifying party"), notify such indemnifying party
of the commencement thereof; but the failure to so notify such
indemnifying party will not relieve such indemnifying party from any
liability which it may have to such indemnified party otherwise than
under this Section 7 and will affect its liability under this
Section 7 only 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, and in no
event will such failure affect the obligation of the indemnifying
party to reimburse the expenses of the indemnified party as set
forth in this section. 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
-21-
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 7 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 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 circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 7 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, any legal or other expenses incurred in
connection with defending or investigating any action or claim) (or
actions in respect thereof) ("Losses"), the Company and the
Guarantors (subject to the last sentence of Section 8 and the
proviso in Section 9(b) of this Agreement), on the one hand, and the
Initial Purchasers, on the other, in order to provide for just and
equitable contribution, agree to contribute to the amount paid or
payable by such indemnified party as a result of such Losses to
which the Company and the Guarantors, on the one hand, and the
Initial Purchasers, on the other, may be subject, (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company and the Guarantors, on the one hand, and the
Initial Purchasers, on the other, from the offering of the Notes or
(ii) if the allocation provided by the foregoing clause (i) is
unavailable for any
-22-
reason, not only such relative benefits but also the relative fault
of the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other, in connection with the statements or
omissions or alleged statements or omissions that resulted in such
Losses. The relative benefits received by the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the
other, shall be deemed to be in the same proportion as the total
proceeds from the offering (before deducting expenses) received by
the Company bear to the total discounts and commissions received by
the Initial Purchasers from the Company in connection with the
purchase of the Notes hereunder as set forth in the Final
Memorandum. 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, the Guarantors or the Initial Purchasers, the parties'
intent, relative knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The
Company, the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution were determined by
pro rata allocation or by any other method of allocation (even if
the Initial Purchasers were treated as one entity for such purpose)
that does not take into account the equitable considerations
referred to above. Notwithstanding any other provision of this
paragraph (d), no Initial Purchaser shall be obligated to make
contributions hereunder that in the aggregate exceed the total
underwriting discounts and commissions received by such Initial
Purchaser from the Company in connection with the purchase of the
Notes hereunder, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' respective obligations to contribute hereunder are
several in proportion to their respective obligations to purchase
Notes as set forth on Schedule I hereto and not joint. For purposes
of this paragraph (d), each person, if any, who controls an Initial
Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and each other person listed in
Section 7(a) hereof shall have the same rights to contribution as
such Initial Purchaser, and each affiliate, director or officer of
the Company or any Guarantor and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company and the Guarantors.
(e) The obligations of the Company and the Guarantors under this Section 7
shall be in addition to any obligations or liabilities which the
Company and the Guarantors may otherwise have and the obligations of
the respective Initial Purchasers under this Section 7 shall be in
addition to any obligations or liabilities which the Initial
Purchasers may otherwise have.
8. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, the Guarantors,
their respective officers, and the several Initial Purchasers set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the Guarantors, their
respective officers or directors or any controlling person referred to in
Section 7 hereof or any Initial Purchaser and (ii) delivery of and payment for
the Notes. The respective agreements, covenants, indemnities
-23-
and other statements set forth in Sections 5 and 7 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement. Notwithstanding any other provision of this Agreement, the respective
agreements, covenants, indemnities and other statements of the Hollywood
Guarantors and their respective officers set forth in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement, including but
not limited to the agreements, covenants, indemnities and other statements set
forth in Sections 5 and 7 of this Agreement, shall immediately terminate and be
of no further force or effect, and the Hollywood Guarantors and their respective
officers shall have no liability with respect to this Agreement, if the merger
between an affiliate of the Company and Hollywood, as described in the Final
Memorandum, is not completed.
9.Termination. (a) The Representatives may terminate this Agreement with
respect to the Notes by notice to the Company at any time on or prior to the
Closing Date in the event that (i) the Company shall have failed, refused or
been unable to perform in any material respect all obligations and satisfy in
any material respect all conditions on its part to be performed or satisfied
hereunder at or prior thereto or if, at or prior to the Closing Date (ii)
trading in securities generally on the New York Stock Exchange, the NASDAQ
National Market or in the over-the-counter market, or trading in any securities
of the Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum or maximum prices shall have been established on any
such exchange or market; (iii) there has been a material disruption in
commercial banking or securities settlement, payment or clearance services in
the United States; (iv) a banking moratorium shall have been declared by New
York, North Carolina or United States authorities or (v) there shall have been
(A) an outbreak or escalation of hostilities between the United States and any
foreign power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States, (C) the occurrence of any other calamity
or crisis involving the United States or (D) any change in general economic,
political or financial conditions which has an effect on the U.S. financial
markets or the international financial markets that, in the case of any event
described in this clause (v), in the sole judgment of the Representatives, makes
it impracticable or inadvisable to proceed with the offer, sale and delivery of
the Notes as disclosed in the Preliminary Memorandum or the Final Memorandum,
exclusive of any amendment or supplement thereto.
(b) Termination of this Agreement pursuant to this Section 9 shall be
without liability of any party to any other party except as provided in
Sections 5 and 7 hereof; provided, however, that the Hollywood Guarantors
shall be entirely without liability under this Agreement in the event of
such termination.
10. Defaulting Initial Purchasers. If, on the Closing Date, any Initial
Purchaser defaults in the performance of its obligations under this Agreement,
the non-defaulting Initial Purchasers shall be obligated to purchase the Notes
that such defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase on the Closing Date (the "Remaining Notes") in the respective
proportions that the principal amount of the Notes set opposite the name of each
non-defaulting Initial Purchaser in Schedule I hereto bears to the principal
amount of the Notes set opposite the names of all the non-defaulting Initial
Purchasers in Schedule I hereto; provided, however, that the non-defaulting
Initial Purchasers shall not be obligated to purchase any of the Notes on the
Closing Date if the total principal amount of Notes which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase on such date
exceeds 10% of the
-24-
total principal amount of Notes to be purchased on the Closing Date, and no
non-defaulting Initial Purchaser shall be obligated to purchase more than 110%
of the principal amount of Notes that it agreed to purchase on the Closing Date
pursuant to this Agreement. If the foregoing maximums are exceeded, the
non-defaulting Initial Purchasers, or those other purchasers satisfactory to the
Initial Purchasers who so agree, shall have the right, but not the obligation,
to purchase, in such proportion as may be agreed upon among them, all the
Remaining Notes. If the non-defaulting Initial Purchasers or other Initial
Purchasers satisfactory to the Initial Purchasers do not elect to purchase the
Remaining Notes, this Agreement shall terminate without liability on the part of
any non-defaulting Initial Purchaser or the Company, except that the Company
will continue to be liable for the payment of expenses to the extent set forth
herein.
Nothing contained in this Agreement shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company for damages caused by its
default. If other purchasers are obligated or agree to purchase the Notes of a
defaulting or withdrawing Initial Purchaser, the Company or the Representatives
may postpone the Closing Date for up to five full business days in order to
effect any changes in the Transaction Documents or in any other document or
arrangement that, in the opinion of counsel for the Company or Counsel for the
Initial Purchasers, may be necessary.
11. Information Supplied by Initial Purchasers. The statements set forth
in the fourth paragraph (except for the first sentence thereof), sixth paragraph
(except for the first sentence thereof) and the seventh paragraph under the
heading "Plan of Distribution" in the Preliminary Memorandum and the Final
Memorandum, to the extent such statements relate to the Initial Purchasers,
constitute the only information furnished by the Initial Purchasers to the
Company for the purposes of Sections 1(a) and 7 hereof.
12. Notices. All communications hereunder shall be in writing and, if sent
to any of the Initial Purchasers, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Wachovia Capital Markets,
LLC, One Wachovia Center, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000, Attention: General Counsel, with a copy to Mayer, Brown, Xxxx & Maw
LLP, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxxx and if sent to the Company, shall be delivered or sent by mail, telex
or facsimile transmission and confirmed in writing to the Company at Movie
Gallery, Inc., 000 Xxxx Xxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000, Attention: General
Counsel with a copy to Xxxxxx & Bird LLP, One Atlantic Center, 0000 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx.
13. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the several Initial Purchasers, the Company and the Guarantors and
their respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the several Initial Purchasers, the Company and the Guarantors and
their respective successors and legal representatives, and for the benefit of no
other person, except that (i) the indemnities of the Company contained in
Section 7 of this Agreement shall also be for the benefit of any person or
persons who control any Initial Purchaser within the meaning of Section
-25-
15 of the Securities Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchasers contained in Section 7 of this Agreement
shall also be for the benefit of the affiliates, directors and officers of the
Company and the Guarantors, and any person or persons who control the Company or
the Guarantors within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act. No purchaser of Notes from any Initial Purchaser shall
be deemed a successor to such Initial Purchaser because of such purchase.
14. Applicable Law. This Agreement shall be governed by the laws of the
State of New York.
15. Consent to Jurisdiction and Service of Process. (a) All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, which
jurisdiction is non-exclusive.
(b) Each party 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 12 hereof. Nothing in this Section shall affect
the right of the parties to serve process in any other manner permitted by
law.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[The remainder of this page is intentionally left blank.]
-26-
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company, the Guarantors
and the Initial Purchasers.
Very truly yours,
MOVIE GALLERY, INC.
By: /s/ Xxx Xxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxx
Title: President and Chief Executive
Officer
MOVIE GALLERY US, INC.
By: /s/ S. Page Xxxx
--------------------------------
Name: S. Page Xxxx
Title: Executive Vice President
and Secretary
MOVIE GALLERY FINANCE, INC.
By: /s/ S. Page Xxxx
--------------------------------
Name: S. Page Xxxx
Title: Vice President and
Assistant Secretary
MOVIE GALLERY LICENSING, INC.
By: /s/ S. Page Xxxx
--------------------------------
Name: S. Page Xxxx
Title: Vice President and
Assistant Secretary
-27-
MOVIE GALLERY SERVICES, INC.
By: /s/ S. Page Xxxx
-----------------
Name: S. Page Xxxx
Title: Executive Vice President
and Secretary
-28-
M.G.A. Realty I, LLC
By: /s/ S. Page Xxxx
---------------------------------
Name: S. Page Xxxx
Title: Executive Vice President
and Secretary
M.G. DIGITAL, LLC
By: /s/ S. Page Xxxx
---------------------------------
Name: S. Page Xxxx
Title: Executive Vice President
and Secretary
MOVIE GALLERY ASSET MANAGEMENT, INC.
By: /s/ S. Page Xxxx
---------------------------------
Name: S. Page Xxxx
Title: President
HOLLYWOOD ENTERTAINMENT CORPORATION
By: /s/ Xxx Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
HOLLYWOOD MANAGEMENT CORPORATION
By: /s/ Xxx Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
-29-
Accepted as of the date hereof.
WACHOVIA CAPITAL MARKETS, LLC
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX 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/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Vice President
By: XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
By: /s/ Xxxxx Xxxxxx
------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
By: CIBC WORLD MARKETS CORP.
By: /s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
-30-
[Note: Exhibits A, B, C and D to be attached]
Exh. A-1
SCHEDULE I
INITIAL PURCHASERS
Aggregate Principal
Amount of Notes to be
Initial Purchaser Purchased from the Company
------------------------------------- --------------------------
Wachovia Capital Markets, LLC $ 276,250,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated $ 32,500,000
CIBC World Markets Corp. $ 16,250,000
Total $ 325,000,000
S-1
SCHEDULE II
GUARANTORS
Movie Gallery US, Inc.
Movie Gallery Finance, Inc.
Movie Gallery Licensing, Inc.
Movie Gallery Services, Inc.
M.G.A. Realty I, LLC
M.G. Digital, LLC
Movie Gallery Asset Management, Inc.
Hollywood Entertainment Corporation
Hollywood Management Corporation
S-2
