THIRD AMENDMENT TO
FORBEARANCE AGREEMENT
This THIRD AMENDMENT TO FORBEARANCE AGREEMENT ("Third Amendment"),
dated as of August 27th, 2007, is entered into by and among MOVIE
GALLERY, INC., a Delaware corporation ("Borrower"), the Lenders party
hereto, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P. ("GSCP"), as Lender and in
its capacity as Administrative Agent for the Lenders ("Administrative
Agent") and WACHOVIA BANK, NATIONAL ASSOCIATION ("Wachovia"), as
Lender and in its capacity as Collateral Agent for the Secured Parties
("Collateral Agent").
RECITALS:
WHEREAS, the Borrower, the Guarantors party thereto, the Lenders party
thereto, the Administrative Agent, GSCP as Syndication Agent, the
Collateral Agent, and Wachovia as Documentation Agent have entered
into that certain First Lien Credit and Guaranty Agreement, dated as
of March 8, 2007 (as has been amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement");
WHEREAS, the Borrower, the Guarantors, the Administrative Agent, the
Collateral Agent and the Requisite Lenders have entered into that
certain Forbearance Agreement, dated as of July 20, 2007 (the
"Forbearance Agreement");
WHEREAS, the Borrower, the Guarantors, the Administrative Agent, the
Collateral Agent and the Requisite Lenders have entered into that
certain First Amendment to Forbearance Agreement, dated as of July 27,
2007 (the "First Amendment"), and that certain Second Amendment to
Forbearance Agreement dated as of August 14, 2007 (the "Second
Amendment") (the Forbearance Agreement together with and as amended by
the First Amendment and the Second Amendment, the "Amended Forbearance
Agreement");
WHEREAS, pursuant to Section 5(d) of the Forbearance Agreement,
Borrower and the Guarantors have requested that the Administrative
Agent and the Requisite Lenders further amend the Amended Forbearance
Agreement to extend the Forbearance Period until September 30, 2007;
and
WHEREAS, Administrative Agent and the Requisite Lenders are willing to
extend the Forbearance Period upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Amended Forbearance Agreement, the Credit Agreement, the other
Credit Documents and herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Definitions.
Unless otherwise defined above or elsewhere in this Third Amendment,
capitalized terms used herein shall have the meanings ascribed to them
in the Amended Forbearance Agreement or the Credit Agreement, as
applicable.
SECTION 2. Amendments to Credit Agreement and Amended Forbearance
Agreement.
Subject to the receipt of the signatures from the Administrative
Agent, Collateral Agent, Requisite Lenders, Borrower and the
Guarantors, the Credit Agreement and the Amended Forbearance
Agreement, as applicable, is hereby amended as of the Effective Date
as follows:
(a) Section 2.9(a)(i) of the Credit Agreement (as previously
amended pursuant to Section 3(b) of the Forbearance Agreement) is
hereby amended by replacing the phrase "plus 1.0% per annum" at the
end of each of subclauses (1) and (2) thereof with the phrase "plus
1.25% per annum".
(b) Section 2.9(a)(ii) of the Credit Agreement (as previously
amended pursuant to Section 3(c) of the Forbearance Agreement) is
hereby amended by replacing the phrase "plus 1.0% per annum" at the
end thereof with the phrase "plus 1.25% per annum".
(c) Section 2.9(a)(iii) of the Credit Agreement (as
previously amended pursuant to Section 3(d) of the Forbearance
Agreement) is hereby amended by replacing the phrase "plus 2.0% per
annum" at the end of each of subclauses (1) and (2) thereof with the
phrase "plus 2.25% per annum".
(d) Section 2.12(b)(i) of the Credit Agreement (as previously
amended pursuant to Section 3(e) of the Forbearance Agreement) is
hereby amended by replacing the phrase "plus 2.0% per annum"
immediately following the words "plus 3.50% per annum" with the phrase
"plus 2.25% per annum".
(e) The definition of "Forbearance Period" contained in
Section 1(b) of the Forbearance Agreement, as previously amended by
the Second Amendment, is hereby amended to replace the date "August
27, 2007" in clause (ii) thereof with the date "September 30, 2007".
(f) The definition of "Forbearance Default" contained in
Section 1(c) of the Forbearance Agreement is hereby amended by (x)
deleting the word "or" immediately before clause (iv) thereof, and (y)
adding new clauses (v) and (vi) to the end thereof, as follows:
"(v) the failure of Borrower and the Guarantors to provide to the
Administrative Agent and the Financial Advisor (each of whom may
provide copies to any Private Side Lender) on or before September 6,
2007 a timetable for the store rationalization process to be
undertaken by Borrower and the Guarantors, or (vi) the failure of
Borrower and the Guarantors on or before September 6, 2007 to obtain
either (A) an amendment of, waiver under or forbearance with respect
to (1) the cross-default that would otherwise occur on August 30, 2007
as a result of their covenant default under the First Lien Credit
Agreement and (2) the interest payment due on September 7, 2007 under
the Second Lien Credit Agreement, satisfactory in form and substance
to the Requisite Lenders, or (B) an amendment of, waiver under or
forbearance with respect to any cross-default under the Senior Note
Indenture, satisfactory in form and substance to the Requisite
Lenders.
(g) The Forbearance Agreement, as previously amended by the
Second Amendment, is hereby amended in Section 6, subsection (n), by
deleting from the end of subsection (n) the words "month of August
2007" and adding in their place the words "months of August and
September 2007".
(h) The Forbearance Agreement, as previously amended by the
Second Amendment, is hereby amended by adding a new subsection (q) at
the end of Section 6 thereof, as follows:
"(q) Capital Expenditures. Capital expenditures made by Borrower and
the Guarantors shall not exceed $1.2 million for the month of
September 2007.
(i) The Forbearance Agreement, as previously amended by the
Second Amendment, is hereby amended by adding a new subsection (r) at
the end of Section 6 thereof, as follows:
"(r) September Deliverables. Unless on or before September 13, 2007,
Borrower and Guarantors deliver to the Administrative Agent (x) a
proposed term sheet for a 9-month working capital financing facility
for periods after October 1, 2007 for Borrower and the Guarantors and
(y) a proposed term sheet for the recapitalization of Borrower and the
Guarantors, the Credit Agreement is hereby amended effective as of
August 27, 2007, without any further action on the part of Borrower,
the Guarantors, the Requisite Lenders or the Administrative Agent, as
follows:
(i) Section 2.9(a)(i) of the Credit Agreement (as previously amended
pursuant to Section 3(b) of the Forbearance Agreement and Section 2(a)
of this Third Amendment) is hereby amended by replacing the phrase
"plus 1.25% per annum" at the end of each of subclauses (1) and (2)
thereof with the phrase "plus 2.0% per annum";
(ii) Section 2.9(a)(ii) of the Credit Agreement (as previously
amended pursuant to Section 3(c) of the Forbearance Agreement and
Section 2(b of this Third Amendment) is hereby amended by replacing
the phrase "plus 1.25% per annum" at the end thereof with the phrase
"plus 2.0% per annum";
(iii) Section 2.9(a)(iii) of the Credit Agreement (as previously
amended pursuant to Section 3(d) of the Forbearance Agreement and
Section 2(c) of this Third Amendment) is hereby amended by replacing
the phrase "plus 2.25% per annum" at the end of each of subclauses (1)
and (2) thereof with the phrase "plus 3.0% per annum"; and
(iv) Section 2.12(b)(i) of the Credit Agreement (as previously
amended pursuant to Section 3(e) of the Forbearance Agreement and
Section 2(d) of this Third Amendment) is hereby amended by replacing
the phrase "plus 2.25% per annum" immediately following the words
"plus 3.50% per annum" with the phrase "plus 3.0% per annum"."
(j) For the avoidance of doubt, the "Collateral Account"
referred to in Section 6(p) of the Amended Forbearance Agreement shall
mean the account described as:
Wachovia Bank, National Association
Charlotte, North Carolina
ABA No.: 053 000 219
For credit to: Wachovia Bank, National Association, as Collateral
Agent
Account No.: 5000000030279
Re: Collateral Account for Movie Gallery, Inc.;
and during the Forbearance Period the proceeds of the Dothan
transaction shall be deposited in such account.
SECTION 3. Representations and Warranties of Borrower and the
Guarantors.
To induce Administrative Agent, Collateral Agent and Requisite Lenders
to execute and deliver this Third Amendment, each of Borrower and the
Guarantors represents and warrants that:
(a) The execution, delivery and performance by each of
Borrower and the Guarantors of this Third Amendment and all documents
and instruments delivered in connection herewith and the Amended
Forbearance Agreement, the Credit Agreement and all other Credit
Documents have been duly authorized by Borrower's and each Guarantor's
respective board of directors (or similar governing body), and this
Third Amendment and all documents and instruments delivered in
connection herewith, the Amended Forbearance Agreement and the Credit
Agreement and all other Credit Documents are legal, valid and binding
obligations of Borrower and the Guarantors enforceable against such
parties in accordance with their respective terms, except as may be
limited by (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at law);
(b) Except as a result of the Existing Defaults, and except
for the representations set forth in Section 4.9 (No Material Adverse
Change) and Section 4.22 (Solvency) of the Credit Agreement, each of
the representations and warranties contained in the Credit Agreement
and the other Credit Documents is true and correct in all material
respects on and as of the date hereof to the same extent as though
made on the date hereof, except to the extent that such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true
and correct in all material respects on and as of such earlier date,
and each of the agreements and covenants in the Credit Agreement and
the other Credit Documents is hereby reaffirmed with the same force
and effect as if each were separately stated herein and made as of the
date hereof;
(c) Neither the execution, delivery and performance of this
Third Amendment and all documents and instruments delivered in
connection herewith nor the consummation of the transactions
contemplated hereby or thereby does or shall contravene, result in a
breach of, or violate (i) any provision of Borrower's or any
Guarantor's corporate charter, bylaws, operating agreement, or other
governing documents, (ii) any law or regulation, or any order or
decree of any court or government instrumentality, or (iii) any
indenture, mortgage, deed of trust, lease, agreement or other
instrument to which Borrower or any Guarantor is a party or by which
Borrower or any Guarantor or any of their respective property is
bound;
(d) As of the date hereof, except for the Existing Defaults,
no Event of Default has occurred or is continuing under this Third
Amendment, the Amended Forbearance Agreement, the Credit Agreement or
any other Credit Document; and
(e) The Lenders' and the other Secured Parties' security
interests in the Collateral continue to be valid, binding, and
enforceable first-priority security interests which secure the
Obligations subject only to the Permitted Liens.
SECTION 4. Ratification of Liability.
Each of Borrower and the Guarantors, as debtors, grantors, pledgors,
guarantors, assignors, or in other similar capacities in which such
parties grant liens or security interests in their properties or
otherwise act as accommodation parties or guarantors, as the case may
be, under the Credit Documents, hereby ratifies and reaffirms all of
its payment and performance obligations and obligations to indemnify,
contingent or otherwise, under each of such Credit Documents and the
Amended Forbearance Agreement to which such party is a party, and each
such party hereby ratifies and reaffirms its grant of liens on or
security interests in its properties pursuant to such Credit Documents
to which it is a party as security for the Obligations under or with
respect to the Credit Agreement and confirms and agrees that such
liens and security interests hereafter secure all of the Obligations,
including, without limitation, all additional Obligations hereafter
arising or incurred pursuant to or in connection with this Third
Amendment, the Amended Forbearance Agreement, the Credit Agreement or
any other Credit Document. Borrower and the Guarantors each further
agrees and reaffirms that the Credit Documents to which it is a party
now apply to all Obligations as defined in the Credit Agreement, as
modified hereby (including, without limitation, all additional
Obligations hereafter arising or incurred pursuant to or in connection
with this Third Amendment, the Amended Forbearance Agreement, the
Credit Agreement or any other Credit Document). Each such party (i)
further acknowledges receipt of a copy of this Third Amendment and all
other agreements, documents, and instruments executed and/or delivered
in connection herewith, (ii) consents to the terms and conditions of
same, and (iii) agrees and acknowledges that the Amended Forbearance
Agreement and each of the Credit Documents, as modified hereby,
remains in full force and effect and is hereby ratified and confirmed.
Except as expressly provided herein, the execution of this Third
Amendment shall not operate as a waiver of any right, power or remedy
of any Lender, nor constitute a waiver of any provision of any of the
Credit Documents nor constitute a novation of any of the Obligations
under the Amended Forbearance Agreement, the Credit Agreement or other
Credit Documents.
SECTION 5. Reference to and Effect upon the Amended Forbearance
Agreement and the Credit Documents.
(a) Except as specifically amended hereby, all terms,
conditions, covenants, representations and warranties contained in the
Amended Forbearance Agreement, the Credit Agreement and other Credit
Documents, and all rights of the Lenders and all of the Obligations,
shall remain in full force and effect. Each of Borrower and the
Guarantors hereby confirms that the Amended Forbearance Agreement, the
Credit Agreement and the other Credit Documents are in full force and
effect and that neither Borrower nor any Guarantor has any right of
setoff, recoupment or other offset or any defense, claim or
counterclaim with respect to any of the Obligations, the Amended
Forbearance Agreement, the Credit Agreement or any other Credit
Document.
(b) Except as expressly set forth herein, the execution,
delivery and effectiveness of this Third Amendment and any waivers set
forth herein shall not directly or indirectly (i) create any
obligation to make any further Loans or issue any Letters of Credit or
Synthetic Letters of Credit, or to continue to defer any enforcement
action after the occurrence of any other Default or Event of Default
(including, without limitation, any Forbearance Default), (ii)
constitute a consent or waiver of any past, present or future
violations of any provisions of the Amended Forbearance Agreement, the
Credit Agreement or any other Credit Documents, (iii) amend, modify or
operate as a waiver of any provision of the Amended Forbearance
Agreement, the Credit Agreement or any other Credit Documents or any
right, power or remedy of any Lender, (iv) constitute a consent to any
merger or other transaction or to any sale, restructuring or
refinancing transaction, (v) constitute a course of dealing or other
basis for altering any Obligations or any other contract or
instrument. Except as expressly set forth herein, each Lender and
each of the other Secured Parties reserves all of its rights, powers,
and remedies under the Amended Forbearance Agreement, the Credit
Agreement, the other Credit Documents and applicable law. All of the
provisions of the Amended Forbearance Agreement, the Credit Agreement
and the other Credit Documents, including, without limitation, the
time of the essence provisions, are hereby reiterated.
(c) From and after the Effective Date, (i) the term
"Agreement" in the Credit Agreement, and all references to the Credit
Agreement in any Credit Document shall mean the Credit Agreement as
amended by, among other things, the Amended Forbearance Agreement and
this Third Amendment, and (ii) the term "Credit Documents" in the
Credit Agreement and the other Credit Documents shall include, without
limitation, the Amended Forbearance Agreement and this Third Amendment
and any agreements, instruments and other documents executed and/or
delivered in connection herewith.
(d) No Lender or other Secured Party has waived or is by this
Third Amendment waiving, and no Lender or other Secured Party has any
intention of waiving (regardless of any delay in exercising such
rights and remedies), any Default or Event of Default which may be
continuing on the date hereof or any Event of Default which may occur
after the date hereof (whether the same or similar to the Existing
Defaults or otherwise), and no Lender or any other Secured Party has
agreed to forbear with respect to any of its rights or remedies
concerning any Events of Default (other than, during the Forbearance
Period, the Existing Defaults solely to the extent expressly set forth
herein), which may have occurred or are continuing as of the date
hereof, or which may occur after the date hereof.
(e) Borrower and each Guarantor each agrees and acknowledges
that the Lenders' agreement to forbear from exercising certain of
their default-related rights and remedies with respect to the Existing
Defaults during the Forbearance Period does not in any manner
whatsoever limit any Lender's or other Secured Party's right to insist
upon strict compliance by Borrower and the Guarantors with the Credit
Agreement, the Amended Forbearance Agreement, this Third Amendment or
any other Credit Document during the Forbearance Period, except as
related to the Existing Defaults to the extent provided herein and
otherwise as expressly set forth herein.
(f) This Third Amendment shall not be deemed or construed to
be a satisfaction, reinstatement, novation or release of the Amended
Forbearance Agreement, the Credit Agreement or any other Credit
Document.
(g) As further provided in, and without limitation of, the
Amended Forbearance Agreement, upon the occurrence of a Termination
Event, the agreement of the Lenders hereunder to forbear from
exercising their respective default-related rights and remedies shall
immediately terminate and Borrower and the Guarantors each agrees that
any or all of the Lenders and other Secured Parties may at any time
thereafter proceed to exercise any and all of their respective rights
and remedies under any or all of the Credit Agreement and any other
Credit Document and/or applicable law, including, without limitation,
the right to require that all Cash Proceeds (as such term is defined
in the Pledge and Security Agreement) be held in trust for the
Collateral Agent and turned over to the Collateral Agent to be held in
the Collateral Account (as such term is defined in the Pledge and
Security Agreement) as provided under Section 7.7 of the Pledge and
Security Agreement.
SECTION 6. Costs and Expenses.
In addition to (to the extent not otherwise provided in the Amended
Forbearance Agreement and the Credit Agreement), and not in lieu of,
the terms of the Amended Forbearance Agreement, the Credit Agreement
and other Credit Documents relating to the reimbursement of fees and
expenses, Borrower shall reimburse Administrative Agent and the other
Lenders, as the case may be, promptly on demand for all fees, costs,
charges and expenses, including the fees, costs and expenses of
counsel and other expenses, incurred in connection with this Third
Amendment and the other agreements and documents executed and/or
delivered in connection herewith.
SECTION 7. Governing Law; Consent to Jurisdiction and Venue.
THIS THIRD AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES THEREOF. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST BORROWER AND/OR ANY GUARANTOR ARISING OUT OF OR RELATING
HERETO OR ANY OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS
THIRD AMENDMENT, BORROWER AND EACH GUARANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS; (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES
THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
TO THE BORROWER OR THE APPLICABLE GUARANTOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1 OF THE CREDIT AGREEMENT; (D) AGREES THAT
SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER
PERSONAL JURISDICTION OVER THE BORROWER AND/OR THE APPLICABLE
GUARANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E)
AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
BORROWER OR ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 8. Construction.
This Third Amendment and all other agreements and documents executed
and/or delivered in connection herewith have been prepared through the
joint efforts of all of the parties hereto. Neither the provisions of
this Third Amendment or any such other agreements and documents nor
any alleged ambiguity therein shall be interpreted or resolved against
any party on the ground that such party or its counsel drafted this
Third Amendment or such other agreements and documents, or based on
any other rule of strict construction. Each of the parties hereto
represents and declares that such party has carefully read this Third
Amendment and all other agreements and documents executed in
connection therewith, and that such party knows the contents thereof
and signs the same freely and voluntarily. The parties hereto
acknowledge that they have been represented by legal counsel of their
own choosing in negotiations for and preparation of this Third
Amendment and all other agreements and documents executed in
connection herewith and that each of them has read the same and had
their contents fully explained by such counsel and is fully aware of
their contents and legal effect. If any matter is left to the
decision, right, requirement, request, determination, judgment,
opinion, approval, consent, waiver, satisfaction, acceptance,
agreement, option or discretion of one or more Lenders, the other
Secured Parties or their respective employees, counsel, or agents in
the Amended Forbearance Agreement, the Credit Agreement or any other
Credit Documents, such action shall be deemed to be exercisable by
such Lenders, such other Secured Parties or such other Person in its
sole and absolute discretion and according to standards established in
its sole and absolute discretion. Without limiting the generality of
the foregoing, "option" and "discretion" shall be implied by the use
of the words "if" and "may."
SECTION 9. Counterparts.
This Third Amendment may be executed in any number of counterparts,
each of which when so executed shall be deemed an original, but all
such counterparts shall constitute one and the same instrument, and
all signatures need not appear on any one counterpart. Any party
hereto may execute and deliver a counterpart of this Third Amendment
by delivering by facsimile or other electronic transmission a
signature page of this Third Amendment signed by such party, and any
such facsimile or other electronic signature shall be treated in all
respects as having the same effect as an original signature. Any
party delivering by facsimile or other electronic transmission a
counterpart executed by it shall promptly thereafter also deliver a
manually signed counterpart of this Third Amendment.
SECTION 10. Severability.
The invalidity, illegality, or unenforceability of any provision in or
obligation under this Third Amendment in any jurisdiction shall not
affect or impair the validity, legality, or enforceability of the
remaining provisions or obligations under this Third Amendment or of
such provision or obligation in any other jurisdiction. If feasible,
any such offending provision shall be deemed modified to be within the
limits of enforceability or validity; however, if the offending
provision cannot be so modified, it shall be stricken and all other
provisions of this Third Amendment in all other respects shall remain
valid and enforceable.
SECTION 11. Time of Essence.
Time is of the essence in the performance of each of the obligations
of Borrower and the Guarantors hereunder and with respect to all
conditions to be satisfied by such parties.
SECTION 12. No Other Creditor Action.
The Lenders' and the other Secured Parties' obligations to forbear are
expressly conditioned upon all other creditors of Borrower and the
Guarantors (including, without limitation, trade creditors) refraining
or otherwise forbearing from exercising remedies or otherwise taking
any enforcement action against Borrower, any Guarantor or the
Collateral (including, without limitation, acceleration of
indebtedness) during the Forbearance Period. In the event that any
such creditor takes any such action, all of the Lenders' and the other
Secured Parties' obligations hereunder and under the Amended
Forbearance Agreement shall automatically and immediately terminate
without further notice (provided, that, without limitation of this
Section 12, the Administrative Agent agrees to give notice of such
event to the Borrower (it being understood that the failure to give
such notice will not prevent the operation of this Section 12 and that
the Administrative Agent shall have no liability to the Borrower, any
of its Subsidiaries or their respective affiliates for the failure to
give such notice)) or demand.
SECTION 13. Further Assurances.
Borrower and each Guarantor agrees to take all further actions and
execute all further documents as Administrative Agent may from time to
time reasonably request to carry out the transactions contemplated by
this Third Amendment, the Amended Forbearance Agreement and all other
agreements executed and delivered in connection herewith.
SECTION 14. Section Headings.
Section headings in this Third Amendment are included herein for
convenience of reference only and shall not constitute part of this
Third Amendment for any other purpose.
SECTION 15. Notices.
All notices, requests, and demands to or upon the respective parties
hereto shall be given in accordance with the Credit Agreement.
SECTION 16. Effectiveness.
This Third Amendment shall become effective when all of the following
conditions precedent have been met (or waived) as determined by
Administrative Agent and the Requisite Lenders in their sole
discretion (provided, that Section 2 hereof shall become effective
upon satisfaction of the condition set forth in the following
subclause (a)):
(a) Execution of Third Amendment. Administrative Agent shall
have received duly executed signature pages for this Third Amendment
signed by Administrative Agent, Collateral Agent, Requisite Lenders,
Borrower and the Guarantors.
(b) Closing Fee. In consideration of the accommodations
granted by the Administrative Agent, the Collateral Agent and the
Requisite Lenders in this Third Amendment, in addition to all other
fees and costs owed under the Amended Forbearance Agreement, the
Borrower and the Guarantors shall pay to the Administrative Agent,
ratably for its account and the account of each Lender that was a
Lender as of the date of effectiveness of this Third Amendment, a fee
equal to (x) 0.20% multiplied by (y) the aggregate Revolving Exposure
plus Term Loan Exposure plus Synthetic LC Exposure of each Lender.
(c) Representations and Warranties. The Borrower and the
Guarantors shall have confirmed in writing that the representations
and warranties contained herein and in the Amended Forbearance
Agreement shall be true and correct, and no Forbearance Default,
Default or Event of Default, other than the Existing Defaults, shall
exist on the date hereof.
SECTION 17. Waivers by Borrower and the Guarantors.
(a) Waiver of Jury Trial Right and Other Matters. BORROWER
AND EACH OF THE GUARANTORS EACH HEREBY WAIVES (i) THE RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS THIRD AMENDMENT, THE AMENDED
FORBEARANCE AGREEMENT, THE CREDIT AGREEMENT, ANY OF THE OTHER CREDIT
DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (ii) PRESENTMENT, DEMAND
AND PROTEST, AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NONPAYMENT,
MATURITY, RELEASE WITH RESPECT TO ALL OR ANY PART OF THE OBLIGATIONS
OR ANY COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS,
INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY ANY
LENDER ON WHICH BORROWER OR ANY GUARANTOR MAY IN ANY WAY BE LIABLE AND
HEREBY RATIFIES AND CONFIRMS WHATEVER SUCH LENDER MAY DO IN THIS
REGARD; (iii) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF THE
COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY
COURT PRIOR TO ALLOWING ANY LENDER TO EXERCISE ANY OF THEIR RESPECTIVE
RIGHTS AND REMEDIES; (iv) THE BENEFIT OF ALL VALUATION, APPRAISEMENT
AND EXEMPTION LAWS AND ALL RIGHTS WAIVABLE UNDER ARTICLE 9 OF THE
UNIFORM COMMERCIAL CODE; (v) ANY RIGHT BORROWER OR ANY GUARANTOR MAY
HAVE UPON PAYMENT IN FULL OF THE OBLIGATIONS TO REQUIRE ANY LENDER OR
OTHER SECURED PARTY TO TERMINATE ITS SECURITY INTEREST IN THE
COLLATERAL OR IN ANY OTHER PROPERTY OF BORROWER OR ANY GUARANTOR UNTIL
TERMINATION OF THE CREDIT AGREEMENT IN ACCORDANCE WITH ITS TERMS AND
THE EXECUTION BY BORROWER, AND BY ANY PERSON WHO PROVIDES FUNDS TO
BORROWER WHICH ARE USED IN WHOLE OR IN PART TO SATISFY THE
OBLIGATIONS, OF AN AGREEMENT INDEMNIFYING ANY OR ALL OF THE LENDERS
AND THE OTHER SECURED PARTIES FROM ANY LOSS OR DAMAGE ANY SUCH PARTY
MAY INCUR AS THE RESULT OF DISHONORED CHECKS OR OTHER ITEMS OF PAYMENT
RECEIVED BY SUCH LENDER OR OTHER SECURED PARTY FROM BORROWER, OR ANY
ACCOUNT DEBTOR AND APPLIED TO THE OBLIGATIONS AND RELEASING AND
INDEMNIFYING, IN THE SAME MANNER AS DESCRIBED IN SECTION 7 OF THE
AMENDED FORBEARANCE AGREEMENT, THE RELEASEES FROM ALL CLAIMS ARISING
ON OR BEFORE THE DATE OF SUCH TERMINATION STATEMENT; AND (vi) NOTICE
OF ACCEPTANCE HEREOF, AND BORROWER THE GUARANTORS EACH ACKNOWLEDGES
THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE
AGENT'S AND SIGNING LENDER'S ENTERING INTO THIS THIRD AMENDMENT AND
THAT SUCH PARTIES ARE RELYING UPON THE FOREGOING WAIVERS IN THEIR
FUTURE DEALINGS WITH BORROWER AND THE GUARANTORS. BORROWER AND THE
GUARANTORS EACH WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE
FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS THIRD AMENDMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
SECTION 18. Assignments; No Third Party Beneficiaries.
This Third Amendment shall be binding upon and inure to the benefit of
Borrower, the Guarantors, the Lenders and the other Secured Parties
and their respective successors and assigns; provided, that neither
Borrower nor any Guarantor shall be entitled to delegate any of its
duties hereunder and shall not assign any of its rights or remedies
set forth in this Third Amendment without the prior written consent of
Administrative Agent in its sole discretion. No Person other than the
parties hereto, and in the case of Section 7 of the Amended
Forbearance Agreement, the Releasees, shall have any rights hereunder
or be entitled to rely on this Third Amendment and all third-party
beneficiary rights (other than the rights of the Releasees under
Section 7 of the Amended Forbearance Agreement) are hereby expressly
disclaimed.
SECTION 19. Final Agreement.
This Third Amendment, the Amended Forbearance Agreement, the Credit
Agreement, the other Credit Documents, and the other written
agreements, instruments, and documents entered into in connection
therewith (collectively, the "Borrower/Lender Documents") set forth in
full the terms of agreement between the parties hereto and thereto and
are intended as the full, complete, and exclusive contracts governing
the relationship between such parties, superseding all other
discussions, promises, representations, warranties, agreements, and
understandings between the parties with respect thereto. No term of
the Borrower/Lender Documents may be modified or amended, nor may any
rights thereunder be waived, except in a writing signed by the party
against whom enforcement of the modification, amendment, or waiver is
sought. Any waiver of any condition in, or breach of, any of the
foregoing in a particular instance shall not operate as a waiver of
other or subsequent conditions or breaches of the same or a different
kind. Administrative Agent's, any Lender's or any other Secured
Party's exercise or failure to exercise any rights or remedies under
any of the foregoing in a particular instance shall not operate as a
waiver of its right to exercise the same or different rights and
remedies in any other instances. There are no oral agreements among
the parties hereto.
SECTION 20. Administrative Agent.
The Requisite Lenders hereby authorize the Administrative Agent to
execute this Third Amendment.
Signature pages to follow
IN WITNESS WHEREOF, the duly authorized representatives of the
parties have caused this Third Amendment to be executed and
delivered as of the date first written above, and acknowledge
that they have read and understood this Third Amendment.
MOVIE GALLERY, INC.
By:
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Administrative Agent and a Lender
By:
Authorized Signatory
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Collateral Agent and a Lender
By:
Name:
Title:
[LENDER]
By:
Name:
Title:
RATIFICATION OF OBLIGATIONS
Each of the undersigned Guarantors hereby acknowledges, agrees and
consents to the foregoing Third Amendment and agrees that the guaranty
under the Credit Agreement and each of the other Credit Documents
remain in full force and effect, and the Guarantors confirm and ratify
all of their obligations under the Amended Forbearance Agreement and
each Credit Document to which such Guarantor is a party.
MOVIE GALLERY US, LLC
By: Movie Gallery, Inc., its Manager and Sole Member
By: ___________________________
Name:
Title:
M.G. DIGITAL, LLC
By: Movie Gallery US, LLC, its Manager and Sole Member
By: Movie Gallery, Inc., its Manager and Sole Member
By: ___________________________
Name:
Title:
M.G.A REALTY I, LLC
By: Movie Gallery US, LLC, its Manager and Sole Member
By: Movie Gallery, Inc., its Manager and Sole Member
By: ___________________________
Name:
Title:
HOLLYWOOD ENTERTAINMENT CORPORATION
By: ___________________________
Name:
Title:
MG AUTOMATION LLC
By: Hollywood Entertainment Corporation, its Manager and Sole Member
By: ___________________________
Name:
Title: