THIRD AMENDMENT TO FORBEARANCE AGREEMENT

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, GOLDMAN SACHS 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 an