AMENDED AND RESTATED FIRST LIEN CREDIT AND GUARANTY AGREEMENT

Exhibit 10.2

EXECUTION VERSION

AMENDED AND RESTATED

FIRST LIEN CREDIT AND GUARANTY AGREEMENT

dated as of March 8, 2007

as

amended and restated as of May 20, 2008

among

MOVIE GALLERY, INC.,

CERTAIN SUBSIDIARIES OF

MOVIE GALLERY, INC.

as Guarantors,

VARIOUS LENDERS

and

WILMINGTON TRUST COMPANY,

as Administrative Agent

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Collateral Agent

$626,488,750 Senior Secured First Priority Credit Facilities

TABLE OF CONTENTS

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AMENDED AND RESTATED

FIRST LIEN CREDIT AND GUARANTY AGREEMENT

This AMENDED AND RESTATED FIRST LIEN CREDIT AND GUARANTY AGREEMENT , dated as of March 8, 2007, as amended and restated as of May 20, 2008, is entered into by and among MOVIE GALLERY, INC. , a Delaware corporation ( “Borrower” ), CERTAIN SUBSIDIARIES OF BORROWER , as Guarantors, the Lenders party hereto from time to time, WILMINGTON TRUST COMPANY ( “Wilmington” ), as Administrative Agent (together with its permitted successors in such capacity, “Administrative Agent” ) DEUTSCHE BANK TRUST COMPANY AMERICAS ( “DBTCA” ) as Collateral Agent (together with its permitted successors in such capacity, “Collateral Agent” ).

RECITALS:

WHEREAS, capitalized terms used in these Recitals shall have the respective meanings set forth for such terms in Section 1.1 hereof;

WHEREAS, the Credit Parties had previously entered into a First Lien and Guaranty Agreement, dated of March 8, 2007 (as amended prior to the date hereof, the “ Existing First Lien Credit Agreement ”), with the Lenders, Goldman Sachs Credit Partners L.P. ( “GSCP” ) as administrative agent and as syndication agent, and Wachovia Bank, National Association as collateral agent and as documentation agent, pursuant to which Lenders had extended certain credit facilities to Credit Parties in an aggregate initial amount of $725,000,000, consisting of $600,000,000 aggregate principal amount of Term Loans, $100,000,000 aggregate principal amount of Revolving Commitments and $25,000,000 aggregate principal amount of Synthetic LC Commitments;

WHEREAS, on October 16, 2007 (the “ Petition Date ”), Credit Parties filed voluntary petitions for relief commencing cases (collectively, the “ Cases ”) under Chapter 11 of the Bankruptcy Code with the Bankruptcy Court;

WHEREAS , the Credit Parties, as Debtors, had previously entered into a Secured Super-Priority Debtor in Possession Credit and Guaranty Agreement, dated of October 16, 2007 (as amended, the “ DIP Credit Agreement ”), with the lenders party thereto, GSCP as syndication agent and as documentation agent, and The Bank of New York as administrative agent and as collateral agent, pursuant to which the lenders thereunder had extended certain credit facilities to the Debtors in an aggregate amount not to exceed $150,000,000, consisting of $100,000,000 aggregate principal amount of “Term Loans” (as defined in the DIP Credit Agreement) and $50,000,000 aggregate principal amount of “Revolving Commitments” (as defined in the DIP Credit Agreement), the proceeds of which were used, among other things, to refinance the Obligations under the Existing First Lien Credit Agreement in respect of revolving loans, swing line loans and letters of credit;

WHEREAS , on April 10, 2008, the Bankruptcy Court confirmed the Debtors’ Second Amended Joint Plan of Reorganization of Movie Gallery, Inc. and Its Debtor Subsidiaries Under Chapter 11 of the Bankruptcy Code (as amended, supplemented or modified from time to time, together with any “Plan Supplement” (as defined in the Plan), the “Plan” );

WHEREAS , as part of the implementation of the Plan, Borrower has requested Lenders to amend and restate the Existing First Lien Credit Agreement on the terms and conditions set forth herein, pursuant to which Lenders have agreed, or otherwise are required pursuant to the Plan, to extend certain credit facilities to Credit Parties in an aggregate amount not to exceed $626,488,750, consisting of $602,988,750 aggregate principal amount of Term Loans, and $23,500,000 aggregate principal amount of Synthetic LC Commitments, plus payment-in-kind interest and other principal increases as provided hereunder;

WHEREAS , Borrower has secured and has agreed to continue to secure all of its Obligations by granting to Joint First Lien Collateral Agent, for the benefit of Secured Parties, a First Priority Lien on substantially all of its assets, including a pledge of all of the Equity Interests of each of its Domestic Subsidiaries (including the Real Estate Guarantors) and 65% of all the Equity Interests of each of its Foreign Subsidiaries, and Borrower has formed the Real Estate Guarantors for purposes of holding Leasehold Property; and

WHEREAS, Guarantors (including the Real Estate Guarantors) have guaranteed and have agreed to continue to guarantee the obligations of Borrower hereunder and to secure their respective Obligations by granting to Joint First Lien Collateral Agent, for the benefit of Secured Parties, a First Priority Lien on substantially all of their respective assets, including a pledge of all of the Equity Interests of each of their respective Domestic Subsidiaries and 65% of all the Equity Interests of each of their respective Foreign Subsidiaries.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

SECTION 1. DEFINITIONS AND INTERPRETATION

1.1. Definitions. The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:

“Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing (and rounding upward to the next whole multiple of 1/16 of 1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be the offered rate which appears on the page of the Telerate Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being page number 3740 or 3750, as applicable) for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (b) in the event the rate referenced in the preceding clause (a) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service which displays an average British Bankers Association Interest Settlement Rate for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (c) in the event the rates referenced in the preceding clauses (a) and

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(b) are not available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to first class banks in the London interbank market by JPMorgan Chase Bank for deposits (for delivery on the first day of the relevant period) in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loan of Administrative Agent, in its capacity as a Lender, for which the Adjusted Eurodollar Rate is then being determined with maturities comparable to such period as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, by (ii) an amount equal to (a) one minus (b) the Applicable Reserve Requirement.

“Additional Letters of Credit” means any letters of credit issued on the following terms: (A) the Indebtedness or other obligations in respect of such letters of credit shall be unsecured, except for the Lien permitted to be incurred pursuant to Section 6.2(s), (B) the provisions thereof shall be on commercially reasonable reimbursement agreement terms for cash collateralized letters of credit and, to the extent applicable in such reimbursement agreement, the covenants, events of default, subordination and other provisions thereof (including any guarantees thereof) shall be, in the aggregate, no less favorable to the Borrower and to the Lenders than those contained in this Credit Agreement and (C) no Default or Event of Default shall have occurred and be continuing or result therefrom.

“Administrative Agent” as defined in the preamble hereto.

“Administrative Questionnaire” means a questionnaire containing administrative information regarding a Lender, in the form customarily used by the Administrative Agent in transactions similar to this Agreement.

“Adverse Proceeding” means any action, suit, proceeding, hearing (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of Borrower or any of its Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims), whether pending or, to the knowledge of Borrower or any of its Subsidiaries, threatened against or adversely affecting Borrower or any of its Subsidiaries or any property of Borrower or any of its Subsidiaries.

“Affected Lender” as defined in Section 2.19(b).

“Affected Loans” as defined in Section 2.19(b).

“Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (i) to vote 5% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

“Agent” means each of Administrative Agent, Collateral Agent and Synthetic LC Agent.

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“Agent Affiliates” as defined in Section 10.1(b).

“Aggregate Amounts Due” as defined in Section 2.18.

“Aggregate Payments” as defined in Section 7.2.

“Agreement” means this Amended and Restated First Lien Credit and Guaranty Agreement, dated as of March 8, 2007, as amended and restated as of May 20, 2008, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Applicable Margin Adjustment” means 0.25% on the first anniversary of the Closing Date, plus an additional 0.25% on each date that is the end of each six month period following such first anniversary of the Closing Date.

“Applicable Reserve Requirement” means, at any time, for any Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which reserves (including any basic marginal, special, supplemental, emergency or other reserves) are required to be maintained with respect thereto against “Eurocurrency liabilities” (as such term is defined in Regulation D) under regulations issued from time to time by the Board of Governors or other applicable banking regulator. Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (i) any category of liabilities which includes deposits by reference to which the applicable Adjusted Eurodollar Rate or any other interest rate of a Loan is to be determined, or (ii) any category of extensions of credit or other assets which include Eurodollar Rate Loans. A Eurodollar Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credit for proration, exceptions or offsets that may be available from time to time to the applicable Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted automatically on and as of the effective date of any change in the Applicable Reserve Requirement.

“ Approved Electronic Communications ” means any notice, demand, communication, information, document or other material that any Credit Party provides to Administrative Agent pursuant to any Credit Document or the transactions contemplated therein which is distributed to the Agents or to the lenders by means of electronic communications pursuant to Section 10.1(b).

“Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and leaseback, assignment, conveyance, exclusive license (as licensor or sublicensor), transfer or other disposition to, or any exchange of property with, any Person (other than Borrower or any Guarantor Subsidiary), in one transaction or a series of transactions, of all or any part of Borrower’s or any of its Subsidiaries’ businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, leased or licensed, including the Equity Interests of any of Borrower’s Subsidiaries, other than (i) inventory (or other assets) sold, leased or licensed out in the ordinary course of business (excluding any such sales, leases or licenses out by operations or divisions discontinued or to be discontinued), and (ii) sales, leases or licenses out of other assets for aggregate consideration of less than $2,000,000 in the aggregate during any Fiscal Year.

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“Assignment Agreement” means an Assignment and Assumption Agreement substantially in the form of Exhibit E, with such amendments or modifications as may be approved by Administrative Agent (provided, that the approval of the Requisite Lenders shall be required to amend or modify any provision of Exhibit E that relates to Restricted Sponsor Affiliates (such approval not to be unreasonably withheld or delayed)).

“Assignment Effective Date” as defined in Section 10.6(b).

“Authorized Officer” means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president or one of its vice presidents (or the equivalent thereof), and such Person’s chief financial officer or treasurer.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

“Bankruptcy Court” means the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division, or any other court having competent jurisdiction over the Cases.

“Base Rate” means, for any day, a rate per annum equal to the greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds Effective Rate in effect on such day plus  ¹ / 2 of 1%. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“Base Rate Loan” means a Loan bearing interest at a rate determined by reference to the Base Rate.

“Benchmark LIBOR Rate” as defined in Section 2.5(m).

“Beneficiary” means each Agent, Synthetic LC Issuing Bank, Lender and Lender Counterparty.

“Board of Governors” means the Board of Governors of the United States Federal Reserve System, or any successor thereto.

“Borrower” as defined in the preamble hereto.

“Budget” means the business plan and projected operating budget by the Credit Parties, dated March 31, 2008 (which includes income statements, balance sheets, cash flow statements, and a line item for “total available liquidity”), on (i) a monthly basis for the then-current Fiscal Year and (ii) on a quarterly basis for the then-current Fiscal Year and through the next succeeding two Fiscal Years (but in no event through a date that is later than the Term Loan Maturity Date), and setting forth the anticipated uses of the Commitments, and which shall provide for the payment of the fees and expenses relating to the Commitments, ordinary course administrative expenses, and working capital and other general corporate needs, in form satisfactory to Administrative Agent (it being understood and agreed that the form of the Budget dated March 31, 2008 provided to Administrative Agent on or prior to the Closing Date is acceptable to Administrative Agent).

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“Business Day” means (i) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close and (ii) with respect to all notices, determinations, fundings and payments in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans, the term “Business Day” shall mean any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in Dollar deposits in the London interbank market.

“Canadian Subsidiary” means any Subsidiary that is incorporated, organized or otherwise established under the laws of Canada or any political subdivision of Canada.

“Capital Contribution Notice” as defined in Section 10.6(k)(ii).

“Capital Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.

“Cases” as defined in the recitals hereto.

“Cash” means money, currency or a credit balance in any demand or Deposit Account.

“Cash Equivalents” means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; (v) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000, and (c) has the highest rating obtainable from either S&P or Moody’s and (vi) solely in respect of the cash management activities of Subsidiaries of Borrower organized under the laws of Canada or any province or territory thereof, equivalents to the investments described in clause (i)  above to the extent guaranteed by the full faith and credit of the government of Canada and equivalents of investments described in clauses (iii)  and (iv)

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above issued, accepted or offered by the local office of any commercial bank organized under the laws of Canada, or any province or territory thereof of such Canadian Subsidiary, which bank has combined capital and surplus of not less than $1,000,000,000.

“Certificate re Non-Bank Status” means a certificate substantially in the form of Exhibit F.

“ Change of Control ” means, at any time after the Closing Date and except as contemplated by the Plan, (i) any Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) other than a Sponsor Affiliate (a) shall have acquired beneficial ownership of 35% or more on a fully diluted basis of the voting and/or economic interest in the Equity Interests of Borrower (provided, that if such percentage is exceeded as a result of an exchange of the Borrower’s Equity Interests for Indebtedness, then this subclause (i)(a) shall not be the basis of an Change of Control unless such Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) other than a Sponsor Affiliate shall have beneficial ownership of 50% or more on a fully diluted basis of the voting and/or economic interest in the Equity Interests of Borrower outstanding after giving effect to such exchange of the Borrower’s Equity Interests for Indebtedness) or (b) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of Borrower; (ii) the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of Borrower cease to be occupied by Persons who either (a) were members of the board of directors of Borrower on the Closing Date or (b) were nominated for election by the board of directors of Borrower, a majority of whom were directors on the Closing Date or whose election or nomination for election was previously approved by a majority of such directors; or (iii) Borrower and Guarantors shall cease to be the direct or indirect holders or owners of one hundred percent (100%) of the Equity Interests of Real Estate Guarantors, subject to the lien of the Pledge and Security Agreement.

“Class” means with respect to Lenders, each of the following classes of Lenders: (i) Lenders having Term Loan Exposure and (ii) Lenders having Synthetic LC Deposits.

“Closing Date” means the date on which the conditions to effectiveness of this Agreement under Section 3.1 and Section 3.2 are satisfied or otherwise waived in accordance with the terms of this Agreement.

“Closing Date Certificate” means a Closing Date Certificate substantially in the form of Exhibit G-1.

“Closing Date Mortgaged Property” as defined in Section 3.1(g).

“Collateral” means, collectively, all of the real, personal and mixed property (including Equity Interests (but limited to 65% of such interests in Foreign Subsidiaries as and to the extent set forth in the Pledge and Security Agreement) and all monies and other property of any kind received on account thereof) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.

“Collateral Agent” as defined in the preamble hereto.

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“Collateral Agency Agreement” means the Collateral Agency Agreement, dated as of the Closing Date, by and among the Joint First Lien Collateral Agent, the Administrative Agent, the Revolving Administrative Agent and the Company, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Collateral Documents” means the Pledge and Security Agreement, the Mortgages, the Intellectual Property Security Agreements, the Landlord Personal Property Collateral Access Agreements, if any, and all other instruments, documents and agreements delivered by any Credit Party pursuant to this Agreement or any of the other Credit Documents, or constituting “Collateral Documents” under and as defined in the Existing First Lien Credit Agreement, in each case in order to grant to Collateral Agent and/or Joint First Lien Collateral Agent, for the benefit of Secured Parties, or perfect, a Lien on any real, personal or mixed property of that Credit Party as security for the Obligations.

“Collateral Questionnaire” means a certificate in form satisfactory to Collateral Agent that provides information with respect to the personal or mixed property of each Credit Party.

“Commitment” means any Synthetic LC Commitment or Term Loan Commitment.

“Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit C.

“Confirmation Order” means the order by the Bankruptcy Court entered on April 10, 2008 confirming the Plan.

“Consolidated Adjusted EBITDA” means, for any period, an amount determined for Borrower and its Subsidiaries on a consolidated basis equal to (x) Consolidated Net Income, plus , to the extent reducing Consolidated Net Income, the sum, without duplication, of amounts for (a) consolidated interest expense (determined in accordance with GAAP), (b) provisions for taxes based on income, (c) total depreciation expense, (d) total amortization expense (excluding Rental Items amortization, except for one time and incremental charges resulting from changes in estimates and accounting principles), (e) losses from Hedge Agreements, (f) losses from discontinued operations, (g) losses from changes in estimates and accounting principles (including subsequent changes related to a change in the salvage value of rental inventory), (h) fees and costs associated with the early extinguishment of debt, (i) fees and other expenses made or incurred in connection with the transactions contemplated hereby that are paid or accounted for (without duplication) within 180 days of the Closing Date, (j) reasonable fees or expenses relating to any issuance of Equity Interests, permitted Investments, Permitted Acquisitions or Indebtedness, whether or not such transaction is consummated, to the extent deducted in computing Consolidated Net Income, (k) with respect to any period (including any Fiscal Quarter) during Fiscal Year 2008, costs and expenses actually incurred resulting from administrative expenses paid with respect to the Cases for professional fees and expenses and costs and expenses with respect to severance obligations and/or employee retention plans adopted by the Borrower and approved by the Bankruptcy Court prior to the Closing Date; (l) with respect to any period (including any Fiscal Quarter) during Fiscal Year 2008, amounts paid

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as cure payments or similar costs in connection with executory contracts assumed during the Cases or as part of the Plan, (m) non-recurring costs, losses and restructuring charges, in each case associated with general and administration costs in connection with the implementation and management of Real Estate Guarantors, (n) costs or losses resulting directly from store closures, lease terminations and liquidations of associated inventory which, in each case, commenced prior to the Plan Effective Date, (o) costs and expenses with respect to severance obligations and/or employee retention plans not to exceed $5,000,000 in the aggregate from and after the Closing Date, (p) other non-Cash charges reducing Consolidated Net Income (excluding any such non-Cash charge to the extent that it represents an accrual or reserve for potential Cash charge in any future period or amortization of a prepaid Cash charge that was paid in a prior period), (q) non-recurring losses not to exceed $10,000,0000 in the aggregate from and after the Closing Date or (r) non-recurring costs, losses and restructuring charges, in each case associated with general and administrative costs (but in no event including costs associated with store openings, closings and relocations) in connection with consolidating the operations of the Movie Gallery division and the Hollywood division not to exceed $10,000,000 in the aggregate from and after the Closing Date, minus (y) to the extent increasing Consolidated Net Income, the sum, without duplication, of amounts for (a) gains from Hedge Agreements, (b) income from discontinued operations, (c) income from changes in accounting principles (including subsequent changes related to a change in the salvage value of rental inventory), (c) gains resulting from liquidations of inventory commenced prior to the Plan Effective Date, (d) other non-Cash gains increasing Consolidated Net Income for such period (excluding any such non-Cash gain to the extent it represents the reversal of an accrual or reserve for potential Cash gain in any prior period) and (e) non-recurring gains not to exceed $10,000,0000 in the aggregate from and after the Closing Date. For all purposes of this Agreement, Consolidated Adjusted EBITDA shall equal $2,385,193 for the second Fiscal Quarter of 2007; $18,038,950 for the third Fiscal Quarter of 2007; $44,312,703 for the fourth Fiscal Quarter of 2007; and $56,473,694 for the first Fiscal Quarter of 2008.

“Consolidated Capital Expenditures” means, for any period, the aggregate of all expenditures of Borrower and its Subsidiaries during such period determined on a consolidated basis that, in accordance with GAAP, are or should be included in “purchase of property and equipment” or similar items reflected in the consolidated statement of cash flows of Borrower and its Subsidiaries (but shall in any event exclude the purchase or acquisition of assets pursuant to a Permitted Acquisition).

“Consolidated Current Assets” means, as at any date of determination, the total assets of Borrower and its Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding Cash and Cash Equivalents.

“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of Borrower and its Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding the current portion of long term debt.

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive) equal to: (i) the sum, without duplication, of the amounts for such period of (a) Consolidated Adjusted EBITDA, (b) the Consolidated Working Capital Adjustment, (c) the

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amount by which amortization of Rental Items exceeds cash purchases of Rental Items and (d) extraordinary and non-recurring gains of the type described in clause (e)(A) and (e)(B) of the definition of “Consolidated Net Income” (not to exceed the aggregate amounts referred to in such clauses) to the extent such gains are received in cash during such period, minus (ii) the sum, without duplication, of the amounts for such period paid in cash from operating cash flow of (a) scheduled repayments of Indebtedness for borrowed money (including Indebtedness under the Seasonal Overadvance Facility, and excluding repayments of Revolving Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments, but including the principal component of Capital Leases), (b) Consolidated Capital Expenditures (net of any proceeds of (y) any related financings with respect to such expenditures and (z) any sales of assets used to finance such expenditures), (c) Consolidated Interest Expense, (d) provisions for current taxes based on income of Borrower and its Subsidiaries and payable in cash with respect to such period, (e) the amount by which cash purchases of Rental Items exceeds amortization of Rental Items, (f) extraordinary and non-recurring costs, losses and restructuring charges of the type described in clause (e)(B) of the definition of “Consolidated Net Income”, in clauses (x)(q) and (x)(r) of the definition of “Consolidated Adjusted EBITDA” (not to exceed the aggregate amounts referred to in such clauses) or in clauses (x)(i) through and including (x)(o) of the definition of “Consolidated Adjusted EBITDA” to the extent such charges are actually paid in cash during such period; (g) with respect to Fiscal Year 2008, to the extent added in clause (x)(k) of the definition of “Consolidated Adjusted EBITDA”, costs and expenses actually incurred resulting from administrative expenses with respect to the Cases which are for professional fees and expenses and are paid in Cash; and (h) to the extent added in clause (x)(l) of the definition of “Consolidated Adjusted EBITDA”, amounts paid in Cash during such Fiscal Year as cure payments or similar costs in connection with executory contracts assumed during the Cases or as part of the Plan.

“Consolidated Interest Expense” means, for any period, total interest expense (including that portion attributable to Capital Leases in accordance with GAAP and capitalized interest) of Borrower and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Borrower and its Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letters of credit and net costs under Interest Rate Agreements, but excluding, however, any amount not payable in Cash and any amounts referred to in Section 2.12(e)(i) payable on or before the Closing Date.

“Consolidated Net Income” means, for any period, (i) the net income (or loss) of Borrower and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, but excluding the effects of any of the following, (ii) (a) the income (or loss) of any Person (other than a Subsidiary of Borrower) in which any other Person (other than Borrower or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Borrower or any of its Subsidiaries by such Person during such period, (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Borrower or is merged into or consolidated with Borrower or any of its Subsidiaries or that Person’s assets are acquired by Borrower or any of its Subsidiaries, (c) the income of any Subsidiary of Borrower to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that

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Subsidiary, (d) any after-tax gains or losses attributable to Asset Sales or returned surplus assets of any Pension Plan, and (e) (to the extent not included in clauses (a) through (d) above) any (A) net extraordinary gains or (B) net extraordinary losses.

“Consolidated Working Capital” means, as at any date of determination, the excess of Consolidated Current Assets over Consolidated Current Liabilities (which may be a negative number).

“Consolidated Working Capital Adjustment” means, for any period on a consolidated basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated Working Capital as of the end of such period.

“Contractual Obligation” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

“Contributing Guarantors” as defined in Section 7.2.

“Covenant Measurement Date” as defined in Section 10.6(k)(ii).

“Conversion/Continuation Date” means the effective date of a continuation or conversion, as the case may be, as set forth in the applicable Conversion/Continuation Notice.

“Conversion/Continuation Notice” means a Conversion/Continuation Notice substantially in the form of Exhibit A-2.

“Counterpart Agreement” means a Counterpart Agreement substantially in the form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.

“Credit Date” means the date of a Credit Extension.

“Credit Document” means any of this Agreement, the Notes, if any, the Collateral Documents, the Intercreditor Agreement, the Collateral Agency Agreement, any documents or certificates executed by Borrower in favor of Synthetic LC Issuing Bank relating to Synthetic Letters of Credit, and all other documents, instruments or agreements executed and delivered by a Credit Party for the benefit of any Agent, Synthetic LC Issuing Bank or any Lender in connection herewith or the Existing First Lien Credit Agreement.

“Credit Extension” means the making of a Loan, the issuing of a Synthetic Letter of Credit, or the making of a Synthetic LC Deposit.

“Credit Party” means Borrower and each Guarantor.

“Currency Agreement” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, each of which is for the purpose of hedging the foreign currency risk associated with Borrower’s and its Subsidiaries’ operations and not for speculative purposes.

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“Debtors” means Borrower and each Guarantor that was a debtor in the Cases.

“Default” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

“Default Excess” means, with respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal amount of Loans of all Lenders (calculated as if all Defaulting Lenders (including such Defaulting Lender) had funded all of their respective Defaulted Loans) over the aggregate outstanding principal amount of all Loans of such Defaulting Lender.

“Default Period” means, with respect to any Defaulting Lender, the period commencing on the date of the applicable Funding Default and ending on the earliest of the following dates: (i) the date on which all Commitments are cancelled or terminated and/or the Obligations are declared or become immediately due and payable, (ii) the date on which (a) the Default Excess with respect to such Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the non-pro rata application of any voluntary or mandatory prepayments of the Loans in accordance with the terms of Section 2.14 or Section 2.15 or by a combination thereof) and (b) such Defaulting Lender shall have delivered to Borrower and Administrative Agent a written reaffirmation of its intention to honor its obligations hereunder with respect to its Commitments, and (iii) the date on which Borrower, Administrative Agent and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in writing.

“Defaulted Loan” as defined in Section 2.23.

“Defaulting Lender” as defined in Section 2.23.

“Deposit Account” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.

“DIP Credit Agreement” as defined in the recitals hereto.

“DIP Credit Facility Obligations” means the “Obligations” as defined in the DIP Credit Agreement.

“Disclosed Matter” means the existence or occurrence of any matter which has been disclosed by Borrower in any filing made by Borrower with the Securities and Exchange Commission prior to the Closing Date and after December 31, 2007 (including disclosures regarding financial performance or condition as set forth in any Form 10-K or Form 10-Q during such period); provided , that no matter shall constitute a “Disclosed Matter” to the extent it shall prove to be, or shall become, materially more adverse to Borrower and its Subsidiaries taken as a whole or to the Lenders than it would have reasonably appeared to be on the basis of the disclosure contained in any of the documents referred to above in this definition.

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“ Disqualified Equity Interests ” means any Equity Interest which, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (i) matures or is mandatorily redeemable (other than solely for Equity Interests which are not otherwise Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise, (ii) is redeemable at the option of the holder thereof (other than solely for Equity Interests which are not otherwise Disqualified Equity Interests), in whole or in part, (iii) provides for the scheduled payments or dividends in cash, or (iv) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Term Loan Maturity Date.

“Dollars” and the sign “$” mean the lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia.

“Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any Related Fund (any two or more Related Funds being treated as a single Eligible Assignee for all purposes hereof), and (ii) any commercial bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buys loans; provided , neither Borrower nor any of its Subsidiaries shall be an Eligible Assignee (except as otherwise provided in Section 10.6(k)).

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed by, Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates.

“Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

“Environmental Laws” means any and all current or future foreign or domestic, federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters, including those relating to any Hazardous Materials Activity; (ii) the generation, use, storage, transportation or disposal of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to Borrower or any of its Subsidiaries or any Facility.

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“Equity Interests” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

“ERISA Affiliate” means, as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of Borrower or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of Borrower or any such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of Borrower or such Subsidiary and with respect to liabilities arising after such period for which Borrower or such Subsidiary could be liable under the Internal Revenue Code or ERISA.

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to Borrower, any of its Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefore, or the receipt by Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the imposition on Borrower, any of its Subsidiaries or

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any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

“Eurodollar Rate Loan” means a Loan bearing interest at a rate determined by reference to the Adjusted Eurodollar Rate.

“Event of Default” means each of the conditions or events set forth in Section 8.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

“Excluded Properties” means the properties located at 404 Third Avenue, NW, Aliceville, Alabama and 1311 Woodmount, Tuscumbie, Alabama, collectively.

“Existing First Lien Credit Agreement” as defined in the recitals hereto.

“Facility” means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Borrower or any of its Subsidiaries or any of their respective predecessors or Affiliates.

“Fair Share” as defined in Section 7.2.

“Fair Share Contribution Amount” as defined in Section 7.2.

“Federal Funds Effective Rate” means for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided , (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent, in its capacity as a Lender, on such day on such transactions as determined by Administrative Agent.

“Financial Officer Certification” means, with respect to the financial statements for which such certification is required, the certification of the chief financial officer or (if such

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officer has been duly appointed in accordance with the Organizational Documents of Borrower) the chief accounting officer of Borrower that such financial statements fairly present, in all material respects, the financial condition of Borrower and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments.

“First Priority” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is the only Lien to which such Collateral is subject, other than any Permitted Lien.

“Fiscal Quarter” means each 13 week period after the end of the Fiscal Year except the last period in Fiscal Year 2007 and in Fiscal Year 2012, which shall be a 14 week period.

“Fiscal Year” means any 52 week period ending on the first Sunday following December 30, except for 2007 and 2012, respectively, which shall be a 53 week period ending January 6, 2008 and January 6, 2013, respectively (as set forth in Schedule 1A hereto); references to a Fiscal Year with a number corresponding to any calendar year ( e.g. , the “ 2007 Fiscal Year ”) refer to the Fiscal Year ending on the first Sunday following December 30 of such calendar year.

“Flood Hazard Property” means any Real Estate Asset subject to a mortgage in favor of Joint First Lien Collateral Agent, for the benefit of the Secured Parties, and located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Funding Default” as defined in Section 2.23.

“Funding Guarantors” as defined in Section 7.2.

“Funding Notice” means a notice substantially in the form of Exhibit A-1.

“GAAP” means, subject to the limitations on the application thereof set forth in Section 1.2, United States generally accepted accounting principles in effect as of the date of determination thereof.

“Game Crazy” means the Borrower’s business, operations and locations, including www.gamecrazy.com, which, taken together, constitutes the Borrower’s “Game Crazy” business segment, and shall include all Equity Interests of any Subsidiary owning Game Crazy assets and properties and the assets and properties (tangible and intangible, real and personal) related to, or used in connection with, such segment. The “Game Crazy” segment includes the business, operations and locations within Hollywood Video stores as well as free-standing locations.

“Game Crazy IPO” means any underwritten public offering by Borrower of its and any other Credit Party’s common Equity Interests in a Subsidiary formed to hold all the

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Game Crazy assets and properties pursuant to a registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act.

“Governmental Acts” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority.

“Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity, officer or examiner exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

“Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.

“Grantor” as defined in the Pledge and Security Agreement.

“GSCP” as defined in the preamble.

“Guaranteed Obligations” as defined in Section 7.1.

“Guarantor” means each of Borrower and each Domestic Subsidiary of Borrower (including the Real Estate Guarantors) and, at the election of Borrower and upon compliance with Section 5.10, Movie Gallery Canada.

“Guarantor Subsidiary” means each Guarantor other than Borrower.

“Guaranty” means the guaranty of each Guarantor set forth in Section 7.

“Hazardous Materials” means any chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority or which may or could pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor or outdoor environment.

“Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

“Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement entered into with a Lender Counterparty and satisfactory to Administrative Agent.

“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to any Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow.

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“Historical Financial Statements” means as of the Closing Date, (i) the audited financial statements of Borrower and its Subsidiaries, for the Fiscal Years ended January 1, 2006 and December 31, 2006, consisting of balance sheets and the related consolidated statements of operations, stockholders’ equity and cash flows for such Fiscal Years, (ii) the unaudited financial statements of Borrower and its Subsidiaries as at the most recent Fiscal Quarter ending 45 days or more prior to the Closing Date, consisting of a balance sheet and the related consolidated statements of operations, stockholders’ equity and cash flows for the three-, six-or nine- fiscal month period, as applicable, ending on such date, and (iii) the unaudited financial statements of Borrower and its Subsidiaries as of the most recent fiscal month ending 30 days or more prior to the Closing Date, consisting of a balance sheet and related consolidated statements of operations, stockholders’ equity and cash flows for such month; and, in the case of clauses (i), (ii) and (iii), certified by the chief financial officer of Borrower that they fairly present, in all material respects, the financial condition of Borrower and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments.

“Inactive Entities” means (a) the following entities in which Movie Gallery US, LLC, a Guarantor, has an ownership interest as of the Closing Date: DVDStation, Inc. and Echo, LLC; and (b) the following entity in which Borrower and Movie Gallery US, LLC, a Guarantor, have an ownership interest as of the Closing Date: Movie Gallery Mexico Inc., S. de R.L. de C.V.

“Increased-Cost Lenders” as defined in Section 2.24.

“Indebtedness” , as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money; (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA), which purchase price is (a) due more than six months from the date of incurrence of the obligation in respect thereof or (b) evidenced by a note or similar written instrument; (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; (vi) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (vii) Disqualified Equity Interests, (viii) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another; (ix) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof; (x) any liability of such Person for an obligation of another through any agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise

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acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (b) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (a) or (b) of this clause (x), the primary purpose or intent thereof is as described in clause (ix) above; and (xi) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including any Interest Rate Agreement and Currency Agreement, whether entered into for hedging or speculative purposes; provided , in no event shall (x) obligations under any Interest Rate Agreement and any Currency Agreement be deemed “Indebtedness” for any purpose under Section 6.7 and (y)(A) deferred compensation arrangements or, (B) severance obligations payable over time be deemed to be “Indebtedness” hereunder.

“Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses, damages (including natural resource damages), penalties, claims (including Environmental Claims), actions, judgments, suits, costs (including the costs of any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary to remove, remediate, clean up or abate any Hazardous Materials Activity), expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding or hearing commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto (it being agreed that, such counsel fees and expenses shall be limited to one primary counsel, and any additional special and local counsel in each appropriate jurisdiction, for the Indemnitees, except in the case of actual or potential conflicts of interest between or among the Indemnitees), and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of (i) this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including the Lenders’ agreement to make Credit Extensions, Synthetic LC Issuing Bank’s agreement to issue Synthetic Letters of Credit or the use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty)); (ii) the statements contained in the commitment letter delivered by any Lender to Borrower with respect to the transactions contemplated by this Agreement; or (iii) any Environmental Claim or any Hazardous Materials Activity relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, or practice of Borrower or any of its Subsidiaries.

“Indemnitee” as defined in Section 10.3.

“Installment” as defined in Section 2.13.

“Intellectual Property” as defined in the Pledge and Security Agreement.

“Intellectual Property Asset” means, at the time of determination, any interest (fee, license or otherwise) then owned by any Credit Party in any Intellectual Property.

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“Intellectual Property Security Agreements” has the meaning assigned to that term in the Pledge and Security Agreement.

“Intercompany Note” means a promissory note substantially in the form of Exhibit L evidencing Indebtedness owed among the Credit Parties and their Subsidiaries.

“ Intercreditor Agreement ” means that certain Amended and Restated Intercreditor Agreement, dated as of March 8, 2007, as amended and restated as of the Closing Date, among the Joint First Lien Collateral Agent, Borrower and the Second Lien Collateral Agent.

“Interest Coverage Ratio” means the ratio as of the last day of any Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four Fiscal Quarter period then ended to (ii) Consolidated Interest Expense for such four Fiscal Quarter period.

“Interest Payment Date” means with respect to (i) any Loan that is a Base Rate Loan, each March 31, June 30, September 30 and December 31 of each year, commencing on the first such date to occur after the Closing Date and the final maturity date of such Loan; and (ii) any Loan that is a Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan; provided , in the case of each Interest Period of longer than three months “Interest Payment Date” shall also include each date that is three months, or an integral multiple thereof, after the commencement of such Interest Period.

“Interest Period” means, in connection with a Eurodollar Rate Loan, an interest period of one-, two-, three- or six-months, as selected by Borrower in the applicable Funding Notice or Conversion/Continuation Notice, (i) initially, commencing on the Credit Date or Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter, commencing on the day on which the immediately preceding Interest Period expires; provided , (a) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day unless no further Business Day occurs in such month, in which case such Interest Period shall expire on the immediately preceding Business Day; (b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c), of this definition, end on the last Business Day of a calendar month; and (c) no Interest Period with respect to any portion of the Term Loans shall extend beyond the Term Loan Maturity Date.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is for the purpose of hedging the interest rate exposure associated with Borrower’s and its Subsidiaries’ operations and not for speculative purposes.

“Interest Rate Determination Date” means, with respect to any Interest Period, the date that is two Business Days prior to the first day of such Interest Period.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

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“Investment” means (i) any direct or indirect purchase or other acquisition by Borrower or any of its Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person (other than a Guarantor Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by any Subsidiary of Borrower from any Person (other than Borrower or any Guarantor Subsidiary), of any Equity Interests of such Person; and (iii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contributions by Borrower or any of its Subsidiaries to any other Person (other than Borrower or any Guarantor Subsidiary), including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.

“Issuance Notice” means an Issuance Notice substantially in the form of Exhibit A-3.

“Joint First Lien Collateral Agent” means the “Joint First Lien Collateral Agent” as defined in the Collateral Agency Agreement.

“Joint Venture” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; provided , in no event shall any corporate Subsidiary of any Person be considered to be a Joint Venture to which such Person is a party.

“Kiosk Program” means the installation of movie rental kiosks in various retail and other locations.

“Landlord Personal Property Collateral Access Agreement” means a Landlord Waiver and Consent Agreement substantially in the form of Exhibit K with such amendments, restatements or modifications as may be approved by Collateral Agent.

“Leasehold Property” means any leasehold interest of any Credit Party as lessee under any lease of real property.

“Lender” means each “Lender” (as such term is defined under the Existing First Lien Credit Agreement) that is a party to the Existing First Lien Credit Agreement on the Closing Date, and any other Person that becomes a party hereto pursuant to an Assignment Agreement.

“Lender Counterparty” means each Lender or any Affiliate of a Lender counterparty to a Hedge Agreement (including any Person who is a Lender (and any Affiliate thereof) as of the Closing Date but subsequently, whether before or after entering into a Hedge Agreement, ceases to be a Lender and any Person who enters into a Hedge Agreement in connection with the transactions contemplated by the Credit Documents prior to the Closing Date and is a Lender as of the Closing Date), including each such Affiliate that enters into a joinder agreement with Joint First Lien Collateral Agent and the Administrative Agent.

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“Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter of (i) Total First Lien Debt as of such day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period ending on such date.

“Lien” means (i) any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease or license in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing and (ii) in the case of Securities, any purchase option, call or similar right of a third party with respect to such Securities.

“Loan” means a Term Loan.

“Margin Stock” as defined in Regulation U of the Board of Governors as in effect from time to time.

“Material Adverse Effect” means a material adverse effect on and/or material adverse developments with respect to (i) the business, operations, properties, assets or condition (financial or otherwise) or prospects of Borrower and its Subsidiaries taken as a whole; (ii) the ability of any Credit Party to fully and timely perform its Obligations; (iii) the legality, validity, binding effect or enforceability against a Credit Party of a Credit Document to which it is a party; or (iv) the rights, remedies and benefits available to, or conferred upon, any Agent and any Lender or any Secured Party under any Credit Document; provided , that no Disclosed Matter shall constitute a Material Adverse Effect and (B) the occurrence of any matters described on Schedule 4.7 hereto shall not constitute a Material Adverse Effect.

“Material Contract” means any contract or other arrangement to which Borrower or any of its Subsidiaries is a party (other than the Credit Documents) for which breach, nonperformance, cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect.

“Material Real Estate Asset” means (i) (a) any fee-owned Real Estate Asset having a fair market value in excess of $250,000 as of the date of the acquisition thereof and (b) all Leasehold Properties other than those with respect to which the aggregate payments under the remaining term of the lease are less than $750,000 or (ii) any Real Estate Asset that the Requisite Lenders have determined is material to the business, operations, properties, assets, condition (financial or otherwise) or prospects of Borrower or any Subsidiary of the Borrower.

“Moody’s” means Moody’s Investor Services, Inc.

“Mortgage” means a Mortgage substantially in the form of Exhibit J, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Movie Gallery Canada” means Movie Gallery Canada, Inc., a wholly-owned Subsidiary of Borrower organized under the laws of the Province of New Brunswick.

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.

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“NAIC” means The National Association of Insurance Commissioners, and any successor thereto.

“Narrative Report” means (a) with respect to the financial statements delivered pursuant to Section 5.1(b) and Section 5.1(c), a narrative report describing the operations of Borrower and its Subsidiaries which report meets the requirements of Item 303 of Regulation S-K promulgated under the Securities Act for the applicable Fiscal Quarter or Fiscal Year and for the period from the beginning of the then current Fiscal Year to the end of such period to which such financial statements relate, and (b) with respect to the financial statements delivered pursuant to Section 5.1(a), a narrative report prepared on a basis consistent with, and setting forth the same types of information as set forth in, the monthly financial statement reporting package delivered to Administrative Agent prior to the Closing Date.

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal to: (i) Cash payments (including any Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received by Borrower or any of its Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs incurred in connection with such Asset Sale, including (a) income or gains taxes payable by the seller as a result of any gain recognized in connection with such Asset Sale, (b) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such Asset Sale and (c) a reasonable reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of such Asset Sale undertaken by Borrower or any of its Subsidiaries in connection with such Asset Sale.

“Net Insurance/Condemnation Proceeds” means an amount equal to: (i) any Cash payments or proceeds received by Borrower or any of its Subsidiaries (a) under any casualty insurance policy in respect of a covered loss thereunder or (b) as a result of the taking of any assets of Borrower or any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (ii) (a) any actual and reasonable costs incurred by Borrower or any of its Subsidiaries in connection with the adjustment or settlement of any claims of Borrower or such Subsidiary in respect thereof, and (b) any bona fide reasonable direct costs incurred in connection with any sale of such assets as referred to in clause (i)(b) of this definition, including income taxes payable as a result of any gain recognized in connection therewith.

“Nonpublic Information” means information which has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD.

“Non-Core Assets” means the following assets of the Borrower and its Subsidiaries which are not essential or material to the conduct of the businesses of the Borrower and its Subsidiaries: (i) aircraft of the Borrower and its Subsidiaries, (ii) the “Reel.com” assets, (iii) the “Rack Division” assets, (iv) the iBlast division assets, (v) the assets and/or Equity Interests of MG Automation, Inc. and MG Digital, Inc., (vi) the “Movie Beam” assets , (vii) owned real estate on the Closing Date and (viii) other assets which are not essential or material

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to the conduct of the businesses of the Borrower and its Subsidiaries to the extent that the value of each such asset, individually, does not exceed $100,000, and the value of all such assets, in the aggregate, does not exceed $500,000 in any Fiscal Year.

“Non-US Lender” as defined in Section 2.21(c).

“Note” means a Term Loan Note.

“Notice” means a Funding Notice, an Issuance Notice, or a Conversion/ Continuation Notice.

“Obligations” means all obligations of every nature of each Credit Party, including obligations from time to time owed to the Agents (including former Agents), Synthetic LC Issuing Bank, Synthetic LC Depositary Bank, the Lenders or any of them and Lender Counterparties, under any Credit Document or Hedge Agreement, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under Synthetic Letters of Credit, payments for early termination of Hedge Agreements, fees, expenses, indemnification or otherwise.

“Obligee Guarantor” as defined in Section 7.7.

“Organizational Documents” means (i) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws, as amended, (ii) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, and (iv) with respect to any limited liability company, its articles of organization, as amended, and its operating agreement, as amended. In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.

“Patriot Act” as defined in Section 3.1(u).

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.

“Permitted Acquisition” means any acquisition by Borrower or any of its wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of the assets of, all of the Equity Interests of, or a business line or unit or a division of, any Person; provided ,

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“Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

“Plan” as defined in the recitals hereto.

“Plan Effective Date” means the “Effective Date” as defined in the Plan.

“Platform” as defined in Section 5.1(p).

“Pledge and Security Agreement” means the Amended and Restated Pledge and Security Agreement, dated as of March 8, 2007, as amended and restated as of the Closing Date, to be executed by Borrower and each Guarantor substantially in the form of Exhibit I, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Prime Rate” means the rate of interest quoted in The Wall Street Journal , Money Rates Section as the Prime Rate (currently defined as the base rate on corporate loans posted by at least 75% of the nation’s thirty (30) largest banks), as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Agent or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

“Principal Office” means, for each of Administrative Agent, Collateral Agent, Synthetic LC Agent and Synthetic LC Issuing Bank, such Person’s “Principal Office” as set forth on Appendix A, or such other office or office of a third party or sub-agent, as appropriate, as such Person may from time to time designate in writing to Borrower, Administrative Agent and each Lender.

“Projections” as defined in Section 4.8.

“Pro Rata Share” means (i) with respect to all payments, computations and other matters relating to the Term Loan of any Lender, the percentage obtained by dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate Term Loan Exposure of all Lenders; and (ii) with respect to all payments, computations and other matters relating to the participations in Synthetic Letters of Credit, the Synthetic LC Deposits or the Synthetic LC Disbursements, the percentage obtained by dividing (a) the Synthetic LC Deposit of that Lender by (b) the aggregate Synthetic LC Deposits of all Lenders. For all other purposes with respect to each Lender, “Pro Rata Share” means the percentage obtained by dividing (A) an amount equal to the sum of the Term Loan Exposure and the Synthetic LC Exposure of that Lender, by (B) an amount equal to the sum of the aggregate Term Loan Exposure and the aggregate Synthetic LC Exposure of all Lenders.

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“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Credit Party in any real property.

“Real Estate Guarantors” means M.G.A. Realty I, LLC and MG Automation LLC, each individually a Real Estate Guarantor, together with their successors and assigns, including any trustee or other fiduciary hereafter appointed as legal representative on behalf of such person or on behalf of any such successor or assign.

“Register” as defined in Section 2.8(b).

“Regulation D” means Regulation D of the Board of Governors, as in effect from time to time.

“Regulation FD” means Regulation FD as promulgated by the US Securities and Exchange Commission under the Securities Act and Exchange Act as in effect from time to time.

“Related Fund” means, with respect to any Lender that is an investment fund, any other investment fund that invests in commercial loans and that is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.

“Rental Items” means video cassette tapes, digital versatile disc (DVD) or video discs (regardless of format), video games, audiotapes and related equipment to the extent that such items were acquired by Borrower or any of its Subsidiaries for sale or rental to their customers or are held by Borrower or such Subsidiary for sale or rental to their customers.

“Replacement Lender” as defined in Section 2.24.

“Requisite Lenders” means one or more Lenders having or holding Term Loan Exposure and/or Synthetic LC Exposure and representing more than 50% of the sum of (i) the aggregate Term Loan Exposure of all such Lenders and (ii) the aggregate Synthetic LC Exposure of all such Lenders. For purposes of this definition, in respect of Lenders that are Restricted Sponsor Affiliates, the aggregate amount of Term Loan Exposure and/or Synthetic LC Exposure ( “Voting Power Determinants” ) shall be determined by including all Voting Power Determinants held or beneficially owned by Restricted Sponsor Affiliates so long as the aggregate Voting Power Determinants held or beneficially owned by all Restricted Sponsor Affiliates does not exceed 15% of all Voting Power Determinants. If the aggregate Voting Power Determinants held or beneficially owned by all Restricted Sponsor Affiliates represent in excess of 15% of the aggregate Voting Power Determinants held or beneficially owned by all

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Lenders (including all Restricted Sponsor Affiliates), then, for purposes solely of this definition, (x) the aggregate Voting Power Determinants held or beneficially owned by all Restricted Sponsor Affiliates shall be ratably reduced so as to equal, in the aggregate, 15% of the aggregate Voting Power Determinants and (y) the Voting Power Determinants held or beneficially owned by all Lenders other than Restricted Sponsor Affiliates shall be ratably increased so as to equal, in the aggregate, 85% of the aggregate Voting Power Determinants. The foregoing limitations regarding Voting Power Determinants shall not apply in respect to voting on a plan of reorganization for the Borrower, or in respect to, consenting to, supporting or opposing a sale of all or substantially all of the assets of the Credit Parties taken as a whole in one or more series of related transactions, in each case under Chapter 11 of the Bankruptcy Code (following a Default or Event of Default described in Section 8.1(f) or 8.1(g)) if (i) such plan of reorganization, or such sale, provides that the Sponsor Affiliates receive less than 5% of the value of the Equity Interests then owned in the Borrower in exchange for the Equity Interests in Borrower, or less than 5% of the proceeds of such sale, and (ii) at such time, such Sponsor Affiliates do not then own (beneficially or otherwise) any Second Lien Term Loans or other Indebtedness under the Second Lien Credit Agreement (otherwise, the Voting Power Determinants shall remain in effect).

“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of Borrower now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to the holders of that class; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Borrower now or hereafter outstanding; (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of Borrower now or hereafter outstanding; and (iv) any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment, or any other payment (other than principal or interest), with respect to the Indebtedness outstanding under the Second Lien Credit Agreement, any Indebtedness under any Term Loan Refinancing Indebtedness, and any other Indebtedness which is subordinated in right of payment to the Obligations.

“Restricted Sponsor Affiliates” means the Sponsor Affiliates, but only at such times that the Sponsor Affiliates (i) have, in the aggregate, ownership (beneficial or otherwise) of 20% or more of the voting and/or economic interest in the Equity Interests of Borrower, or (ii) have, individually or in the aggregate, the power to direct or cause the direction of the management and policies of Borrower or any of the Credit Parties, whether through the ownership of voting securities or by contract or otherwise.

“Revolver Refinancing Indebtedness” means a refinancing, renewal or extension of all of the Revolving Loans, commitment and other revolving credit exposure under the Revolving Credit Agreement on the following terms: (A) such refinancing, renewal or extension shall not result in 50% or more of the Indebtedness and commitment subject to any such refinancing, renewal or extension being held by an Affiliate of any Credit Party, (B) the Indebtedness and commitment subject to any such refinancing, renewal or extension is in an aggregate principal and commitment amount not greater than the aggregate principal and commitment amount of the Revolving Loans and other revolving credit exposure and

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commitments under the Revolving Credit Agreement being renewed, refinanced or extended, (C) the Indebtedness subject to any such refinancing, renewal or extension shall have a final maturity which is no earlier than, and does not require any scheduled amortization or other scheduled payments of principal prior to, the three year anniversary of the Closing Date, (D) the cash yield or cash interest on the Indebtedness shall not exceed (i) LIBOR plus 6%, plus (ii) 2% in upfront fees on the aggregate principal and commitment amount of the Revolving Loans and other revolving credit exposure and commitments under the Revolving Credit Agreement being renewed, refinanced or extended (provided, that if the upfront fee is greater than 2% then the excess amount thereof shall be amortized through final maturity and be applied to reduce the interest rate margin set forth in subclause (D)(i)), (E) the covenants, events of default, subordination and other provisions thereof (including any guarantees thereof) shall be, in the aggregate, no less favorable to the Borrower and to the Lenders than those contained in the Revolving Credit Documents, and the lenders shall agree to be bound by the terms of the Intercreditor Agreement and Collateral Agency Agreement and (F) no Default or Event of Default shall have occurred and be continuing or result therefrom.

“Revolving Administrative Agent” means the “Administrative Agent” as defined in the Revolving Credit Agreement.

“Revolving Credit Agreement” means the Revolving Credit and Guaranty Agreement, dated as of the Closing Date, among Borrower, certain Subsidiaries of Borrower, the Revolving Administrative Agent, and the other agents and lenders party thereto, as such may be amended, restated, supplemented or otherwise modified from time to time in accordance with this Agreement.

“Revolving Credit Documents” means the “Credit Documents” as defined in the Revolving Credit Agreement.

“Revolving Loan” means a revolving loan made under the Revolving Credit Agreement.

“Revolving Letter of Credit” means a commercial or standby letter of credit issued or to be issued under the Revolving Credit Agreement.

“Revolving Commitment” means the commitment of a lender under the Revolving Credit Agreement to make or otherwise fund any Revolving Loan and to acquire participations in Revolving Letters of Credit thereunder and “Revolving Commitments” means such commitments of all such lenders thereunder in the aggregate.

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill Corporation.

“Seasonal Overadvance Facility” means a letter of credit procurement facility provided by a Sponsor Affiliate on the following terms: (A) the Indebtedness or other obligations thereunder shall be unsecured, (B) the letters of credit issued under the facility shall be used only for the purposes described on Schedule 1B hereto, (C) the cash yield or cash interest on the Indebtedness shall not exceed the rate applicable for Loans under this Agreement at such time, (D) the covenants, events of default, subordination and other provisions thereof (including any

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guarantees thereof) shall be as set forth on Schedule 1B hereto and shall be, in the aggregate, no less favorable to the Borrower and to the Lenders than those contained in the Second Lien Credit Documents as currently in effect and (E) no Default or Event of Default shall have occurred and be continuing or result therefrom.

“Second Lien Collateral Agent” means the “Collateral Agent” as defined in the Second Lien Credit Agreement.

“Second Lien Credit Agreement” means the Amended and Restated Second Lien Term Loan and Guaranty Agreement, dated as of March 8, 2007, as amended and restated as of the Closing Date, among Borrower, certain Subsidiaries of Borrower, and the agents and lenders party thereto, as such may be amended, restated, supplemented or otherwise modified from time to time in accordance with this Agreement.

“Second Lien Credit Documents” means the “Credit Documents” as defined in the Second Lien Credit Agreement.

“Second Lien Term Loans” means term loans in an aggregate principal amount of $117,141,030 outstanding on the Closing Date under the Second Lien Credit Agreement.

“Secured Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter of (i) Total Secured Debt as of such day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period ending on such date.

“Secured Parties” has the meaning assigned to that term in the Pledge and Security Agreement.

“Securities” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

“Solvency Certificate” means a Solvency Certificate of the chief financial officer of Borrower substantially in the form of Exhibit G-2.

“Solvent” means, with respect to any Credit Party, that as of the date of determination, determined on a going concern basis, both (i) (a) the sum of such Credit Party’s debt (including contingent liabilities) does not exceed the present fair saleable value of such Credit Party’s present assets; (b) such Credit Party’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date and reflected in the Projections or with respect to any transaction contemplated or undertaken after the Closing Date; and (c) such Person has not incurred and does not intend to incur, or believe (nor should it reasonably believe)

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that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (ii) such Person is “solvent” within the meaning given that term and similar terms under the Bankruptcy Code and applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, including such Credit Party’s rights to contribution, indemnification and reimbursement, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

“Sponsor Affiliates” means Aspen Advisors, Condor Partners, Sopris Capital Advisors LLC, Sopris Capital Management and Trendex Capital Management and their respective Affiliates.

“Sub-Account” as defined in Section 2.5(i).

“Subject Transaction” as defined in Section 6.7(f).

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided , in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.

“Synthetic LC Agent” means Wachovia as agent on behalf of Synthetic LC Issuing Bank and Synthetic LC Depositary Bank hereunder with respect to the issuance of the Synthetic Letters of Credit, together with its permitted successors and assigns in such capacity or any successor or replacement Synthetic LC Agent hereunder.

“Synthetic LC Commitment” means the commitment of a Lender to acquire participations in Synthetic Letters of Credit hereunder and “Synthetic LC Commitments” means such commitments of all Lenders. The aggregate amount of the Synthetic LC Commitments as of the Closing Date is $23,500,000.

“Synthetic LC Commitment Period” means the period from the Closing Date to but excluding the Synthetic LC Commitment Termination Date.

“Synthetic LC Commitment Termination Date” means the earliest to occur of (i) May 20, 2009, with respect to Wachovia in its capacities as Synthetic LC Issuing Bank, Synthetic LC Agent and Synthetic LC Depository Bank and May 20, 2012 with respect to replacement Synthetic LC Issuing Bank, Synthetic LC Agent and Synthetic LC Depositary Bank appointed after Wachovia has resigned on May 20, 2009 pursuant to Section 9.7(e); (ii) the date that is ninety (90) days following the date the aggregate principal amount of the Term Loans

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hereunder do not exceed $20,000,000, (iii) the date the Synthetic LC Commitments are permanently reduced to zero pursuant to Section 2.14(b), or (iv) the date of the termination of the Synthetic LC Commitments pursuant to Section 8.1.

“Synthetic LC Deposit” means, with respect to each Synthetic LC Lender, the amount of such Synthetic LC Lender’s Synthetic LC Commitment that such Synthetic LC Lender shall deposit in such Synthetic LC Lender’s Sub-Account with Administrative Agent on or before the Closing Date, and that amount shall in turn be deposited by Administrative Agent in the Synthetic LC Deposit Account on or before the Closing Date, as such amount may be (a) reduced from time to time as a result of withdrawals by the Synthetic LC Agent, on behalf of the Synthetic LC Issuing Bank, from the Synthetic LC Deposit Account and debited by the Administrative Agent to the Sub-Account of each Synthetic LC Lender or reinstated from time to time as a result of payments by Borrower to Administrative Agent, which payments shall be remitted to Synthetic LC Agent and deposited into the Synthetic LC Deposit Account and credited by Administrative Agent to the Sub-Account of each such Synthetic LC Lender pursuant to Section 2.5, and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.6 and, “ Synthetic LC Deposits ” mean such deposits of all Synthetic LC Lenders.

“Synthetic LC Deposit Account” as defined in Section 2.5(i).

“Synthetic LC Deposit Return” as defined in Section 2.5(m).

“Synthetic LC Depositary Bank” shall mean Wachovia or any successor or replacement Synthetic LC Depositary Bank hereunder .

“Synthetic LC Disbursement” means a payment made by Synthetic LC Issuing Bank pursuant to a Synthetic Letter of Credit or an amount otherwise due and owing to Synthetic LC Agent in respect of the Synthetic Letter of Credit facility hereunder.

“Synthetic LC Exposure” means, with respect to any Lender, as of any date of determination, such Lender’s Pro Rata Share of the aggregate Synthetic LC Deposits and Synthetic LC Usage (other than the portion of such Synthetic LC Usage represented by amounts available for drawing, but not yet drawn, under Synthetic Letters of Credit).

“Synthetic LC Issuing Bank” means Wachovia as Synthetic LC Issuing Bank hereunder with respect to Synthetic Letters of Credit, together with its permitted successors and assigns in such capacity, or any successor or replacement Synthetic LC Issuing Bank hereunder.

“Synthetic LC Lender” means a Lender having an interest in the Synthetic LC Deposit Account or the Synthetic LC Commitment.

“Synthetic LC Reimbursement Date” as defined in Section 2.5(d).

“Synthetic LC Usage” means, as of any date of determination, the sum of (i) the maximum aggregate amount which is, or at any time thereafter may become, available for drawing under all Synthetic Letters of Credit then outstanding, and (ii) the aggregate amount of all Synthetic LC Disbursements not theretofore reimbursed by or on behalf of Borrower.

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“Synthetic Letter of Credit Limit” means, for so long as Wachovia shall be the Synthetic LC Issuing Bank, $21,900,000, and at all other times, $23,500,000, in all cases as may be reduced from time to time by Borrower in connection with a reduction of the Synthetic LC Commitments.

“Synthetic Letter of Credit” means a commercial or standby letter of credit issued or to be issued by Synthetic LC Issuing Bank under the Synthetic LC Commitment pursuant to this Agreement, and shall include, without limitation, those letters of credit issued under the Existing First Lien Credit Agreement identified on Schedule 3 hereto.

“Tax” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed; provided , “Tax on the overall net income” of a Person shall be construed as a reference to a tax imposed by the jurisdiction in which that Person is organized or in which that Person’s applicable principal office (and/or, in the case of a Lender, its lending office) is located or in which that Person (and/or, in the case of a Lender, its lending office) is deemed to be doing business on all or part of the net income, profits or gains (whether worldwide, or only insofar as such income, profits or gains are considered to arise in or to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in the case of a Lender, its applicable lending office).

“Term Lender Group” means a group of one or more Lenders, other than Lenders that are Restricted Sponsor Affiliates, having or holding Term Loan Exposure and representing more than 25% of the aggregate Term Loan Exposure of all Lenders.

“Term Loan” means a Term Loan made by a Lender to Borrower pursuant to Section 2.1(a).

“Term Loan Commitment” means the commitment of a Lender to make or otherwise fund a Term Loan and “Term Loan Commitments” means such commitments of all Lenders in the aggregate. The aggregate amount of the Term Loan Commitments as of the Closing Date is $602,988,750 plus payment-in-kind interest and other principal increases hereunder.

“Term Loan Exposure” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the Term Loans of such Lender; provided , at any time prior to the making of the Term Loans, the Term Loan Exposure of any Lender shall be equal to such Lender’s Term Loan Commitment.

“Term Loan Maturity Date” means the earliest to occur of (i) May 20, 2012, (ii) the date that is ninety (90) days following the date the aggregate principal amount of the Term Loans hereunder do not exceed $20,000,000, or (iii) the date that all Term Loans become due and payable in full hereunder, whether by acceleration or otherwise.

“Term Loan Note” means a promissory note in the form of Exhibit B, as it may be amended, restated, supplemented or otherwise modified from time to time.

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“Term Loan Refinancing Indebtedness” means Indebtedness incurred solely in order to repay all or any portion of the Term Loans hereunder on the following terms: (A) the Indebtedness thereunder shall be unsecured and shall have a final maturity which is later than, and does not require any scheduled amortization or other scheduled payments of principal prior to, the five year anniversary of the Closing Date, (B) the proceeds under the facility shall be used only to repay the Term Loans hereunder, (C) the cash yield or cash interest on the Indebtedness shall not exceed 110% of applicable rate for Loans under this Agreement at such time, (D) the covenants, events of default, subordination and other provisions thereof (including any guarantees thereof) shall be reasonably satisfactory to the Administrative Agent and shall be, in the aggregate, no less favorable to the Borrower and to the Lenders than those contained in the Second Lien Credit Documents (provided that such provisions shall not include financial covenants, and shall be subject to automatic amendment to conform to any amendments made to the Second Lien Credit Documents) and (E) no Default or Event of Default shall have occurred and be continuing or result therefrom.

“Terminated Lender” as defined in Section 2.24.

“Title Policy” as defined in Section 3.1(g).

“Total First Lien Debt” means, as at any date of determination, Indebtedness with respect to Loans plus Synthetic LC Usage (only to the extent drawn and not reimbursed) plus Indebtedness with respect to Revolving Loans (minus the proceeds of Revolving Loans used to secure issued and outstanding Additional Letters of Credit pursuant to Section 6.2(s)) and Revolving Letters of Credit (only to the extent drawn and not reimbursed) plus Indebtedness with respect to Additional Letters of Credit (if secured with the proceeds of Revolving Loans pursuant to Section 6.2(s)).

“Total Secured Debt” means, as at any date of determination, Indebtedness with respect to Loans plus Synthetic LC Usage (only to the extent drawn and not reimbursed) plus Indebtedness with respect to Revolving Loans (minus the proceeds of Revolving Loans used to secure issued and outstanding Additional Letters of Credit pursuant to Section 6.2(s)) and Revolving Letters of Credit (only to the extent drawn and not reimbursed) plus Indebtedness with respect to Second Lien Term Loans plus Indebtedness with respect to Additional Letters of Credit (if secured with the proceeds of Revolving Loans pursuant to Section 6.2(s)) plus any other Indebtedness of the Borrower and any of its Subsidiaries secured by a Lien.

“Type of Loan” means either a Base Rate Loan or a Eurodollar Rate Loan.

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

“ U.S. Lender ” as defined in Section 2.21(c).

“ Wachovia ” means Wachovia Bank, National Association, a national banking association, and its successors and assigns.

1.2. Accounting Terms Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with

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GAAP. Financial statements and other information required to be delivered by Borrower to Lenders pursuant to Section 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in Section 5.1(e), if applicable). Subject to the foregoing, calculations in connection with the definitions, covenants and other provisions hereof shall utilize accounting principles and policies in conformity with those used to prepare the Historical Financial Statements. If at any time any change in GAAP (or a change in the application of the policies thereof) would affect the computation of any financial ratio or requirement set forth in any Credit Document, and Borrower or Requisite Lenders shall so request, Administrative Agent, Requisite Lenders and Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of Requisite Lenders), provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and Borrower shall provide to Administrative Agent and Lenders reconciliation statements provided for in Section 5.1(e).

1.3. Interpretation, etc. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided. The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. The terms lease and license shall include sub-lease and sub-license, as applicable.

SECTION 2. LOANS AND SYNTHETIC LETTERS OF CREDIT

2.1. Term Loans.

(a) Loan Commitments . Subject to the terms and conditions hereof, each Lender severally agrees to make Loans to Borrower in an amount equal to such Lender’s Term Loan Commitment. Borrower may make only one borrowing under the Term Loan Commitment. Each Lender’s Term Loan Commitment shall terminate immediately and without further action on the Closing Date after giving effect to the funding of such Lender’s Term Loan Commitment. Any amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed. For the avoidance of doubt, as of the Closing Date the Term Loans have been fully funded and the aggregate unfunded Term Loan Commitments equal $0. Subject to Sections 2.14(a) and 2.15, all amounts owed hereunder with respect to the Term Loans shall be paid in full no later than the Term Loan Maturity Date.

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(b) Borrowing Mechanics for Term Loans .

(i) Borrower shall deliver to Administrative Agent a fully executed Funding Notice no later than (i) one day prior to the Closing Date for Base Rate Loans, and (ii) three days prior to the Closing Date for Eurodollar Rate Loans. Promptly upon receipt by Administrative Agent of such Funding Notice, Administrative Agent shall notify each Lender of the proposed borrowing.

(ii) Each Lender shall make its Term Loan available to Administrative Agent not later than 12:00 p.m. (New York City time) on the Closing Date, by wire transfer of same day funds in Dollars, at the Principal Office designated by Administrative Agent. Upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of the Term Loans available to Borrower on the Closing Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Loans received by Administrative Agent from Lenders to be credited to the account of Borrower at the Principal Office designated by Administrative Agent or to such other account as may be designated in writing to Administrative Agent by Borrower.

2.2. [RESERVED].

2.3. [RESERVED].

2.4. [RESERVED].

2.5. Issuance of Synthetic Letters of Credit and Purchase of Participations Therein.

(a) Synthetic Letters of Credit . During the Synthetic LC Commitment Period, subject to the terms and conditions hereof, Synthetic LC Issuing Bank agrees to issue Synthetic Letters of Credit for the account of Borrower in the aggregate amount up to but not exceeding the aggregate Synthetic Letter of Credit Limit; provided , (i) each Synthetic Letter of Credit shall be denominated in Dollars; (ii) the stated amount of each Synthetic Letter of Credit shall not be less than $50,000 or such lesser amount as is acceptable to Synthetic LC Issuing Bank; (iii) after giving effect to such issuance, in no event shall the Synthetic LC Usage exceed the Synthetic Letter of Credit Limit; (iv) in no event shall any standby Synthetic Letter of Credit issued by Wachovia as Synthetic LC Issuing Bank have an expiration date later than the earlier of (1) the tenth Business Day prior to the Synthetic LC Commitment Termination Date or (2) the date which is one year from the date of issuance of any such standby Synthetic Letter of Credit; and (v) in no event shall any commercial Synthetic Letter of Credit (1) have an expiration date later than the earlier of (A) the tenth Business Day prior to the Synthetic LC Commitment Termination Date and (B) the date which is 180 days from the date of issuance of such commercial Synthetic Letter of Credit or (2) be issued if such commercial Synthetic Letter of Credit is otherwise unacceptable to Synthetic LC Issuing Bank in its reasonable discretion. Subject to the foregoing, Synthetic LC Issuing Bank may agree that a standby Synthetic Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each, unless Synthetic LC Issuing Bank elects not to extend for any such additional period; provided , Synthetic LC Issuing Bank shall not extend any such Synthetic Letter of Credit if it has received written notice that an Event of Default has occurred and is continuing at the time Synthetic LC Issuing Bank must elect to allow such extension.

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(b) Notice of Issuance . Whenever Borrower desires the issuance of a Synthetic Letter of Credit, it shall deliver to Administrative Agent (with a copy to Synthetic LC Agent and Synthetic LC Issuing Bank) an Issuance Notice no later than 12:00 p.m. (New York City time) at least three Business Days (in the case of standby letters of credit) or five Business Days (in the case of commercial letters of credit), or in each case such shorter period as may be agreed to by Synthetic LC Issuing Bank in any particular instance (including in connection with Synthetic Letters of Credit to be issued on the Closing Date), in advance of the proposed date of issuance. Upon satisfaction or waiver of the conditions set forth in Section 3.2, Synthetic LC Issuing Bank shall issue the requested Synthetic Letter of Credit only in accordance with Synthetic LC Issuing Bank’s standard operating procedures. Upon the issuance of any Synthetic Letter of Credit or amendment or modification to a Synthetic Letter of Credit, Synthetic LC Issuing Bank shall promptly notify Administrative Agent (with a copy to Synthetic LC Agent) who shall as soon as practicable notify each Synthetic LC Lender of such issuance, which notice shall be accompanied by a copy of such Synthetic Letter of Credit or amendment or modification to a Synthetic Letter of Credit and the amount of such Lender’s respective participation in such Synthetic Letter of Credit pursuant to Section 2.5(e). Unless the Synthetic LC Issuing Bank has received notice from the Administrative Agent to the contrary, the Synthetic LC Issuing Bank shall be entitled to rely on any certification from Borrower contained in any Issuance Notice to the effect that the conditions precedent to the issuance of any requested Synthetic Letter of Credit have been satisfied in full.

(c) Responsibility of Synthetic LC Issuing Bank With Respect to Requests for Drawings and Payments . In determining whether to honor any drawing under any Synthetic Letter of Credit by the beneficiary thereof, Synthetic LC Issuing Bank shall be responsible only to examine the documents delivered under such Synthetic Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the terms and conditions of such Synthetic Letter of Credit. As between Borrower and Synthetic LC Issuing Bank, Borrower assumes all risks of the acts and omissions of, or misuse of the Synthetic Letters of Credit issued by Synthetic LC Issuing Bank, by the respective beneficiaries of such Synthetic Letters of Credit. In furtherance and not in limitation of the foregoing, Synthetic LC Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Synthetic Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Synthetic Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such Synthetic Letter of Credit to comply fully with any conditions required in order to draw upon such Synthetic Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Synthetic Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Synthetic Letter of Credit of the proceeds of any drawing under such Synthetic Letter of Credit; or (viii) any consequences arising from causes beyond the control of Synthetic LC Issuing Bank, including any Governmental Acts; none of the above shall affect or impair, or prevent the vesting of, any of Synthetic LC Issuing Bank’s rights or powers hereunder.

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Without limiting the foregoing and in furtherance thereof, any action taken or omitted by Synthetic LC Issuing Bank under or in connection with the Synthetic Letters of Credit or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not give rise to any liability on the part of Synthetic LC Issuing Bank to Borrower. Notwithstanding anything to the contrary contained in this Section 2.5(c), Borrower shall retain any and all rights it may have against Synthetic LC Issuing Bank for any liability arising solely out of the gross negligence or willful misconduct of Synthetic LC Issuing Bank as determined by a final, non-appealable order issued by a court of competent jurisdiction.

(d) Reimbursement by Borrower of Amounts Drawn or Paid Under Synthetic Letters of Credit . In the event Synthetic LC Issuing Bank has determined to honor a drawing under a Synthetic Letter of Credit or if Borrower has not paid any Obligations that are due and owing to Synthetic LC Issuing Bank or Synthetic LC Agent, Synthetic LC Agent or Synthetic LC Issuing Bank, as the case may be, shall immediately notify Borrower, Administrative Agent and, if applicable, Synthetic LC Agent, and Borrower shall reimburse such Synthetic LC Disbursement or other amount then due and owing to Synthetic LC Issuing Bank or Synthetic LC Agent, by paying to Synthetic LC Agent on behalf of itself or Synthetic LC Issuing Bank on or before the Business Day immediately following the date of notice to Borrower, Synthetic LC Agent, if applicable, and Administrative Agent (notice delivered after 1 p.m. (New York City time) shall be deemed to be on the next Business Day) of such Synthetic LC Disbursement (the “Synthetic LC Reimbursement Date” ) an amount in Dollars and in same day funds equal to the amount of such Synthetic LC Disbursement. As soon as practicable following receipt by Synthetic LC Agent of any payment from Borrower pursuant to this paragraph in respect of any Synthetic LC Disbursement, Synthetic LC Agent shall distribute such payment to Synthetic LC Issuing Bank or, to the extent payments have been made from the Synthetic LC Deposit Account pursuant to Section 2.5(e) below, to the Synthetic LC Deposit Account for allocation by Administrative Agent among the Sub-Accounts of the Synthetic LC Lenders in accordance with their Pro Rata Shares.

(e) Lenders’ Purchase of Participations in Synthetic Letters of Credit . (i) Immediately upon the issuance of each Synthetic Letter of Credit, each Synthetic LC Lender shall be deemed to have purchased, and hereby agrees to irrevocably purchase, from Synthetic LC Issuing Bank a participation in such Synthetic Letter of Credit and any Synthetic LC Disbursement thereunder in an amount equal to such Lender’s Pro Rata Share (with respect to the Synthetic LC Commitments) of the maximum amount which is or at any time may become available to be drawn thereunder. In the event that Borrower shall fail for any reason to reimburse Synthetic LC Issuing Bank or the Synthetic LC Agent in respect of a Synthetic LC Disbursement as provided in Section 2.5(d), Synthetic LC Issuing Bank or the Synthetic LC Agent, as the case may be, shall promptly notify Administrative Agent and Synthetic LC Agent, if applicable, and Administrative Agent shall thereafter promptly notify each Synthetic LC Lender, of the unreimbursed amount of such Synthetic LC Disbursement, and Synthetic LC Depositary Bank shall pay to Synthetic LC Issuing Bank or Synthetic LC Agent, as the case may be, from the Synthetic LC Deposit Account, for the account of each Synthetic LC Lender, an amount equal to such Synthetic LC Lender’s Pro Rata Share of such Synthetic LC Disbursement, in Dollars and in same day funds, at the office of Synthetic LC Issuing Bank specified in such notice, not later than 12:00 p.m. (New York City time) on the first business day (under the laws of the jurisdiction in which such office of Synthetic LC Issuing Bank is located) after the date

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notified by Synthetic LC Issuing Bank. In the event that the Synthetic LC Deposit Account is charged by Synthetic LC Agent to Synthetic LC Issuing Bank to reimburse Synthetic LC Issuing Bank pursuant to this Section 2.5(e), Borrower shall pay over to Administrative Agent in reimbursement of the applicable Synthetic LC Disbursement an amount equal to the amount so charged, as provided in paragraph (d) above, and such payment shall be remitted by Administrative Agent to Synthetic LC Agent for deposit into the Synthetic LC Deposit Account. Each Synthetic LC Lender irrevocably authorizes Synthetic LC Agent and the Synthetic LC Issuing Bank to apply, or to permit the Synthetic LC Depositary Bank to apply, amounts of its Synthetic LC Deposit held in the Synthetic LC Deposit Account as provided in this Section 2.5(e). Any payment made from the Synthetic LC Deposit Account pursuant to this paragraph or otherwise to reimburse Synthetic LC Issuing Bank for any Synthetic LC Disbursement shall not constitute a Loan and shall not relieve Borrower of its obligation to reimburse such Synthetic LC Disbursement. The Synthetic LC Depositary Bank agrees to make available amounts in the Synthetic LC Deposit Account at the times and for the purposes set forth in this Section 2.5(e), either by application of such amounts to reimburse Synthetic LC Agent or Synthetic LC Issuing Bank (if Synthetic LC Issuing Bank shall be the Synthetic LC Depositary Bank) or by transfer of such amounts to Synthetic LC Issuing Bank or Synthetic LC Agent, which shall apply the amounts so transferred to reimburse Synthetic LC Issuing Bank (if Synthetic LC Issuing Bank shall not be the Synthetic LC Depositary Bank).

(f) Obligations Absolute . The obligation of Borrower to reimburse Synthetic LC Issuing Bank and Synthetic LC Agent for Synthetic LC Disbursements made by them and the obligations of Synthetic LC Lenders under Section 2.5(e) shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms hereof under all circumstances including any of the following circumstances: (i) any lack of validity or enforceability of any Synthetic Letter of Credit; (ii) the existence of any claim, set-off, defense or other right which Borrower or any Lender may have at any time against a beneficiary or any transferee of any Synthetic Letter of Credit (or any Persons for whom any such transferee may be acting), Synthetic LC Issuing Bank, Synthetic LC Agent, any Synthetic LC Lender, any Lender or any other Person or, in the case of a Synthetic LC Lender or a Lender, against Borrower, whether in connection herewith, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Borrower or one of its Subsidiaries and the beneficiary for which any Synthetic Letter of Credit was procured); (iii) any draft or other document presented under any Synthetic Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by Synthetic LC Issuing Bank to the beneficiary or as otherwise required by law under any Synthetic Letter of Credit against presentation of a draft or other document which does not substantially comply with the terms of such Synthetic Letter of Credit; (v) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Borrower or any of its Subsidiaries; (vi) any breach hereof or any other Credit Document by any party thereto; (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; (viii) the fact that an Event of Default or a Default shall have occurred and be continuing; or (ix) the return of the Synthetic LC Deposits; provided , in each case, that payment by Synthetic LC Issuing Bank under the applicable Synthetic Letter of Credit shall not have constituted gross negligence or willful misconduct of Synthetic LC Issuing Bank under the circumstances in question as determined by a final, non-appealable order issued by a court of competent jurisdiction.

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(g) Indemnification . Without duplication of any obligation of Borrower under Section 10.2 or 10.3, in addition to amounts payable as provided herein, Borrower hereby agrees to protect, indemnify, pay and save harmless Synthetic LC Issuing Bank and Synthetic LC Agent from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and reasonable allocated costs of internal counsel) which Synthetic LC Issuing Bank or Synthetic LC Agent may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Synthetic Letter of Credit by Synthetic LC Issuing Bank, other than as a result of (1) the gross negligence or willful misconduct of Synthetic LC Issuing Bank as determined by a final, non-appealable order issued by a court of competent jurisdiction or (2) the wrongful dishonor by Synthetic LC Issuing Bank of a proper demand for payment made under any Synthetic Letter of Credit issued by it, or (ii) the failure of Synthetic LC Issuing Bank to honor a drawing under any such Synthetic Letter of Credit as a result of any Governmental Act.

(h) Synthetic LC Issuing Bank Reports . Unless otherwise agreed by Synthetic LC Issuing Bank and Administrative Agent, Synthetic LC Issuing Bank shall report in writing to Administrative Agent (i) at least one Business Day prior to each Business Day on which Synthetic LC Issuing Bank issues, amends, renews or extends any Synthetic Letter of Credit, the date of such issuance, amendment, renewal or extension, and the aggregate face amount of the Synthetic Letters of Credit issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension (and whether the amount thereof has changed), it being understood that unless Synthetic LC Issuing Bank has received notice from Administrative Agent that such increase is not then permitted by the terms of this Agreement by 12:00 noon (New York City time), then Synthetic LC Issuing Bank shall effect the issuance, renewal, extension or amendment resulting in an increase in the amount of any Synthetic Letter of Credit, (ii) on each Business Day on which Synthetic LC Issuing Bank makes a Synthetic LC Disbursement, the date and amount of such Synthetic LC Disbursement, (iii) on any Business Day on which Borrower fails to reimburse a Synthetic LC Disbursement required to be reimbursed to Synthetic LC Issuing Bank on such day, the date of such failure and the amount of such Synthetic LC Disbursement and (iv) on any other Business Day, such other information as Administrative Agent shall reasonably request as to the Synthetic Letters of Credit issued by Synthetic LC Issuing Bank and outstanding on such Business Day.

(i) Establishment of Synthetic LC Deposit Account and Sub-Accounts . On or prior to the Closing Date, Synthetic LC Issuing Bank or Synthetic LC Agent shall have established a deposit account (the “Synthetic LC Deposit Account” ) of Synthetic LC Issuing Bank or Synthetic LC Agent at the Synthetic LC Depositary Bank with the title “Movie Gallery Amended and Restated Credit Agreement Synthetic LC Deposit Account”. Administrative Agent shall maintain records enabling it to determine at any time the amount of the interest of each Synthetic LC Lender in the Synthetic LC Deposit Account (the interest of each Synthetic LC Lender in the Synthetic LC Deposit Account, as evidenced by such records, being referred to as such Synthetic LC Lender’s “Sub-Account” ). Each Sub-Account shall not be a separate deposit account at the Synthetic LC Depositary Bank but shall only be a notation in the records maintained by Administrative Agent. Synthetic LC Issuing Bank, Synthetic LC Agent and Synthetic LC Depositary Bank shall not be required to maintain any records as to the interests of each Synthetic LC Lender (which shall be maintained by Administrative Agent) or make any payments directly to any Synthetic LC Lender (but only to Administrative Agent for payment to

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any Synthetic LC Lender). Synthetic LC Issuing Bank, Synthetic LC Agent and Synthetic LC Depositary Bank shall not be required to maintain any records as to the interests of each Synthetic LC Lender (which shall be maintained by Administrative Agent) or make any payments directly to any Synthetic LC Lender (but only to Administrative Agent for payment to any Synthetic LC Lender). Administrative Agent shall establish such additional Sub-Accounts for assignee Synthetic LC Lenders as Administrative Agent shall determine pursuant to Section 10.6(g). No Person shall have the right to make any withdrawal from the Synthetic LC Deposit Account or to exercise any other right or power with respect thereto except as expressly provided in paragraph (l) below or in Section 10.6(g). Without limiting the generality of the foregoing, each party hereto acknowledges and agrees that the amounts on deposit in the Synthetic LC Deposit Account are and will at all times be property of Synthetic LC Agent or Synthetic LC Issuing Bank, as the case may be, acting for the benefit of the Synthetic LC Lenders, and that no amount on deposit at any time in the Synthetic LC Deposit Account shall be the property of any of the Credit Parties, constitute “Collateral” under the Credit Documents or otherwise be available in any manner to satisfy any Obligations of any of the Credit Parties under the Credit Documents. Each Synthetic LC Lender agrees that its right, title and interest in and to the Synthetic LC Deposit Account shall be limited to the right, acting through Synthetic LC Agent or Synthetic LC Issuing Bank, as the case may be, to require amounts in its Sub-Account to be applied as provided in paragraph (l) below and that it will have no right to require the return of its portion of the amounts in the Synthetic LC Deposit Account other than as expressly provided in such paragraph (l) (each Synthetic LC Lender hereby acknowledging (i) that its portion of the amounts in the Synthetic LC Deposit Account constitutes payment for its participations in Synthetic Letters of Credit issued or to be issued hereunder, (ii) that its portion of amounts in the Synthetic LC Deposit Account and any investments made therewith shall be applied to reimburse Synthetic LC Issuing Bank or Synthetic LC Agent hereunder in respect of the Obligations arising in respect of the Synthetic Letter of Credit facility hereunder and (iii) that Synthetic LC Issuing Bank will be issuing, amending, renewing and extending Synthetic Letters of Credit in reliance on the availability of such Synthetic LC Lender’s portion of the amounts in the Synthetic LC Deposit Account to discharge such Synthetic LC Lender’s obligations in accordance with Section 2.5(e) in connection with any Synthetic LC Disbursement thereunder). The funding of the Synthetic LC Deposits, the establishment and funding of the Synthetic LC Deposit Account and the agreements with respect thereto set forth in this Agreement constitute arrangements among Administrative Agent, Synthetic LC Agent, Synthetic LC Issuing Bank and the Synthetic LC Lenders with respect to the funding obligations of the Synthetic LC Lenders under this Agreement, and the amounts in the Synthetic LC Deposit Account do not constitute a loan or extension of credit to any Credit Party. No Credit Party shall have any responsibility or liability to the Synthetic LC Lenders, the Agents or any other Person in respect of the establishment, maintenance, administration or misappropriation of the Synthetic LC Deposit Account (or any Sub-Account) or with respect to the investment of amounts held therein, including pursuant to paragraph (n) below. Each of Administrative Agent, Synthetic LC Agent, Synthetic LC Issuing Bank and the Synthetic LC Depositary Bank hereby waives any right of setoff against the Synthetic LC Deposit Account that it may have under applicable law or otherwise with respect to amounts owed to it by Synthetic LC Lenders other than in its capacity as Synthetic LC Issuing Bank or Synthetic LC Agent with respect to unreimbursed Synthetic LC Disbursements (it being agreed that such waiver shall not reduce the rights of the Synthetic LC Depositary Bank, in its capacity as Synthetic LC Issuing Bank or otherwise, to apply or require the application of the amounts in the Synthetic LC Deposit Account in accordance with the provisions of this Agreement).

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(j) Funding of Synthetic LC Deposits .

(i) Subject to the terms and conditions hereof, each Synthetic LC Lender severally agrees to transfer to Administrative Agent for deposit in such Synthetic LC Lender’s Sub-Account with Administrative Agent in an aggregate amount up to but not exceeding such Synthetic LC Lender’s Synthetic LC Commitment. As of the Closing Date, the Synthetic LC Deposits have been fully funded in the amount of $23,500,000 and the aggregate unfunded Synthetic LC Commitments equal $0.

(ii) Borrower shall deliver to Administrative Agent (with a copy to Synthetic LC Agent) a fully executed Funding Notice requesting that Synthetic LC Lenders make Synthetic LC Deposits no later than three Business Days prior to the Closing Date.

(iii) Notice of receipt of such Funding Notice in respect of Synthetic LC Deposits, together with the amount of each Synthetic LC Lender’s Pro Rata Share thereof shall be provided by Administrative Agent to each Synthetic LC Lender and to Synthetic LC Depositary Bank.

(iv) To the extent not already deposited with the Synthetic LC Depositary Bank, each Synthetic LC Lender shall make the amount of its Synthetic LC Deposit available to Administrative Agent not later than 1:00 p.m. (New York City time) on the Closing Date by wire transfer of same day funds in Dollars, at the Principal Office designated by Administrative Agent. Upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall remit to Synthetic LC Agent within one (1) Business Day after the Closing Date, the proceeds of such Synthetic LC Deposits for deposit by Synthetic LC Agent into the Synthetic LC Deposit Account. No conditions precedent related to the Synthetic LC Deposit Account or Synthetic Letter of Credit may be waived without the prior written consent of Synthetic LC Agent.

(v) Borrower may only request Synthetic LC Lenders to make Synthetic LC Deposits on the Closing Date.

(vi) Synthetic LC Deposits shall be available, on the terms and subject to the conditions set forth herein, for application pursuant to Section 2.5(e) to reimburse such Synthetic LC Lender’s Pro Rata Share of Synthetic LC Disbursements that are not reimbursed by Borrower. The obligations of Synthetic LC Lenders to make the deposits required by this Section 2.5(j) are several, and no Synthetic LC Lender shall be responsible for any other Synthetic LC Lender’s failure to make its deposit as so required.

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(k) Synthetic LC Deposits in Synthetic LC Deposit Account . The following amounts will be deposited in the Synthetic LC Deposit Account at the following times:

(i) Each Synthetic LC Lender shall make such Synthetic LC Lender’s Synthetic LC Deposits available to Administrative Agent in accordance with Section 2.5(j). Thereafter, the Synthetic LC Deposits shall be available, on the terms and subject to the conditions set forth herein, for application pursuant to Section 2.5(e) to reimburse Synthetic LC Issuing Bank and Synthetic LC Agent for such Synthetic LC Lender’s Pro Rata Share of Synthetic LC Disbursements that are not reimbursed by Borrower.

(ii) On any date prior to the Synthetic LC Commitment Termination Date on which Administrative Agent, Synthetic LC Agent or Synthetic LC Issuing Bank receives any reimbursement payment from Borrower in respect of a Synthetic LC Disbursement with respect to which amounts were withdrawn from the Synthetic LC Deposit Account to reimburse Synthetic LC Issuing Bank, subject to subparagraph (iii) below, Administrative Agent shall remit to Synthetic LC Agent, or Synthetic LC Issuing Bank shall transfer to Synthetic LC Agent, which shall deposit in the Synthetic LC Deposit Account, and Administrative Agent shall credit to the Sub-Accounts of the Synthetic LC Lenders, the portion of such reimbursement payment to be deposited therein, in accordance with Section 2.5(e).

(iii) If at any time when any amount is required to be deposited in the Synthetic LC Deposit Account under subparagraph (ii) above the sum of such amount and the amount held in the Synthetic LC Deposit Account at such time would exceed the total Synthetic LC Deposits, then such excess shall not be deposited in the Synthetic LC Deposit Account and shall instead be paid to Administrative Agent, which shall pay to each Synthetic LC Lender its Pro Rata Share of such excess.

(iv) Concurrently with the effectiveness of any assignment by any Synthetic LC Lender of all or any portion of its Synthetic LC Deposit, Administrative Agent shall transfer into the Sub-Account of the assignee the corresponding portion of the amount on deposit in the assignor’s Sub-Account in accordance with Section 10.6(g).

(l) Withdrawals From and Closing of Synthetic LC Deposit Account . Amounts on deposit in the Synthetic LC Deposit Account shall be withdrawn and distributed (or transferred, in the case of subparagraph (iv) below) as follows:

(i) On each date on which Synthetic LC Issuing Bank or Synthetic LC Agent is to be reimbursed by the Synthetic LC Lenders pursuant to Section 2.5(e) for any Synthetic LC Disbursement made by Synthetic LC Issuing Bank or amounts owed to Synthetic LC Agent in connection with the Synthetic Letters of Credit or the Credit Documents, Administrative Agent shall instruct Synthetic LC Agent to, and Synthetic LC Agent shall to the extent funds are available, withdraw from the Synthetic LC Deposit Account the amount of such unreimbursed Synthetic LC Disbursement (and Administrative Agent shall debit the Sub-Account of each Synthetic LC Lender in the amount of such Synthetic LC Lender’s Pro Rata Share of such unreimbursed Synthetic LC Disbursement) and Synthetic LC Agent shall apply such amount to reimburse Synthetic LC Issuing Bank or Synthetic LC Agent for such Synthetic LC Disbursement (if such Synthetic LC Issuing Bank shall be the Synthetic LC Depositary Bank) or transfer such amount to Administrative Agent, which shall apply the amount so transferred to reimburse Synthetic LC Issuing Bank (if Synthetic LC Issuing Bank shall not be the Synthetic LC Depositary Bank), all in accordance with Section 2.5(e).

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(ii) Concurrently with each voluntary reduction of the total Synthetic LC Commitments pursuant to and in accordance with Section 2.14 or 2.16, the Synthetic Letter of Credit Limit shall be reduced by the same amount of any such reduction, Administrative Agent shall instruct Synthetic LC Agent to, and Synthetic LC Agent shall to the extent funds are available, withdraw from the Synthetic LC Deposit Account and Synthetic LC Agent shall remit such funds to Administrative Agent and Administrative Agent shall pay to each Synthetic LC Lender such Synthetic LC Lender’s Pro Rata Share of any amount by which the Synthetic LC Deposits, after giving effect to such reduction of the total Synthetic LC Commitments, would exceed the greater of the total Synthetic LC Commitments and the total Synthetic LC Usage (and the Synthetic LC Depositary Bank agrees to pay over such amounts in the Synthetic LC Deposit Account to Synthetic LC Agent in accordance with the terms hereof).

(iii) Concurrently with any reduction of the total Synthetic LC Commitments to zero pursuant to and in accordance with Section 2.14, 2.15 or Section 8, Administrative Agent shall instruct Synthetic LC Agent to, and Synthetic LC Agent shall to the extent funds are available, withdraw from the Synthetic LC Deposit Account and Synthetic LC Agent shall remit such funds to Administrative Agent and Administrative Agent shall pay to each Synthetic LC Lender such Synthetic LC Lender’s Pro Rata Share of the excess at such time of the aggregate amount of the Synthetic LC Deposits over the Synthetic LC Usage (and the Synthetic LC Depositary Bank agrees to pay over such amounts in the Synthetic LC Deposit Account to Administrative Agent).

(iv) Concurrently with the effectiveness of any assignment by any Synthetic LC Lender of all or any portion of its Synthetic LC Deposit, the corresponding portion of the assignor’s Sub-Account shall be transferred on the records of Administrative Agent from the assignor’s Sub-Account to the assignee’s Sub-Account in accordance with Section 10.6(g) and, if required by Section 10.6(g), Administrative Agent shall close such assignor’s Sub-Account.

(v) Upon the reduction of each of the total Synthetic LC Commitments and the Synthetic LC Usage to zero, Administrative Agent shall instruct Synthetic LC Agent to, and Synthetic LC Agent shall to the extent funds are available, withdraw from the Synthetic LC Deposit Account and Synthetic LC Agent shall remit such funds to Administrative Agent and Administrative Agent shall pay to each Synthetic LC Lender the entire remaining amount of such Synthetic LC Lender’s Synthetic LC Deposit, and shall close the Synthetic LC Deposit Account (and the Synthetic LC Depositary Bank agrees to pay over such amounts in the Synthetic LC Deposit Account to Administrative Agent).

Each Synthetic LC Lender irrevocably and unconditionally agrees that its Synthetic LC Deposit may be applied or withdrawn from time to time as set forth in this paragraph (l).

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(m) Investment of Amounts in Synthetic LC Deposit Account . The Synthetic LC Depositary Bank shall invest, or cause to be invested, the amounts held from time to time in the Synthetic LC Deposit Account so as to earn for the account of Synthetic LC Agent, acting on behalf of each Synthetic LC Lender, a return thereon (the “Synthetic LC Deposit Return” ) for each day at a rate per annum equal to (i) the one month LIBOR rate as determined by Synthetic LC Depositary Bank on such day (or if such day was not a Business Day, the first Business Day immediately preceding such day) based on rates for deposits in dollars (as set forth by Bloomberg L.P.-page BTMM or any other comparable publicly available service as may be selected by Synthetic LC Depositary Bank) (the “Benchmark LIBOR Rate” ) minus (ii) 0.15% per annum (based on a 365/366 day year). The Benchmark LIBOR Rate will be reset on the last Business Day of each month and on the day of any Synthetic LC Disbursement. The Synthetic LC Deposit Return accrued through and including March 31, June 30, September 30 and December 31 of each year shall be paid by the Synthetic LC Depositary Bank to Administrative Agent, for payment to each Synthetic LC Lender, on the second Business Day following such last day, commencing on the first such date to occur after the Closing Date, and on the date on which each of the total Synthetic LC Deposits and the Synthetic LC Usage shall have been reduced to zero.

(n) Sufficiency of Synthetic LC Deposits to Provide for Undrawn/ Unreimbursed Synthetic Letters of Credit . Notwithstanding any other provision of this Agreement, including Sections 2.1 and 2.5, no Synthetic Letter of Credit shall be issued or increased as to its stated amount if, after giving effect to such issuance or increase, the aggregate amount of the Synthetic LC Deposits would be less than the Synthetic LC Usage or the Synthetic LC Usage would be greater than the Synthetic Letter of Credit Limit. Administrative Agent agrees to provide, at the request of Synthetic LC Issuing Bank or Synthetic LC Agent, information to such Synthetic LC Issuing Bank or Synthetic LC Agent, respectively, as to the aggregate amount of the Synthetic LC Deposits and the Synthetic LC Usage.

(o) Satisfaction of Synthetic LC Lender Funding Obligations . Borrower and Synthetic LC Issuing Bank each acknowledge and agree that, notwithstanding any other provision contained in this Agreement, the deposits by Synthetic LC Agent for Administrative Agent, on behalf of each Synthetic LC Lender, in the Synthetic LC Deposit Account on and after the Closing Date of funds equal to such Synthetic LC Lender’s Synthetic LC Commitment will fully discharge the obligation of such Synthetic LC Lender to reimburse such Synthetic LC Lender’s Pro Rata Share of Synthetic LC Disbursements that are not reimbursed by Borrower pursuant to Section 2.5(d), and that no other or further payments shall be required to be made by any Synthetic LC Lender in respect of any such reimbursement obligations.

2.6. Pro Rata Shares; Availability of Funds.

(a) Pro Rata Shares . All Loans and Synthetic LC Deposits shall be made, and all participations purchased, by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan or Synthetic LC Deposit requested hereunder or purchase a participation required hereby nor shall any Term Loan Commitment or any Synthetic LC Commitment of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby.

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(b) Availability of Funds . Unless Administrative Agent shall have been notified by any Lender prior to the applicable Credit Date that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Loan or Synthetic LC Deposit requested on such Credit Date, Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such Credit Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Borrower a corresponding amount on such Credit Date. If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three Business Days and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, (i) in the case of Loans, Administrative Agent shall promptly notify Borrower and Borrower shall immediately pay such corresponding amount to Administrative Agent together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the rate payable hereunder for the applicable Loans and (ii) in the case of Synthetic LC Deposits, Administrative Agent may withdraw from the Synthetic LC Deposit Account such corresponding amount together with interest thereon, for each day from such Credit Date until the date of such withdrawal by Administrative Agent, at the rate for Synthetic LC Deposits provided in Section 2.5(m). Nothing in this Section 2.6(b) shall be deemed to relieve any Lender from its obligation to fulfill its Synthetic LC Commitments and Term Loan Commitments hereunder or to prejudice any rights that Borrower may have against any Lender as a result of any default by such Lender hereunder.

2.7. Use of Proceeds. The proceeds of the Synthetic Letters of Credit made after the Closing Date, and the proceeds of the Term Loans, shall be applied by Borrower for working capital and general corporate purposes of the Borrower and its Subsidiaries. No portion of the proceeds of any Credit Extension shall be used in any manner that causes or might cause such Credit Extension or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors or any other regulation thereof or to violate the Exchange Act.

2.8. Evidence of Debt; Register; Lenders’ Books and Records; Notes.

(a) Lenders’ Evidence of Debt . Each Lender shall maintain on its internal records an account or accounts evidencing the Obligations of Borrower to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding on Borrower, absent manifest error; provided , that the failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Commitments or Borrower’s Obligations in respect of any applicable Loans; and provided further , in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern.

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(b) Register . Administrative Agent (or its agent or sub-agent appointed by it) shall maintain at the Principal Office a register for the recordation of the names and addresses of Lenders, the Loans of each Lender and the Synthetic LC Commitments and Synthetic LC Deposits of each Lender from time to time (the “Register” ). The Register shall be available for inspection by Borrower, any Lender (with respect to any entry relating to such Lender’s Loans or Synthetic LC Deposits and any entry relating to any Restricted Sponsor Affiliate’s Loans or Synthetic LC Deposits), Synthetic LC Issuing Bank (with respect to any entry relating to Synthetic Letters of Credit or Synthetic LC Deposits) or Synthetic LC Depositary Bank (with respect to any entry relating to Synthetic Letters of Credit or Synthetic LC Deposits) at any reasonable time and from time to time upon reasonable prior notice. Administrative Agent shall record, or shall cause to be recorded, in the Register the Loans of each Lender and the Synthetic LC Commitments and the Synthetic LC Deposits of each Lender, each in accordance with the provisions of Section 10.6, and each repayment or prepayment in respect of the principal amount of the Loans and each withdrawal from Synthetic LC Deposit Account, and any such recordation shall be conclusive and binding on Borrower and each Lender, absent manifest error; provided , failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Synthetic LC Commitments or Borrower’s Obligations in respect of any Loan or Synthetic LC Deposit. Borrower hereby designates Administrative Agent to serve as Borrower’s agent solely for purposes of maintaining the Register as provided in this Section 2.8, and Borrower hereby agrees that, to the extent Administrative Agent serves in such capacity, Administrative Agent and its officers, directors, employees, agents, sub-agents and affiliates shall constitute “Indemnitees.”

(c) Notes . If so requested by any Lender by written notice to Borrower (with a copy to Administrative Agent) at least two Business Days prior to the Closing Date, or at any time thereafter, Borrower shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 10.6) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after Borrower’s receipt of such notice) a Note or Notes to evidence such Lender’s Term Loan.

2.9. Interest on Loans.

(a) Except as otherwise set forth herein, each Loan shall bear interest on the unpaid principal amount thereof from the date made through repayment (whether by acceleration or otherwise) thereof as follows:

(i) [ RESERVED ] ;

(ii) [ RESERVED ] ;

(iii) in the case of Term Loans:

(1) if a Base Rate Loan, (A) at the Base Rate plus 6.25% per annum plus the Applicable Margin Adjustment then in effect (if any), plus (B) interest at 2.75% per annum minus the Applicable Margin Adjustment then in effect (if any) to be added to the principal amount of such Term Loans (it being understood that the amounts described in this subclause (B) shall not be paid to Lenders holding Term Loans as cash interest); or

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(2) if a Eurodollar Rate Loan, (A) at the Adjusted Eurodollar Rate plus 7.25% per annum plus the Applicable Margin Adjustment then in effect (if any), plus (B) interest at 2.75% per annum minus the Applicable Margin Adjustment then in effect (if any) to be added to the principal amount of such Term Loans (it being understood that the amounts described in this subclause (B) shall not be paid to Lenders holding Term Loans as cash interest);

(b) The basis for determining the rate of interest with respect to any Loan, and the Interest Period with respect to any Eurodollar Rate Loan, shall be selected by Borrower and notified to Administrative Agent and Lenders pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as the case may be. If on any day a Loan is outstanding with respect to which a Funding Notice or Conversion/Continuation Notice has not been delivered to Administrative Agent in accordance with the terms hereof specifying the applicable basis for determining the rate of interest, then for that day such Loan shall be a Base Rate Loan.

(c) In connection with Eurodollar Rate Loans there shall be no more than five (5) Interest Periods outstanding at any time. In the event Borrower fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as a Eurodollar Rate Loan) will be automatically converted into a Base Rate Loan on the last day of the then-current Interest Period for such Loan (or if outstanding as a Base Rate Loan will remain as, or (if not then outstanding) will be made as, a Base Rate Loan). In the event Borrower fails to specify an Interest Period for any Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, Borrower shall be deemed to have selected an Interest Period of one month. As soon as practicable after 10:00 a.m. (New York City time) on each Interest Rate Determination Date, Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rate that shall apply to the Eurodollar Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Borrower and each Lender.

(d) Interest payable pursuant to Section 2.9(a) shall be computed (i) in the case of Base Rate Loans on the basis of a 365-day or 366-day year, as the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Term Loan, the last Interest Payment Date with respect to such Term Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar

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Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded; provided , if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

(e) Except as otherwise set forth herein, interest on each Loan (i) shall accrue on a daily basis and shall be payable in arrears on each Interest Payment Date with respect to interest accrued on and to each such payment date; (ii) shall accrue on a daily basis and shall be payable in arrears upon any prepayment of that Loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii) shall accrue on a daily basis and shall be payable in arrears at maturity of the Loans, including final maturity of the Loans; provided , however, with respect to any voluntary prepayment of a Base Rate Loan, accrued interest shall instead be payable on the applicable Interest Payment Date.

(f) Borrower agrees to pay to Administrative Agent, for the account of Synthetic LC Issuing Bank and the Synthetic LC Lenders as described in paragraph (g) below, with respect to any Synthetic LC Disbursement, interest on the amount paid by Synthetic LC Issuing Bank in respect of each such Synthetic LC Disbursement from the date of such Synthetic LC Disbursement to but excluding the date such amount is reimbursed by or on behalf of Borrower at a rate equal to (i) for the period from the date of such Synthetic LC Disbursement to but excluding the applicable Synthetic LC Reimbursement Date, the rate of interest otherwise payable hereunder with respect to Term Loans that are Base Rate Loans, and (ii) thereafter, a rate which is 2% per annum in excess of the rate of interest otherwise payable hereunder with respect to Term Loans that are Base Rate Loans.

(g) Interest payable pursuant to Section 2.9(f) shall be computed on the basis of a 365/366-day year for the actual number of days elapsed in the period during which it accrues, and shall be payable on demand or, if no demand is made, on the date on which the related drawing under a Synthetic LC Disbursement is reimbursed in full by or on behalf of Borrower. Promptly upon receipt by Administrative Agent of any payment of interest due in respect of Synthetic LC Disbursements pursuant to Section 2.9(f), Administrative Agent shall distribute to each Synthetic LC Lender, out of the interest received by Administrative Agent in respect of the period from the date of such Synthetic LC Disbursement to but excluding the date on which such Synthetic LC Disbursement is reimbursed by or on behalf of Borrower, the amount that such Synthetic LC Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Synthetic Letter of Credit for such period if no Synthetic LC Disbursement had been made under such Synthetic Letter of Credit; in the event Synthetic LC Issuing Bank shall have been reimbursed for all or any portion of such Synthetic LC Disbursement pursuant to Section 2.5(e), Administrative Agent shall distribute to each Synthetic LC Lender (other than a Defaulting Lender) such Lender’s Pro Rata Share of any interest received by Administrative Agent in respect of that portion of such Synthetic LC Disbursement so reimbursed by Lenders for the period from the date on which Lenders made such reimbursement to but excluding the date on which such portion of such Synthetic LC Disbursement is reimbursed by Borrower, net of any amounts paid to such Lender pursuant to the immediately preceding sentence in respect of letter of credit fees for such period in respect of such Letter of Credit. All interest payable pursuant to Section 2.9(f) that is not distributed to Lenders as described in the preceding sentence shall be for the account of the Synthetic LC Issuing Bank.

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2.10. Conversion/Continuation.

(a) Subject to Section 2.19 and so long as no Default or Event of Default shall have occurred and then be continuing, Borrower shall have the option:

(i) to convert at any time all or any part of any Term Loan equal to $5,000,000 and integral multiples of $1,000,000 in excess of that amount from one Type of Loan to another Type of Loan; provided, a Eurodollar Rate Loan may only be converted on the expiration of the Interest Period applicable to such Eurodollar Rate Loan unless Borrower shall pay all amounts due under Section 2.19 in connection with any such conversion; or

(ii) upon the expiration of any Interest Period applicable to any Eurodollar Rate Loan, to continue all or any portion of such Loan equal to $5,000,000 and integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate Loan.

Borrower shall deliver a Conversion/Continuation Notice to Administrative Agent no later than 10:00 a.m. (New York City time) at least one Business Day in advance of the proposed conversion date (in the case of a conversion to a Base Rate Loan) and at least three Business Days in advance of the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a Conversion/Continuation Notice for conversion to, or continuation of, any Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and Borrower shall be bound to effect a conversion or continuation in accordance therewith.

2.11. Default Interest . The principal amount of all Loans outstanding and not paid when due and, to the extent permitted by applicable law, any interest payments on the Loans or any fees or other amounts owed hereunder and not paid when due, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate that is 2% per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans); provided , in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall thereafter bear interest payable upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans. Payment or acceptance of the increased rates of interest provided for in this Section 2.11 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent, Administrative Agent or any Lender.

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2.12. Fees.

(a) [ RESERVED ] .

(b) Borrower agrees to pay to Lenders having Synthetic LC Deposits letter of credit fees equal to (i) the Adjusted Eurodollar Rate plus 5.75% per annum times (ii) the average daily amount of total Synthetic LC Deposits (it being understood that the Synthetic LC Deposit Return paid to Administrative Agent on behalf of the Synthetic LC Lenders pursuant to Section 2.5(m) during the applicable period referred to in Section 2.12(d) shall be credited towards payment of the fees referred to in this Section 2.12(b) for such period). All fees referred to in this Section 2.12(b) shall be paid to Administrative Agent at its Principal Office and upon receipt, Administrative Agent shall promptly distribute to each Lender its Pro Rata Share thereof.

(c) Borrower agrees to pay the following fees:

(i) [ RESERVED ] ;

(ii) directly to Synthetic LC Issuing Bank, for its own account, a fronting fee equal to 0.50% per annum, times the average aggregate daily maximum amount available to be drawn under all Synthetic Letters of Credit (determined as of the close of business on any date of determination);

(iii) [ RESERVED ] ; and

(iv) directly to Synthetic LC Issuing Bank, for its own account, such documentary and processing charges for any issuance, amendment, transfer or payment of a Synthetic Letter of Credit as are in accordance with Synthetic LC Issuing Bank’s standard schedule for such charges and as in effect at the time of such issuance, amendment, transfer or payment, as the case may be.

(d) All fees referred to in Section 2.12(a), 2.12(b) and 2.12(c)(ii) shall be calculated on the basis of a 360-day year and the actual number of days elapsed and shall be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year until the Synthetic LC Commitment Termination Date, commencing on the first such date to occur after the Closing Date, and on the Synthetic LC Commitment Termination Date (it being understood that the Synthetic LC Deposit Return paid to Administrative Agent on behalf of the Synthetic LC Lenders pursuant to Section 2.5(m) during the applicable period shall be credited towards payment of the fees referred to in Section 2.12(b) for such period).

(e) In addition to any of the foregoing fees, Borrower agrees to pay: (i) to Agents such other fees in the amounts and at the times separately agreed upon; (ii) to each of the Lenders then holding Term Loans, its Pro Rata Share of the following: (A) on the Closing Date, 1.75% of the aggregate principal amount of the Term Loans outstanding on the Closing Date, (B) on the Closing Date, 0.75% of the aggregate principal amount of the Term Loans outstanding on the Closing Date, to be added to the principal amount of each such Lender’s Term Loans, (C) on the date that is eighteen (18) months after the Closing Date, 0.50% of the aggregate principal amount of the Term Loans (including capitalized interest) outstanding on such date and (D) on the date that is twenty four (24) months after the Closing Date, 0.50% of the aggregate principal amount of the Term Loans (including capitalized interest) outstanding on such date; and (iii) to Administrative Agent for the account of each Synthetic LC Lender, the fees set forth in Section 2.5(m) (it being understood that the Synthetic LC Deposit Return paid to Administrative Agent

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on behalf of the Synthetic LC Lenders pursuant to Section 2.5(m) during the applicable period shall be credited towards payment of the fees referred to in Section 2.12(b) for such period), and (iv) to Synthetic LC Agent on the Closing Date, the fee payable to Synthetic LC Agent with respect to the Synthetic Letter of Credit facility.

2.13. Scheduled Payments/Commitment Reductions.

The principal amount of the Term Loans shall be repaid in consecutive quarterly installments (each, an “Installment” ) of 0.25% of the original aggregate principal amount thereof, each on the last day of each calendar quarter of each year commencing on June 30, 2008.

Notwithstanding the foregoing, (x) such Installments shall be reduced in inverse order of maturity in connection with any voluntary or mandatory prepayments of the Term Loans, in accordance with Sections 2.14, 2.15 and 2.16, as applicable; and (y) the Term Loans, together with all other amounts owed hereunder with respect thereto, shall, in any event, be paid in full no later than the Term Loan Maturity Date.

2.14. Voluntary Prepayments/Commitment Reductions.

(a) Voluntary Prepayments .

(i) Any time and from time to time:

(1) with respect to Base Rate Loans, Borrower may prepay any such Loans on any Business Day in whole or in part, in an aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in excess of that amount (or, if less, the then remaining outstanding balance thereof);

(2) with respect to Eurodollar Rate Loans, Borrower may prepay any such Loans on any Business Day in whole or in part in an aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in excess of that amount (or, if less, the then remaining outstanding balance thereof); and

(3) [ RESERVED ] .

(ii) All such prepayments shall be made:

(1) upon not less than three Business Days’ prior written or telephonic notice in the case of Base Rate Loans; and

(2) upon not less than five Business Days’ prior written or telephonic notice in the case of Eurodollar Rate Loans; and

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(3) [ RESERVED ] ;

in each case given to Administrative Agent by 12:00 p.m. (New York City time) on the date required and, if given by telephone, as soon as practicable confirmed in writing to Administrative Agent (and Administrative Agent will promptly transmit such telephonic or original notice for Term Loans by telefacsimile or telephone to each Lender). Upon the giving of any such notice, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein. Any such voluntary prepayment shall be applied as specified in Section 2.16(a), and shall be without penalty or premium of any kind, except to the extent of breakage and other costs specifically provided for under this Agreement.

(b) Voluntary Commitment Reductions .

(i) [ RESERVED ] .

(ii) Borrower may, upon not less than three Business Days’ prior written or telephonic notice confirmed in writing to Administrative Agent (which original written or telephonic notice Administrative Agent will promptly transmit by telefacsimile or telephone to each applicable Lender and Synthetic LC Issuing Bank), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Synthetic LC Commitments in an amount up to the amount by which the Synthetic LC Commitments exceed the Synthetic LC Usage at the time of such proposed termination or reduction; provided , any such partial reduction of the Synthetic LC Commitments shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in excess of that amount.

(iii) Borrower’s notice to Administrative Agent shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Synthetic LC Commitments shall be effective on the date specified in Borrower’s notice and shall reduce the Synthetic LC Commitments of each Lender proportionately to its Pro Rata Share thereof.

2.15. Mandatory Prepayments.

(a) Asset Sales . No later than the first Business Day following the date of receipt by Borrower or any of its Subsidiaries of any Net Asset Sale Proceeds, Borrower shall prepay the Loans as set forth in Section 2.16(b) in an aggregate amount equal to such Net Asset Sale Proceeds; provided , (i) so long as no Default or Event of Default shall have occurred and be continuing and (ii) to the extent that aggregate Net Asset Sale Proceeds from the Closing Date through the applicable date of determination do not exceed $3,000,000, Borrower shall have the option, directly or through one or more of its Subsidiaries, to invest such Net Asset Sale Proceeds within three hundred sixty five days of receipt thereof (A) in long-term productive assets (including the assets of another Person (or the Equity Interests of a Person owning such assets) of the general type used in the business of Borrower and its Subsidiaries and (B) to the extent such Net Asset Sale Proceeds constitute proceeds of Non-Core Assets, in Rental Items or inventory held for sale at stores; provided further , pending any such investment all such Net Asset Sale Proceeds may be applied to prepay Revolving Loans under the Revolving Credit Agreement to the extent outstanding (without a reduction in Revolving Commitments thereunder).

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(b) Insurance/Condemnation Proceeds . No later than the first Business Day following the date of receipt by Borrower or any of its Subsidiaries, or Collateral Agent and/or Joint First Lien Collateral Agent as loss payee, of any Net Insurance/Condemnation Proceeds, Borrower shall prepay the Loans as set forth in Section 2.16(b) in an aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided , (i) so long as no Default or Event of Default shall have occurred and be continuing, and (ii) to the extent that aggregate Net Insurance/Condemnation Proceeds from the Closing Date through the applicable date of determination do not exceed $10,000,000, Borrower shall have the option, directly or through one or more of its Subsidiaries to invest such Net Insurance/Condemnation Proceeds within three hundred sixty five days of receipt thereof in long term productive assets of the general type used in the business of Borrower and its Subsidiaries, which investment may include the repair, restoration or replacement of the applicable assets thereof; provided further , pending any such investment all such Net Insurance/Condemnation Proceeds, as the case may be, may be applied to prepay Revolving Loans under the Revolving Credit Agreement to the extent outstanding (without a reduction in Revolving Commitments thereunder).

(c) Issuance of Equity Securities . On the date of receipt by Borrower of any Cash proceeds from a capital contribution to, or the issuance of any Equity Interests of, Borrower or any of its Subsidiaries (other than (w) proceeds of Equity Interests of the Borrower (that are not Disqualified Equity Interests) issued to a Restricted Sponsor Affiliate that is not a Credit Party (provided no Default or Event of Default shall have occurred and be then continuing), (x) proceeds of the issuance of Equity Interests issued pursuant to the Plan, (y) pursuant to any employee stock or stock option compensation plan, or (z) proceeds of the issuance of Equity Interests (that are not Disqualified Equity Interests) to finance the purchase of a Permitted Acquisition or Permitted Investment within 180 days of such issuance (provided no Default or Event of Default shall have occurred and be then continuing)) Borrower shall prepay the Loans as set forth in Section 2.16(b) in an aggregate amount equal to 50% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses; provided , during any period in which the Secured Leverage Ratio (determined for any such period by reference to the Compliance Certificate delivered pursuant to Section 5.1(d) calculating the Secured Leverage Ratio as of the last day of the most recently ended Fiscal Quarter) (i) shall be 2.50:1.00 or less, Borrower shall only be required to make the prepayments and/or reductions otherwise required hereby in an amount equal to 25% of such net proceeds and (ii) shall be 2.00:1.00 or less, Borrower shall not be required to make the prepayments and/or reductions otherwise required hereby; provided , further , that notwithstanding anything to the contrary in this Section 2.15(c), 100% of the proceeds of the Game Crazy IPO permitted by Section 6.8(j)(B), net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses, shall be applied to prepay the Loans as set forth in Section 2.16(b).

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(d) Issuance of Debt . On the date of receipt by Borrower or any of its Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of Borrower or any of its Subsidiaries (other than with respect to any Indebtedness permitted to be incurred pursuant to Section 6.1, excluding Indebtedness incurred under Section 6.1(r) which must be applied to prepay the Loans as provided hereunder), Borrower shall prepay the Loans as set forth in Section 2.16(b) in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses.

(e) Consolidated Excess Cash Flow . In the event that there shall be Consolidated Excess Cash Flow in any Fiscal Year (commencing with the Fiscal Year ending 2008), Borrower shall, no later than ninety (90) days after the end of each such Fiscal Year, prepay the Loans as set forth in Section 2.16(b) in an aggregate amount equal to (i) 75% of such Consolidated Excess Cash Flow minus (ii) voluntary repayments of the Loans and Revolving Loans (excluding repayments of Revolving Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments) during such Fiscal Year; provided , that if, as of the last day of the most recently ended Fiscal Year, the Secured Leverage Ratio (determined for any such period by reference to the Compliance Certificate delivered pursuant to Section 5.1(d) calculating the Secured Leverage Ratio as of the last day of such Fiscal Year) (i)(A) shall be 2.00:1.00 or less, Borrower shall only be required to make the prepayments and/or reductions otherwise required hereby in an amount equal to 50% of such Consolidated Excess Cash Flow or (B) shall be 1.50:1.00 or less, Borrower shall only be required to make the prepayments and/or reductions otherwise required hereby in an amount equal to 25% of such Consolidated Excess Cash Flow, in each case minus (ii) voluntary repayments of the Loans and Revolving Loans (excluding repayments of Revolving Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments) during such Fiscal Year; provided , further , that prepayments under this Section 2.15(e) shall not be required at the end of any Fiscal Year following the Closing Date to the extent such prepayments would, if given effect on the last day of such Fiscal Year, result in the aggregate Cash and Cash Equivalents of Borrower and its Subsidiaries (minus the aggregate amount of Revolving Loans then outstanding under the Revolving Credit Agreement) on such date being reduced to below the sum of $50,000,000 plus the cash interest payments in respect of the Loans and in respect of Indebtedness under the Revolving Credit Agreement that would accrue during the Fiscal Quarter immediately following the Fiscal Year to which such prepayment relates.

(f) Excess Cash . At the end of any of the first three Fiscal Quarters in any Fiscal Year (commencing with the Fiscal Quarter ending April 6, 2008), Borrower shall, no later than fifty (50) days after the end of each such Fiscal Quarter, prepay the Loans as set forth in Section 2.16(b) in an aggregate amount equal to (i) 100% of the Credit Parties’ Cash plus Cash Equivalents on hand at such date minus (ii) voluntary repayments of the Loans and Revolving Loans (excluding repayments of Revolving Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments) during such Fiscal Quarter; provided , that prepayments under this Section 2.15(f) shall not be required at the end of any of the first three Fiscal Quarters of any Fiscal Year to the extent such prepayments would, if given effect on the last day of the Fiscal Quarter, result in the aggregate Cash and Cash Equivalents of Borrower and its Subsidiaries (minus the aggregate amount of Revolving Loans then outstanding under the Revolving Credit Agreement) on such date being reduced to below the sum of $50,000,000 plus the cash interest payments in respect of the Loans and in respect of Indebtedness under the Revolving Credit Agreement that would accrue during the Fiscal Quarter immediately following the Fiscal Quarter to which such prepayment relates.

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(g) Prepayment Certificate . Concurrently with any prepayment of the Loans pursuant to Sections 2.15(a) through 2.15(f), Borrower shall deliver to Administrative Agent a certificate of an Authorized Officer demonstrating in reasonable detail the calculation of the amounts and sources of the applicable net proceeds or Consolidated Excess Cash Flow, as the case may be. In the event that Borrower shall subsequently determine that the actual amount received exceeded the amount set forth in such certificate, Borrower shall promptly make an additional prepayment of the Loans, and Borrower shall concurrently therewith deliver to Administrative Agent a certificate of an Authorized Officer demonstrating the derivation of such excess.

2.16. Application of Prepayments.

(a) Application of Voluntary Prepayments by Type of Loans . Subject to Section 2.17(h), any prepayment of any Loan pursuant to Section 2.14(a) shall be applied as specified by Borrower in the applicable notice of prepayment; provided , in the event Borrower fails to specify the Loans to which any such prepayment shall be applied, such prepayment shall be applied to prepay the Term Loans to reduce the scheduled remaining Installments of principal of the Term Loans in inverse order of maturity.

(b) Application of Mandatory Prepayments . Subject to Section 2.17(h), any amount required to be paid pursuant to Sections 2.15(a) through 2.15(f) shall be applied as follows (so long as, after giving effect to the transactions pursuant to Sections 2.15(a) through 2.15(f) and such application of payments below, no Event of Default has occurred and is then continuing:

first , to prepay the Terms Loans, applied to the remaining scheduled Installments of principal of the Term Loans in inverse order of maturity, and thereafter to any remaining principal amount of the Term Loans;

second , to prepay Second Lien Term Loans in accordance with the Second Lien Credit Agreement;

third , to prepay the Revolving Loans and pay any outstanding reimbursement obligations with respect to Revolving Letters of Credit and to pay any outstanding reimbursement obligations with respect to Synthetic Letters of Credit, in each case to the full extent thereof, on a pro rata basis (in accordance with the outstanding principal amount of the Revolving Loans and amount of outstanding reimbursement obligations with respect to Revolving Letters of Credit, on the one hand, and the amount of outstanding reimbursement obligations with respect to Synthetic Letters of Credit, on the other hand); and

fourth , to cash collateralize, on a pro rata basis, outstanding Revolving Letters of Credit (without a reduction in the Revolving Commitments) on the one hand, and outstanding Synthetic Letters of Credit and reduce the Synthetic LC Commitments by the amount of such cash collateralization, on the other hand.

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(c) Application of Prepayments of Loans to Base Rate Loans and Eurodollar Rate Loans . Considering each Class of Loans being prepaid separately, any prepayment shall be applied first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in each case in a manner which minimizes the amount of any payments required to be made by Borrower pursuant to Section 2.19(c).

2.17. General Provisions Regarding Payments.

(a) All payments by Borrower of principal, interest, fees and other Obligations shall be made in Dollars in same day funds (except in the case of interest to be added to principal as provided in Section 2.9(a)(iii), which shall be paid by adding such amounts to the principal of the Term Loans), without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 12:00 p.m. (New York City time) on the date due at the Principal Office designated by Administrative Agent for the account of Lenders; for purposes of computing interest and fees, funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by Borrower on the next succeeding Business Day.

(b) All payments in respect of the principal amount of any Loan shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in any event, any payments in respect of any Loan on a date when interest is due and payable with respect to such Loan) shall be applied to the payment of interest then due and payable before application to principal.

(c) Administrative Agent (or its agent or sub-agent appointed by it) shall promptly distribute to each Lender at such address as such Lender shall indicate in writing, such Lender’s applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder, together with all other amounts due thereto, including all fees payable with respect thereto, to the extent received by Administrative Agent.

(d) Notwithstanding the foregoing provisions hereof, if any Conversion/ Continuation Notice is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in apportioning payments received thereafter.

(e) Whenever any payment to be made hereunder with respect to any Loan shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day.

(f) Borrower hereby authorizes Administrative Agent, Collateral Agent, Synthetic LC Agent and Joint First Lien Collateral Agent to charge any Borrower’s accounts with Administrative Agent, Collateral Agent and Joint First Lien Collateral Agent in order to cause timely payment to be made to Administrative Agent, Collateral Agent, Synthetic LC Agent and Joint First Lien Collateral Agent of all principal, interest, fees and expenses due hereunder (subject to sufficient funds being available in its accounts for that purpose).

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(g) Administrative Agent shall deem any payment by or on behalf of Borrower hereunder that is not made in same day funds prior to 12:00 p.m. (New York City time) to be a non-conforming payment. Any such payment shall not be deemed to have been received by Administrative Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day. Administrative Agent shall give prompt notice to Borrower and each applicable Lender (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 8.1(a). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business D