Document:

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                                                                    EXHIBIT 10.2

                               CUMULUS MEDIA INC.

                       FORM OF RESTRICTED SHARES AGREEMENT

      WHEREAS, _________________ ("GRANTEE") is an employee of Cumulus Media
Inc. (the "COMPANY"); and

      WHEREAS, the grant of restricted shares evidenced hereby was authorized by
a resolution of the Compensation Committee (the "COMMITTEE") of the Board of
Directors (the "BOARD") of the Company that was duly adopted on ______________.

      NOW, THEREFORE, pursuant to Cumulus Media Inc. 2004 Equity Incentive Plan
(the "PLAN") and subject to the terms and conditions thereof and the terms and
conditions hereinafter set forth, the Company hereby grants to Grantee,
effective as of __________ __, ____ (the "DATE OF GRANT"), the right to receive
__________________ (______) shares of the Company's Class A Common Stock, par
value $.01 per share (the "COMMON SHARES").

1.    Rights of Grantee. The Common Shares subject to this grant shall be fully
      paid and nonassessable and shall be represented by a certificate or
      certificates registered in Grantee's name and endorsed with an appropriate
      legend referring to the restrictions hereinafter set forth. Grantee shall
      have all the rights of a stockholder with respect to such shares,
      including the right to vote the shares and receive all dividends paid
      thereon, provided that such shares, and any additional shares that Grantee
      may become entitled to receive by virtue of a share dividend, a merger or
      reorganization in which the Company is the surviving corporation or any
      other change in the capital structure of the Company, shall be subject to
      the restrictions hereinafter set forth.

2.    Restrictions on Transfer of Common Shares. The Common Shares subject to
      this grant may not be assigned, exchanged, pledged, sold, transferred or
      otherwise disposed of by Grantee, except to the Company, until the Common
      Shares have become nonforfeitable in accordance with Section 3 hereof;
      provided, however, that Grantee's rights with respect to such Common
      Shares may be transferred by will or pursuant to the laws of descent and
      distribution. Any purported transfer in violation of the provisions of
      this Section 2 shall be null and void, and the purported transferee shall
      obtain no rights with respect to such shares.

3.    Vesting of Common Shares.

      (a)   Subject to the terms and conditions of Sections 3(b), 3(c) and 4
            hereof, Grantee's right to receive the Common Shares covered by this
            agreement shall become nonforfeitable to the extent of one-half
            (1/2) of the Common Shares covered by this agreement after Grantee
            shall have been in the continuous employ of the Company or a
            subsidiary for two full years from the Date of Grant and to the
            extent of an additional one-eighth (1/8) thereof after each of the
            next eight (8) successive calendar quarters thereafter during which
            Grantee shall have been in the continuous employ of the Company or a
            subsidiary. For purposes of this agreement, "SUBSIDIARY" shall mean
            a corporation, partnership, joint venture, unincorporated
            association or other entity in which the Company has a direct or

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            indirect ownership or other equity interest. For purposes of this
            agreement, the continuous employment of Grantee with the Company or
            a subsidiary shall not be deemed to have been interrupted, and
            Grantee shall not be deemed to have ceased to be an employee of the
            Company or a subsidiary, by reason of the transfer of his employment
            among the Company and its subsidiaries.

      (b)   Notwithstanding the provisions of Section 3(a) hereof, and unless
            otherwise provided for in Grantee's employment agreement with the
            Company, upon Grantee's death or disability (as defined in Grantee's
            employment agreement with the Company) while in the employ of the
            Company or any subsidiary, Grantee's right to receive the Common
            Shares covered by this award shall become nonforfeitable, pursuant
            to the schedule set forth in Section 3(a), for one year beyond the
            date of Grantee's death or disability. On the first anniversary of
            the date of such death or disability, Grantee's right to receive any
            remaining Common Shares covered by this agreement shall be forfeited
            automatically and without further notice.

      (c)   Notwithstanding the provisions of Section 3(a) hereof, Grantee's
            right to receive the Common Shares covered by this agreement shall
            become nonforfeitable upon any Change in Control (as defined in
            Grantee's employment agreement with the Company, if such employment
            agreement contemplates a grant of Resticted Shares (as defined in
            the Plan); otherwise, as defined in the Plan) of the Company that
            shall occur while Grantee is an employee of the Company or a
            subsidiary.

4.    Forfeiture of Awards. Except as otherwise provided for in Grantee's
      employment agreement with the Company, Grantee's right to receive the
      Common Shares covered by this agreement that are then forfeitable shall be
      forfeited automatically and without further notice on the date that
      Grantee ceases to be an employee of the Company or a subsidiary prior to
      the fourth anniversary of the Date of Grant for any reason other than as
      described in Section 3(b). Except as otherwise provided for in Grantee's
      employment agreement with the Company, in the event that Grantee shall
      intentionally commit an act that the Committee determines to be materially
      adverse to the interests of the Company or a subsidiary, Grantee's right
      to receive the Common Shares covered by this agreement shall be forfeited
      at the time of that determination notwithstanding any other provision of
      this agreement.

5.    Retention of Certificates. During the period in which the restrictions on
      transfer and risk of forfeiture provided in Sections 2 and 4 above are in
      effect, the certificates representing the Common Shares covered by this
      grant shall be retained by the Company, together with the accompanying
      stock power signed by Grantee and endorsed in blank.

6.    Compliance with Law. The Company shall make reasonable efforts to comply
      with all applicable federal and state securities laws; provided, however,
      notwithstanding any other provision of this agreement, the Company shall
      not be obligated to issue any of the Common Shares covered by this
      agreement if the issuance thereof would result in violation of any such
      law. To the extent that the Georgia Securities Act of 1973, as amended,
      shall be applicable to this agreement, the Company shall not be obligated
      to

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<PAGE>

      issue any of the Common Shares or other securities covered by this
      agreement unless such Common Shares are (a) exempt from registration
      thereunder, (b) the subject of a transaction that is exempt from
      compliance therewith, (c) registered by description or qualification
      thereunder or (d) the subject of a transaction that shall have been
      registered by description thereunder.

7.    Adjustments. The Committee shall make any adjustments in the number or
      kind of shares of stock or other securities covered by this agreement that
      the Committee may determine to be equitably required to prevent any
      dilution or expansion of Grantee's rights under this agreement that
      otherwise would result from any (a) stock dividend, stock split,
      combination of shares, recapitalization or other change in the capital
      structure of the Company, (b) merger, consolidation, separation,
      reorganization or partial or complete liquidation involving the Company or
      (c) other transaction or event having an effect similar to any of those
      referred to in Section 7(a) or 7(b) hereof. Furthermore, in the event that
      any transaction or event described or referred to in the immediately
      preceding sentence shall occur, the Committee may provide in substitution
      of any or all of Grantee's rights under this agreement such alternative
      consideration as the Committee may determine in good faith to be equitable
      under the circumstances.

8.    Withholding Taxes. To the extent that the Company is required to withhold
      federal, state, local or foreign taxes in connection with any delivery of
      Common Shares to the Grantee, and the amounts available to the Company for
      such withholding are insufficient, it shall be a condition to the receipt
      of such delivery that the Grantee make arrangements satisfactory to the
      Company for payment of the balance of such taxes required to be withheld.
      The Grantee may elect that all or any part of such withholding requirement
      be satisfied by retention by the Company of a portion of the Common Shares
      delivered to the Grantee. If such election is made, the shares so retained
      shall be credited against such withholding requirement at the Market Price
      per Common Share on the date of such delivery. In no event, however, shall
      the Company accept Common Shares for payment of taxes in excess of
      required tax withholding rates, except that, unless otherwise determined
      by the Committee at any time, the Grantee may surrender Common Shares
      owned for more than six (6) months to satisfy any tax obligations
      resulting from any such transaction.

9.    Right to Terminate Employment. No provision of this agreement shall limit
      in any way whatsoever any right that the Company or a subsidiary may
      otherwise have to terminate the employment of Grantee at any time.

10.   Relation to Other Benefits. Any economic or other benefit to Grantee under
      this agreement or the Plan shall not be taken into account in determining
      any benefits to which Grantee may be entitled under any profit-sharing,
      retirement or other benefit or compensation plan maintained by the Company
      or a subsidiary and shall not affect the amount of any life insurance
      coverage available to any beneficiary under any life insurance plan
      covering employees of the Company or a subsidiary.

11.   Amendments. Any amendment to the Plan shall be deemed to be an amendment
      to this agreement to the extent that the amendment is applicable hereto;
      provided, however, that

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      no amendment shall adversely affect the rights of Grantee with respect to
      the Common Shares or other securities covered by this agreement without
      Grantee's consent.

12.   Severability. In the event that one or more of the provisions of this
      agreement shall be invalidated for any reason by a court of competent
      jurisdiction, any provision so invalidated shall be deemed to be separable
      from the other provisions hereof, and the remaining provisions hereof
      shall continue to be valid and fully enforceable.

13.   Governing Law. This agreement is made under, and shall be construed in
      accordance with, the internal substantive laws of the State of Georgia.

                          [SIGNATURE PAGE TO FOLLOW

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      This agreement is executed by the Company on this ____ day of __________,
2005.

                                             CUMULUS MEDIA INC.

                                             By ________________________________
                                             Name:
                                             Title:

      The undersigned Grantee hereby acknowledges receipt of an executed
original of this agreement and accepts the right to receive the Common Shares or
other securities covered hereby, subject to the terms and conditions of the Plan
and the terms and conditions herein above set forth.

                                             __________________________________
                                             Grantee

                                             Date:  ___________________________

                [signature page to restricted share agreement]<PAGE>

                                                                    EXHIBIT 10.1

                                  $325,000,000

                               MOVIE GALLERY, INC.
                            (a Delaware corporation)

                            11% Senior Notes due 2012

                               PURCHASE AGREEMENT

April 25, 2005

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                                                                  April 25, 2005

Wachovia Capital Markets, LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
CIBC World Markets Corp.
c/o Wachovia Capital Markets, LLC
    One Wachovia Center
    301 South College Street
    Charlotte, North Carolina 28288

Ladies and Gentlemen:

      Movie Gallery, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several purchasers named in Schedule I hereto (the
"Initial Purchasers"), for whom Wachovia Capital Markets, LLC, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and CIBC World Markets Corp. are acting as
Representatives (in such capacity, the "Representatives"), $325,000,000
aggregate principal amount of its 11% Senior Notes due 2012 (the "Notes"), which
will be unconditionally guaranteed on a senior basis as to principal, premium,
if any, and interest (the "Guarantees") by the subsidiaries of the Company named
in Schedule II hereto (each individually, a "Guarantor" and collectively, the
"Guarantors"). The Notes will be issued pursuant to an Indenture (the
"Indenture") dated as of the Closing Date (as defined in Section 2) among the
Company, the Guarantors and SunTrust Bank, as Trustee (the "Trustee"). This
Agreement, the Registration Rights Agreement, to be dated the Closing Date,
between the Initial Purchasers and the Company (the "Registration Rights
Agreement") and the Indenture are hereinafter collectively referred to as the
"Transaction Documents" and the execution and delivery of the Transaction
Documents and the transactions contemplated herein and therein are hereinafter
referred to as the "Transactions".

      The Notes (and the related Guarantees) will be offered and sold through
the Initial Purchasers without being registered under the Securities Act of
1933, as amended (the "Securities Act"), to qualified institutional buyers in
reliance on the exemption from registration provided by Rule 144A under the
Securities Act, and in offshore transactions in reliance on Regulation S under
the Securities Act ("Regulation S"). The Initial Purchasers have advised the
Company that they will offer and sell the Notes purchased by them hereunder in
accordance with Section 3 hereof as soon as the Representatives deem advisable.

      In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum, dated April 15, 2005 (the "Preliminary
Memorandum") and a final offering memorandum, dated the date hereof (the "Final
Memorandum" and, with the Preliminary Memorandum, each a "Memorandum"). Each
Memorandum sets forth certain information concerning the Company, the Notes, the
Transaction Documents and the Transactions. The Company hereby confirms that it
has authorized the use of the Preliminary Memorandum and the Final Memorandum,
and any amendment or supplement thereto, in connection with the offer and sale
of the Notes by the Initial Purchasers.

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      1. Representations and Warranties of the Company and the Guarantors. The
Company and the Guarantors (other than Hollywood Entertainment Corporation
("Hollywood") and Hollywood Management Company (collectively, the "Hollywood
Guarantors")) jointly and severally represent and warrant to, and agree with,
each of the Initial Purchasers that:

        (a) The Preliminary Memorandum does not contain, and the Final
   Memorandum, in the form used by the Initial Purchasers to confirm sales
   and on the Closing Date, and any amendment or supplement thereto does not
   and will not contain any untrue statement of a material fact or omit to
   state any material fact necessary to make the statements therein, in light
   of the circumstances under which they were made, not misleading; provided,
   however, that the representations or warranties set forth in this
   paragraph shall not apply to statements in or omissions from either
   Memorandum made in reliance upon and in conformity with information
   furnished in writing to the Company by the Initial Purchasers expressly
   for use therein, as specified in Section 11. The statistical and industry
   data included in each Memorandum are based on or derived from sources that
   the Company believes to be reliable and accurate.

        (b) The Company has been duly organized and is validly existing as a
   corporation in good standing under the laws of the State of Delaware. The
   Company is duly qualified to do business as a foreign corporation and is
   in good standing under the laws of each jurisdiction in which the conduct
   of its business or its ownership or leasing of property requires such
   qualification, except where the failure to so qualify or be in good
   standing would not have a Material Adverse Effect. "Material Adverse
   Effect" shall mean a material adverse change in or effect on or any
   development having a prospective material adverse effect on (i) the
   business, operations, properties, assets, liabilities, stockholders'
   equity, earnings, condition (financial or otherwise), results of
   operations or management of the Company and its subsidiaries or Hollywood
   and its subsidiaries, as applicable, considered as one enterprise, whether
   or not in the ordinary course of business, or (ii) the ability of the
   Company and each Guarantor to perform its obligations under the Notes or
   the Transaction Documents.

        (c) The Company and each Guarantor has full power (corporate and other)
   to own or lease its properties and conduct its business as described in
   each Memorandum; and the Company has full power (corporate and other) to
   enter into the Transaction Documents and to carry out all the terms and
   provisions hereof and thereof to be carried out by it.

        (d) The authorized, issued and outstanding capital stock of the Company
   is as set forth in the Final Memorandum. All of the issued shares of
   capital stock of the Company have been duly authorized and validly issued
   and are fully paid and nonassessable; and none of the outstanding shares
   of capital stock of the Company was issued in violation of the preemptive
   or other similar rights of any security holder of the Company.

        (e) Each subsidiary of the Company has been duly incorporated, is
   validly existing as a corporation in good standing under the laws of the
   jurisdiction of its incorporation, has the corporate power and authority
   to own its property and to conduct its business as described in the Final
   Memorandum and is duly qualified to transact business and is in good
   standing in each jurisdiction in which the conduct of its business or its
   ownership or leasing of property requires such qualification, except to
   the extent that the failure to be so qualified or be in good

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   standing would not have a Material Adverse Effect; all of the issued
   shares of capital stock or other equity interests of each subsidiary of
   the Company have been duly and validly authorized and issued, are fully
   paid and non-assessable, and, except for any encumbrance pursuant to
   (i)(A) the Credit Agreement between the Company and SouthTrust Bank, dated
   June 27, 2001 (as subsequently amended) as of the date hereof with respect
   to Movie Gallery or (B) the Credit Agreement between Hollywood and other
   parties named therein dated January 16, 2003 (as subsequently amended)
   with respect to Hollywood and (iii) the Credit Agreement to be entered
   into as of the Closing Date between the Company, Wachovia Bank, N.A., and
   the other parties to be named therein (collectively, the "Senior Financing
   Documents"), are owned directly or through wholly-owned subsidiaries by
   the Company, free and clear of all liens, encumbrances, equities or
   claims.

        (f) No subsidiary of the Company is prohibited, directly or indirectly,
   from paying any dividends to the Company, from making any other
   distribution on such subsidiary's capital stock, from repaying to the
   Company any loans or advances to such subsidiary from the Company or from
   transferring any of such subsidiary's property or assets to the Company or
   any other subsidiary of the Company, except as provided by applicable laws
   or regulations, the Senior Financing Documents, the Indenture or as
   disclosed in the Final Memorandum.

        (g) Ernst & Young LLP, who has certified the financial statements
   included in the Final Memorandum with respect to the Company and delivered
   its report with respect to such audited financial statements in the Final
   Memorandum, is, to the knowledge of the Company, an independent registered
   public accounting firm with respect to the Company within the meaning of
   the Securities Act and the applicable rules and regulations thereunder.
   PricewaterhouseCoopers LLP, who has certified the financial statements
   included in the Final Memorandum with respect to Hollywood and delivered
   its report with respect to such audited financial statements in the Final
   Memorandum, is, to the knowledge of the Company, an independent registered
   public accounting firm with respect to Hollywood within the meaning of the
   Securities Act and the applicable rules and regulations thereunder.

        (h) The financial statements (including the notes thereto) of the
   Company and its consolidated subsidiaries and Hollywood and its
   consolidated subsidiaries in the Final Memorandum fairly present the
   financial position, results of operations, cash flows and changes in
   stockholders' equity of the Company and its consolidated subsidiaries and
   Hollywood and its consolidated subsidiaries, as applicable, as of the
   dates and for the periods specified therein; such financial statements
   have been prepared in accordance with generally accepted accounting
   principles consistently applied throughout the periods involved (except as
   otherwise expressly disclosed in the notes thereto) and comply as to form
   with the applicable accounting requirements of Regulation S-X under the
   Securities Act; the information set forth under the captions "Offering
   Memorandum Summary - Summary Consolidated Financial Data and Other Data -
   Movie Gallery", "Summary Consolidated Financial Data and Other Data -
   Hollywood," "Selected Consolidated Financial Data - Movie Gallery" and
   "Selected Consolidated Financial Data - Hollywood" in the Final Memorandum
   has been fairly extracted from the financial statements of the Company and
   its consolidated subsidiaries and Hollywood and its consolidated
   subsidiaries, as applicable, fairly presents the information included
   therein and has been compiled on a basis consistent with that of the
   audited financial statements included in the Final Memorandum. The pro
   forma financial information in the Final

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<PAGE>

   Memorandum complies as to form with the applicable accounting requirements
   of Article 11 of Regulation S-X.

        (i) Subsequent to the respective dates as of which information is given
   in the Final Memorandum, (i) none of the Company and its subsidiaries and
   none of Hollywood and its subsidiaries have incurred any material
   liability or obligation, direct or contingent, or entered into any
   material transaction in each case not in the ordinary course of business;
   (ii) the Company has not purchased any of its outstanding capital stock,
   and, except for regular quarterly dividends on the common stock, par value
   $.001 per share of the Company in amounts per share that are consistent
   with past practice, has not declared, paid or otherwise made any dividend
   or distribution of any kind on any class of its capital stock; and (iii)
   there has not been any material change in the capital stock, short-term
   debt or long-term debt of the Company and its subsidiaries or Hollywood
   and its subsidiaries, except as disclosed in the Final Memorandum.

        (j) The Company and each of its subsidiaries and Hollywood and each of
   its subsidiaries maintain a system of internal accounting controls
   sufficient to provide reasonable assurances that (i) transactions are
   executed in accordance with management's general or specific
   authorizations; (ii) transactions are recorded as necessary to permit
   preparation of financial statements in conformity with generally accepted
   accounting principles and to maintain asset accountability; (iii) access
   to assets is permitted only in accordance with management's general or
   specific authorization; and (iv) the recorded accountability for assets is
   compared with the existing assets at reasonable intervals and appropriate
   action is taken with respect to any differences.

        (k) The Company and Hollywood are subject to and in full compliance with
   the reporting requirements of Section 13 or Section 15(d) of the
   Securities Exchange Act of 1934, as amended (the "Exchange Act"), except
   for failures to file current reports on Form 8-K by Hollywood. The reports
   on SEC Form 10-K filed most recently by the Company and Hollywood, at the
   time they were filed with the Commission complied in all material respects
   with the requirements of the Exchange Act and the rules and regulations of
   the Commission promulgated thereunder and, when read together with the
   other information in the Final Memorandum, at the date of the Final
   Memorandum and as of the Closing Date, do not and will not include an
   untrue statement of a material fact or omit to state a material fact
   required to be stated therein or necessary to make the statements therein,
   in the light of the circumstances under which they were made, not
   misleading.

        (l) This Agreement has been duly authorized, executed and delivered by
   the Company and each Guarantor.

        (m) The Indenture and the Registration Rights Agreement have been duly
   authorized by the Company and each Guarantor and, on the Closing Date,
   will have been duly executed and delivered by the Company and each
   Guarantor, and will constitute the legal, valid and binding obligations of
   the Company and each Guarantor, enforceable against the Company and each
   Guarantor in accordance with their respective terms, except as the
   enforcement thereof may be limited by bankruptcy, insolvency,
   reorganization, moratorium or similar laws affecting enforcement of
   creditors' rights generally and except as enforcement

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<PAGE>

   thereof is subject to general principles of equity; and the
   Indenture and the Registration Rights Agreement will conform to the
   description thereof in the Final Memorandum and will be
   substantially in the form previously delivered to you.

        (n) The Indenture will conform to the requirements of the Trust
   Indenture Act of 1939, as amended (the "Trust Indenture Act"), and to the
   rules and regulations of the Securities and Exchange Commission (the
   "Commission") applicable to an indenture that is qualified thereunder.

        (o) The Notes have been duly authorized and, on the Closing Date, when
   executed and authenticated in the manner provided for in the Indenture and
   delivered to and paid for by the Initial Purchasers as provided in this
   Agreement, will constitute the legal, valid and binding obligations of the
   Company, enforceable against the Company in accordance with their terms,
   except as the enforcement thereof may be limited by bankruptcy,
   insolvency, reorganization, moratorium or similar laws affecting
   enforcement of creditors' rights generally and except as enforcement
   thereof is subject to general principles of equity, and will be entitled
   to the benefits of the Indenture and the Registration Rights Agreement;
   the Guarantees have been duly authorized and, on the Closing Date, upon
   the due issuance and delivery of the related Notes and the due endorsement
   of the Guarantees thereon, will have been duly executed, endorsed and
   delivered and will constitute valid and legally binding obligations of
   each of the Guarantors, except as the enforcement thereof may be limited
   by bankruptcy, insolvency, reorganization, moratorium or similar laws
   affecting enforcement of creditors' rights generally and except as
   enforcement thereof is subject to general principles of equity, and will
   be entitled to the benefits of the Indenture; the Exchange Notes (as
   defined in the Registration Rights Agreement) have been duly authorized
   and, when executed and authenticated in the manner provided for in the
   Registration Rights Agreement and the Indenture, will constitute the
   legal, valid and binding obligations of the Company, enforceable against
   the Company in accordance with their terms, except as the enforcement
   thereof may be limited by bankruptcy, insolvency, reorganization,
   moratorium or similar laws affecting enforcement of creditors' rights
   generally and except as enforcement thereof is subject to general
   principles of equity, and will be entitled to the benefits of the
   Indenture and the Registration Rights Agreement; and the Notes and the
   Exchange Notes will conform to the descriptions thereof in the Final
   Memorandum.

        (p) The execution, delivery and performance by the Company and each
   Guarantor of this Agreement and the other Transaction Documents, the
   issuance and sale of the Notes and the compliance by the Company and each
   Guarantor with all of the provisions of the Notes, the Indenture, the
   Registration Rights Agreement and this Agreement and the consummation of
   the transactions contemplated hereby and thereby will not (i) conflict
   with, result in a breach or violation of, or constitute a default under,
   any indenture, mortgage, deed of trust or loan agreement, stockholders'
   agreement or any other agreement or instrument to which the Company or any
   of its subsidiaries or any other Guarantor is a party or by which the
   Company or any of its subsidiaries or any other Guarantor is bound or any
   of their respective properties are subject, except for such conflicts,
   breaches, violations or defaults that could not have a Material Adverse
   Effect, or (ii) with the certificate of incorporation or bylaws of the
   Company or any of its subsidiaries or any other Guarantor, or any statute,
   rule or regulation or any judgment, order or decree of any governmental
   authority or court or any arbitrator

                                      -5-
<PAGE>

   applicable to the Company or any of its subsidiaries or any other
   Guarantor, or (iii) require the consent, approval, authorization, order,
   registration or filing or qualification with, any governmental authority
   or court, or body or arbitrator having jurisdiction over the Company or
   any of its subsidiaries or any other Guarantor, except such as may be
   required by the securities or Blue Sky laws of the various states in
   connection with the offer or sale of the Notes and by Federal and state
   securities laws with respect to the obligations of the Company and the
   Guarantors under the Registration Rights Agreement.

        (q) No legal or governmental proceedings or investigations are pending
   or threatened to which the Company or any of its subsidiaries or Hollywood
   or any of its subsidiaries is a party or to which any of the properties of
   the Company or any of its subsidiaries or Hollywood or any of its
   subsidiaries is subject, other than proceedings accurately described in
   the Preliminary Memorandum and the Final Memorandum and such proceedings
   or investigations that could not, singly or in the aggregate, result in a
   Material Adverse Effect.

        (r) Except as disclosed in reports filed under the Exchange Act by Movie
   Gallery or Hollywood, there are no material relationships, direct or
   indirect, between or among the Company or Hollywood or any of their
   subsidiaries, on the one hand, and the respective directors, officers,
   stockholders, customers or suppliers of the Company or any of its
   subsidiaries on the other hand, that would be required by the Securities
   Act to be disclosed in a prospectus were the Notes being issued and sold
   in a public offering registered on Form S-1 under the Securities Act that
   are not so disclosed in the Preliminary Memorandum and Final Memorandum;
   and there are no contracts or other documents (other than employment
   agreements) that would be required by the Securities Act to be disclosed
   in a prospectus were the Notes being issued and sold in a public offering
   registered on Form S-1 under the Securities Act that are not so disclosed
   in the Preliminary Memorandum and Final Memorandum.

        (s) Each of the Company and each Guarantor is not now nor after giving
   effect to the issuance of the Notes and the execution, delivery and
   performance of the Transaction Documents and the consummation of the
   transactions contemplated thereby or described in the Preliminary
   Memorandum or the Final Memorandum, will be (i) insolvent, (ii) left with
   unreasonably small capital with which to engage in its anticipated
   business or (iii) incurring debts or other obligations beyond its ability
   to pay such debts or obligations as they become due.

        (t) The Company and its Affiliates (as defined in Rule 501(b) of
   Regulation D under the Securities Act ("Regulation D")) have not
   distributed and, prior to the later of (i) the Closing Date and (ii) the
   completion of the distribution of the Notes, will not distribute any
   offering material in connection with the offering and sale of the Notes
   other than the Preliminary Memorandum, the Final Memorandum or any
   amendment or supplement thereto.

        (u) The Company and its subsidiaries and Hollywood and its subsidiaries
   have not sustained, since the date of the latest respective audited
   financial statements included in the Final Memorandum (exclusive of any
   amendment or supplement thereto), any material loss or interference with
   its business or properties from fire, explosion, flood, accident or other

                                      -6-
<PAGE>

   calamity, whether or not covered by insurance, or from any labor dispute
   or court or governmental action, order or decree (whether domestic or
   foreign) otherwise than as set forth in the Final Memorandum (exclusive of
   any amendment or supplement thereto); and, since such date, there has not
   occurred any change or development having a Material Adverse Effect on the
   Company or Hollywood or any of their subsidiaries.

        (v) The Company and its subsidiaries and Hollywood and its subsidiaries
   have good and marketable title in fee simple to all items of real property
   and good and marketable title to all personal property owned by each of
   them except as set forth in the Final Memorandum, free and clear of any
   pledge, lien, encumbrance, security interest or other defect or claim of
   any third party, except for any encumbrance pursuant to the Senior
   Financing Documents and for such defects in title that could not,
   individually or in the aggregate, have a Material Adverse Effect. Any
   property leased by the Company and its subsidiaries is held under valid,
   subsisting and enforceable leases, and there is no default under any such
   lease or any other event that with notice or lapse of time or both would
   constitute a default thereunder, except for defaults that could not,
   individually or in the aggregate, have a Material Adverse Effect.

        (w) No "prohibited transaction" (as defined in Section 406 of the
   Employee Retirement Income Security Act of 1974, as amended, including the
   regulations and published interpretations thereunder ("ERISA"), or Section
   4975 of the Internal Revenue Code of 1986, as amended from time to time
   (the "Code")) or "accumulated funding deficiency" (as defined in Section
   302 of ERISA) or any of the events set forth in Section 4043(c) of ERISA
   (other than events with respect to which the 30-day notice requirement
   under Section 4043 of ERISA has been waived) has occurred, exists or is
   reasonably expected to occur with respect to any employee benefit plan (as
   defined in Section 3(3) of ERISA) which the Company or any of its
   subsidiaries maintains, contributes to or has any obligation to contribute
   to, or with respect to which the Company or any of its subsidiaries or any
   other Guarantor has any material liability, direct or indirect, contingent
   or otherwise (a "Plan"); each Plan is in compliance in all material
   respects with applicable law, including ERISA and the Code; none of the
   Company or any of its subsidiaries has incurred or expects to incur
   liability under Title IV of ERISA with respect to the termination of, or
   withdrawal from, any Plan; and each Plan that is intended to be qualified
   under Section 401(a) of the Code is so qualified in all material respects
   and nothing has occurred, whether by action or failure to act, which could
   reasonably be expected to cause the loss of such qualification.

        (x) Except as disclosed in each Memorandum, no labor dispute with the
   employees of the Company or any of its subsidiaries or Hollywood or any of
   its subsidiaries exists, is imminent or is threatened, and the senior
   officers of the Company and its subsidiaries are not aware of any
   existing, imminent or threatened labor disturbance by the employees of any
   of their respective principal suppliers, manufacturers, customers or
   contractors, which, in either case, could reasonably be expected to result
   in a Material Adverse Effect.

        (y) No proceedings for the merger, consolidation, liquidation or
   dissolution of the Company or any Guarantor and or the sale of all or a
   material part of the assets of the Company and its subsidiaries or any
   material acquisition by the Company or any Guarantor are pending or
   contemplated, except as set forth in the Final Memorandum.

                                       -7-
<PAGE>

        (z) The Company and each of its subsidiaries and Hollywood and each of
   its subsidiaries owns or otherwise possesses adequate rights to use all
   material patents, trademarks, service marks, trade names and copyrights,
   all applications and registrations for each of the foregoing, and all
   other material proprietary rights and confidential information necessary
   to conduct their respective businesses as currently conducted; none of the
   Company or any of its subsidiaries nor Hollywood and its subsidiaries has
   received any notice, or is otherwise aware, of any infringement of or
   conflict with the rights of any third party with respect to any of the
   foregoing, except for failures to possess such rights and for any such
   infringement or conflicts that could not, individually or in the
   aggregate, have a Material Adverse Effect.

        (aa) The Company and each of its subsidiaries and Hollywood and each of
   its subsidiaries is insured by insurers of recognized financial
   responsibility against such losses and risks and in such amounts and with
   such deductibles as are prudent in the business in which it is engaged;
   and none of the Company or any of its subsidiaries or Hollywood and its
   subsidiaries has any reason to believe that it will not be able to renew
   its existing insurance coverage as and when such coverage expires or to
   obtain similar coverage from similar insurers as may be necessary to
   continue their respective businesses at a cost that would not have a
   Material Adverse Effect.

        (bb) The Company and each of its subsidiaries and Hollywood and its
   subsidiaries are in compliance with all laws, ordinances, regulations and
   orders applicable to the Company and its subsidiaries or to Hollywood and
   its subsidiaries, as the case may be, and their respective businesses, and
   none of the Company or any of its subsidiaries nor Hollywood and any of
   its subsidiaries has received any notice to the contrary; and each of the
   Company and its subsidiaries and Hollywood and its subsidiaries possesses
   all certificates, authorizations, permits, licenses, approvals, orders and
   franchises (collectively, "Licenses") necessary to conduct their
   respective businesses in the manner and to the full extent now operated or
   proposed to be operated as described in the Final Memorandum, and are in
   compliance with the Licenses, in each case issued by the appropriate
   federal, state, local or foreign governmental or regulatory authorities
   (collectively, the "Agencies"), and each other federal, state and local
   agency, the regulations of which are applicable to the businesses or
   products of the Company and its subsidiaries or Hollywood and its
   subsidiaries, except where the failure to so comply with such laws,
   ordinances, regulations or orders or to possess such Licenses could not
   have a Material Adverse Effect. The Licenses are in full force and effect
   and no proceeding has been instituted or, to the Company's or Hollywood's
   knowledge, is threatened or contemplated which in any manner affects or
   calls into question the validity or effectiveness thereof, except for such
   failures to be in effect and such proceedings as could not have a Material
   Adverse Effect. The Licenses contain no restrictions, except for
   restrictions applicable to the home video, video game and tanning salon
   industries generally, that are materially burdensome to the Company or
   Hollywood.

        (cc) There is and has been no failure on the part of the Company or
   Hollywood or any of their respective directors or officers, in their
   capacities as such, to comply with any provision of the Sarbanes Oxley Act
   of 2002 and the rules and regulations promulgated in connection therewith
   (the "Sarbanes Oxley Act"), including Section 402 related to loans and
   Sections 302 and 906 related to certifications.

                                      -8-
<PAGE>

        (dd) (i) The Company and each of its subsidiaries and Hollywood and each
   of its subsidiaries is and has been in compliance with all applicable
   laws, statutes, ordinances, rules, regulations, orders, judgments,
   decisions, decrees, standards, and requirements relating to: human health
   and safety; pollution; management, disposal or release of any chemical
   substance, product or waste; and protection, cleanup, remediation or
   corrective action relating to the environment or natural resources
   ("Environmental Law");

          (ii) The Company and each of its subsidiaries and Hollywood and each
      of its subsidiaries has obtained and is in compliance with the conditions
      of all permits, authorizations, licenses, approvals and variances
      necessary under any Environmental Law for the continued conduct in the
      manner now conducted of their respective businesses ("Environmental
      Permits");

          (iii) To the knowledge of the Company, there are no past or present
      conditions or circumstances, including but not limited to pending changes
      in any Environmental Law or Environmental Permits, that are likely to
      interfere with the conduct of the business of the Company and its
      subsidiaries or Hollywood and each of its subsidiaries in the manner now
      conducted or which would interfere with compliance with any Environmental
      Law or Environmental Permits; and

          (iv) To the knowledge of the Company, there are no past or present
      conditions or circumstances at, or arising out of, their respective
      businesses, assets and properties of the Company and each of its
      subsidiaries or Hollywood and each of its subsidiaries or any business,
      assets or properties formerly leased, operated or owned by the Company or
      any of its subsidiaries, including but not limited to on-site or off-site
      disposal or release of any chemical substance, product or waste, which may
      give rise to: (i) liabilities or obligations for any cleanup, remediation
      or corrective action under any Environmental Law; (ii) claims arising
      under any Environmental Law for personal injury, property damage, or
      damage to natural resources; (iii) liabilities or obligations incurred by
      the Company or its subsidiaries to comply with any Environmental Law; or
      (iv) fines or penalties arising under any Environmental Law;

except in each case for any noncompliance or conditions or circumstances that,
singly or in the aggregate, could not result in a Material Adverse Effect.

        (ee) Neither the Company nor any Guarantor nor any subsidiary of the
   Company or any Guarantor is in violation of its certificate of
   incorporation, bylaws or other organizational document, and no default or
   breach exists, and no event has occurred that, with notice or lapse of
   time or both, would constitute a default in the due performance and
   observation of any term, covenant or condition of any indenture, mortgage,
   deed of trust, lease, loan agreement, stockholders' agreement or any other
   agreement or instrument to which the Company or any Guarantor or any
   subsidiary of the Company or any Guarantor is a party or by which the
   Company or any Guarantor or any of subsidiary of the Company or any
   Guarantor is bound or to which any of their respective properties are
   subject, except for such breaches, defaults or events, that could not,
   individually or in the aggregate, have a Material Adverse Effect.

                                      -9-
<PAGE>

        (ff) The Company and each of its subsidiaries and the Guarantor and each
   of their subsidiaries has filed all foreign, federal, state and local tax
   returns that are required to be filed or has requested extensions thereof
   and has paid all taxes required to be paid by it and any other assessment,
   fine or penalty levied against it, to the extent that any of the foregoing
   is due and payable, except for any such assessment, fine or penalty that
   is currently being contested in good faith and for which adequate reserves
   are retained, and except for such filings and payments, the failure of
   which to have been made, could not, individually or in the aggregate, have
   a Material Adverse Effect.

        (gg) Except as disclosed in the Final Memorandum, there are no
   contracts, agreements or understandings between the Company or any of its
   subsidiaries and any person granting such person the right to require the
   Company or any of its subsidiaries to file a registration statement under
   the Securities Act or to require the Company to include any securities
   held by any person in any registration statement filed by the Company
   under the Securities Act.

        (hh) Neither the Company nor any Guarantor is, nor after giving effect
   to the offering and sale of the Notes and the application of the proceeds
   thereof as described in the Final Memorandum will be, an "investment
   company", or a company "controlled" by an "investment company", within the
   meaning of the Investment Company Act of 1940, as amended (the "Investment
   Company Act").

        (ii) Neither the Company nor any of its subsidiaries nor any of their
   respective Affiliates, nor any person acting on behalf of the Company or
   any of its subsidiaries has, directly or indirectly, sold, offered for
   sale, solicited any offer to buy or otherwise negotiated in respect of, or
   will sell, offer for sale, solicit any offer to buy or otherwise negotiate
   in respect of, or distributed any offering memoranda or similar materials
   with respect to, any security which offer or sale would be integrated with
   the sale of the Notes and the Guarantees in a manner that would require
   the offer or sale of the Notes and the Guarantees to be registered under
   the 1933 Act (it being understood that no representation or warranty is
   made by the Company and the Guarantors as to the Initial Purchasers and
   their agents). Within the last six months, neither the Company nor anyone
   acting on its behalf has distributed to investors or potential investors
   any offering materials relating to an offering of securities, other than
   the Preliminary Memorandum.

        (jj) None of the Company or any of its Affiliates has, directly or
   through any person acting on its or their behalf (other than the Initial
   Purchasers, as to which no statement is made), offered, solicited offers
   to buy or sold the Notes by any form of general solicitation or general
   advertising (within the meaning of Regulation D) or in any manner
   involving a public offering within the meaning of Section 4(2) of the
   Securities Act.

        (kk) None of the Company, any of its Affiliates, nor any person acting
   on its or their behalf (other than the Initial Purchasers, as to which no
   statement is made), has engaged in any directed selling efforts with
   respect to the Notes, and each of them has complied with the offering
   restrictions requirement of Regulation S under the Securities Act
   ("Regulation S"). Terms used in this paragraph have the meanings given to
   them by Regulation S.

                                      -10-
<PAGE>

        (ll) None of the Company or any of its Affiliates has taken, directly or
   indirectly, any action designed to cause or result in, or which has
   constituted or which might reasonably be expected to cause or result in,
   stabilization or manipulation of the price of any security of the Company
   to facilitate the sale or resale of the Notes; nor has the Company or any
   of its Affiliates paid or agreed to pay to any person any compensation for
   soliciting another to purchase any securities of the Company (except as
   contemplated by this Agreement).

        (mm) The Notes satisfy the eligibility requirements of Rule 144A(d)(3)
   under the Securities Act.

        (nn) Assuming the accuracy of the representations and warranties of the
   Initial Purchasers in Section 3 hereof and compliance by the Initial
   Purchasers with the procedures set forth in Section 3 hereof, it is not
   necessary in connection with the offer, sale and delivery of the Notes to
   the Initial Purchasers in the manner contemplated by this Agreement and
   disclosed in the Preliminary Memorandum and the Final Memorandum to
   register the Notes or the related Guarantees under the Securities Act or
   to qualify the Indenture under the Trust Indenture Act.

        (oo) None of the Transactions (including, without limitation, the use of
   proceeds from the sale of the Notes) will violate or result in a violation
   of Section 7 of the Exchange Act or any regulation promulgated thereunder,
   including, without limitation, Regulations T, U and X of the Board of
   Governors of the Federal Reserve System.

        (pp) There are, and during the last 12 months there have been, no
   material disputes between the Company and its subsidiaries or Hollywood
   and its subsidiaries and any of their respective ten largest suppliers (as
   measured by dollar volume of goods purchased by the Company and its
   subsidiaries or Hollywood and its subsidiaries, as applicable) ("Material
   Suppliers"). The Company's and Hollywood's relations with their Material
   Suppliers are, to the knowledge of the Company and Hollywood, good, and
   the Company and Hollywood have received no notice, and are not otherwise
   aware, of any anticipated dispute with any of their respective Material
   Suppliers, or that any Material Supplier intends to cease or reduce its
   supply to the Company or Hollywood, as applicable.

        (qq) The relationship of the Company or Hollywood and each of their
   subsidiaries with each movie studio with which it has a revenue sharing
   contract or movie distribution arrangement, to the knowledge of the
   Company, is good, and the Company and Hollywood have received no notice,
   and are not otherwise aware, of any anticipated dispute with any of such
   respective movie studios, or that any such movie studios intend to cease
   or reduce their revenue sharing arrangements or movie distribution
   arrangements with the Company or Hollywood, or any of their respective
   subsidiaries, as applicable.

        (rr) Except as disclosed in the Final Memorandum, and except for fee
   arrangements between (i) the Company and Wachovia Bank, National
   Association; Wachovia Capital Investments, Inc.; Wachovia Capital Markets,
   LLC; Merrill Lynch Capital Corporation; and Merrill Lynch, Pierce, Fenner
   & Smith Incorporated and (ii) Hollywood and UBS Securities and Lazard
   Freres & Co., LLC, there are no agreements, arrangements or understandings
   that will require the payment of any commissions, fees or other
   remuneration to any investment

                                      -11-
<PAGE>

   banker, broker, finder, consultant or intermediary in connection with the
   transactions contemplated by this Agreement.

        (ss) The Company does not intend to treat any of the transactions
   contemplated by the Transaction Documents as being a "reportable
   transaction" (within the meaning of Treasury Regulation Section 1.6011-4).
   In the event the Company determines to take any action inconsistent with
   such intention, it will promptly notify the Representatives thereof. If
   the Company so notifies the Representatives, the Company acknowledges that
   one or more of the Initial Purchasers may not treat its purchase and
   resale of Notes as part of a transaction that is subject to Treasury
   Regulation Section 301.6112-1, and such Initial Purchaser or Initial
   Purchasers, as applicable, will maintain the lists and other records
   required by such Treasury Regulation.

        (tt) The Company has been advised by the National Association of
   Securities Dealers, Inc.'s (the "NASD") PORTAL Market that the Notes have
   been designated PORTAL-eligible securities in accordance with the rules
   and regulations of the NASD.

        (uu) There are no stamp or other issuance or transfer taxes or duties or
   other similar fees or charges required to be paid in connection with the
   execution and delivery of this Agreement or the issuance or sale by the
   Company of the Notes.

Each certificate signed by any officer of the Company or the Guarantors and
delivered to the Initial Purchasers or their counsel shall be deemed to be a
representation and warranty by the Company or the Guarantors, as the case may
be, to the Initial Purchasers as to the matters covered thereby. Upon the
delivery of and payment for the Notes as set forth in Section 2, the Hollywood
Guarantors will be deemed to have made all of the representations and warranties
set forth in Section 1.

      2. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell $325,000,000 aggregate principal amount of Notes, and each of the
Initial Purchasers, severally and not jointly, agree to purchase from the
Company the principal amount of Notes set forth opposite the name of such
Initial Purchaser in Schedule I hereto having the terms described in the Final
Offering Memorandum at a purchase price equal to 95.965% of the principal amount
thereof (the "Purchase Price"), plus any additional principal amount of Notes
that such Initial Purchaser may become obligated to purchase pursuant to the
provision of Section 10 hereof. One or more certificates in definitive form or
global form, as instructed by the Representatives for the Notes that the Initial
Purchasers have severally agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Representatives
request upon notice to the Company not later than one full business day prior to
the Closing Date (as defined below), shall be delivered by or on behalf of the
Company to the Representatives for the respective accounts of the Initial
Purchasers, with any transfer taxes payable in connection with the transfer of
the Notes to the Initial Purchasers duly paid, against payment by or on behalf
of the Initial Purchasers of the Purchase Price therefor by wire transfer in
Federal or other funds immediately available to the account of the Company. Such
delivery of and payment for the Notes shall be made at the offices of Mayer,
Brown, Rowe & Maw LLP ("Counsel for the Initial Purchasers"), 1675

                                      -12-
<PAGE>

Broadway, New York, NY 10019 at 10:00 A.M., New York City time, on April 27,
2005, or at such other place, time or date as the Representatives and the
Company may agree upon, such time and date of delivery against payment being
herein referred to as the "Closing Date". The Company will make such certificate
or certificates for the Notes available for examination by the Initial
Purchasers at the New York, New York offices of Counsel for the Initial
Purchasers not later than 10:00 A.M., New York City time on the business day
prior to the Closing Date.

      3. Offering of the Notes and the Initial Purchasers' Representations and
Warranties. Each of the Initial Purchasers, severally and not jointly,
represents and warrants to and agrees with the Company that:

        (a) It is a qualified institutional buyer as defined in Rule 144A under
   the Securities Act (a "QIB").

        (b) It will solicit offers for such Notes only from, and will offer such
   Notes only to, persons that it reasonably believes to be (A) in the case
   of offers inside the United States, QIBs (B) in the case of offers outside
   the United States, to persons other than U.S. persons ("foreign
   purchasers", which term shall include dealers or other professional
   fiduciaries in the United States acting on a discretionary basis for
   foreign beneficial owners (other than an estate or trust)) in reliance
   upon Regulation S under the Securities Act that, in each case, in
   purchasing such Notes are deemed to have represented and agreed as
   provided in the Final Memorandum under the caption "Notice to Investors".

        (c) It will not offer or sell the Notes using any form of general
   solicitation or general advertising (within the meaning of Regulation D)
   or in any manner involving a public offering within the meaning of Section
   4(2) under the Securities Act.

        (d) With respect to offers and sales outside the United States:

            (i) at or prior to the confirmation of any sale of any Notes sold in
      reliance on Regulation S, it will have sent to each distributor, dealer or
      other person receiving a selling concession, fee or other remuneration
      that purchases Notes from it during the distribution compliance period (as
      defined in Regulation S) a confirmation or notice substantially to the
      following effect:

                  "The Notes covered hereby have not been registered under the
            U.S. Securities Act of 1933, as amended (the "Securities Act"), and
            may not be offered or sold within the United States or to, or for
            the account or benefit of, U.S. persons, (i) as part of their
            distribution at any time; or (ii) otherwise until 40 days after the
            later of the commencement of the offering of the Notes and April 27,
            2005, except in either case in accordance with Regulation S or Rule
            144A under the Securities Act. Terms used above have the meanings
            given to them by Regulation S."; and

            (ii) such Initial Purchaser has offered the Notes and will offer and
      sell the Notes (A) as part of its distribution at any time and (B)
      otherwise until 40 days after the later of the commencement of the
      offering and the Closing Date, only in accordance with

                                      -13-
<PAGE>

      Rule 903 of Regulation S or as otherwise permitted in Section 3(b);
      accordingly, such Initial Purchaser has not engaged nor will engage in any
      directed selling efforts (within the meaning of Regulation S) with respect
      to the Notes, and such Initial Purchasers has complied and will comply
      with the offering restrictions requirements of Regulation S.

      Terms used in this Section 3(d) have the meanings given to them by
      Regulation S.

      4. Covenants of the Company. The Company covenants and agrees with the
Initial Purchasers that:

        (a) The Company will prepare the Final Memorandum in the form approved
   by the Representatives and will not amend or supplement the Final
   Memorandum without first furnishing to the Representatives a copy of such
   proposed amendment or supplement or filing and will not use or file any
   amendment or supplement to which the Representatives may reasonably
   object.

        (b) The Company will furnish to the Initial Purchasers and to Counsel
   for the Initial Purchasers prior to 5:00 p.m. New York City time on the
   business day after the date of this Agreement and during the period
   referred to in paragraph (c) below, without charge, as many copies of the
   Final Memorandum and any amendments and supplements thereto as they
   reasonably may request.

        (c) At any time prior to the completion of the distribution of the Notes
   by the Initial Purchasers, if any event occurs or condition exists as a
   result of which the Final Memorandum, as then amended or supplemented,
   would include any untrue statement of a material fact or omit to state any
   material fact necessary to make the statements therein, in light of the
   circumstances under which they were made, not misleading, or if it should
   be necessary to amend or supplement the Final Memorandum to comply with
   applicable law, the Company will promptly (i) notify the Initial
   Purchasers of the same; (ii) subject to the requirements of paragraph (a)
   of this Section 4, prepare and provide to the Initial Purchasers, at its
   own expense, an amendment or supplement to the Final Memorandum so that
   the statements in the Final Memorandum as so amended or supplemented will
   not include any untrue statement of a material fact or omit to state any
   material fact necessary to make the statements therein, in light of the
   circumstances under which they were made, not misleading or so that the
   Final Memorandum, as amended or supplemented, will comply with applicable
   law; and (iii) supply any supplemented or amended Final Memorandum to the
   Initial Purchasers and Counsel for the Initial Purchasers, without charge,
   in such quantities as may be reasonably requested.

        (d) The Company will (i) qualify the Notes and the Guarantees for sale
   by the Initial Purchasers under the laws of such jurisdictions as the
   Representatives may designate and (ii) maintain such qualifications for so
   long as required for the sale of the Notes by the Initial Purchasers. The
   Company will promptly advise the Initial Purchasers of the receipt by the
   Company of any notification with respect to the suspension of the
   qualification of the Notes for sale in any jurisdiction or the initiation
   or threatening of any proceeding for such purpose.

                                      -14-
<PAGE>

        (e) At any time prior to the completion of the distribution of the Notes
   by the Initial Purchasers, the Company will deliver to the Initial
   Purchasers such additional information concerning the business and
   financial condition of the Company or Hollywood as the Initial Purchasers
   may from time to time request and whenever the Company or Hollywood or any
   of their subsidiaries publishes or makes available to the public (by
   filing with any regulatory authority or securities exchange or by
   publishing a press release or otherwise) any information that would
   reasonably be expected to be material in the context of the issuance of
   the Notes under this Agreement, shall promptly notify the Initial
   Purchasers as to the nature of such information or event. The Company will
   likewise notify the Initial Purchasers of (i) any decrease in the rating
   of the Notes or any other debt securities of the Company by any nationally
   recognized statistical rating organization (as defined in Rule 436(g)(2)
   under the Securities Act) or (ii) any notice or public announcement given
   of any intended or potential decrease in any such rating or that any such
   securities rating agency has under surveillance or review, with possible
   negative implications, its rating of the Notes, as soon as the Company
   becomes aware of any such decrease, notice or public announcement.

        (f) The Company will not, and will not permit any of its Affiliates to,
   resell any of the Notes that have been acquired by any of them, other than
   pursuant to an effective registration statement under the Securities Act
   or in accordance with Rule 144 under the Securities Act.

        (g) Except as contemplated in the Registration Rights Agreement, none of
   the Company or any of its Affiliates, nor any person acting on its or
   their behalf (other than the Initial Purchasers or any of their respective
   Affiliates, as to which no statement is made) will, directly or
   indirectly, make offers or sales of any security, or solicit offers to buy
   any security, under circumstances that would require the registration of
   the Notes under the Securities Act.

        (h) None of the Company or any of its Affiliates, nor any person acting
   on its or their behalf (other than the Initial Purchasers or any of their
   respective Affiliates, as to which no statement is made), will solicit any
   offer to buy or offer to sell the Notes by means of any form of general
   solicitation or general advertising (within the meaning of Regulation D)
   or in any manner involving a public offering within the meaning of Section
   4(2) of the Securities Act.

        (i) None of the Company or any of its Affiliates, nor any person acting
   on its or their behalf (other than the Initial Purchasers or any of their
   respective Affiliates, as to which no statement is made), will engage in
   any directed selling efforts (within the meaning of Regulation S) with
   respect to the Notes, and each of them will comply with the offering
   restrictions requirements of Regulation S.

        (j) None of the Company or any of its Affiliates, nor any person acting
   on its or their behalf (other than the Initial Purchasers or any of their
   respective Affiliates, as to which no statement is made), will sell, offer
   for sale or solicit offers to buy or otherwise negotiate in respect of any
   securities of the same or a similar class as the Notes, other than the
   Notes offered or sold to the Initial Purchasers hereunder, in a manner
   which would require the registration under the Securities Act of the
   Notes.

                                      -15-
<PAGE>

        (k) So long as any of the Notes are "restricted securities" within the
   meaning of Rule 144(a)(3) under the Securities Act, at any time that the
   Company is not then subject to Section 13 or 15(d) of the Exchange Act,
   the Company will provide at its expense to each holder of the Notes and to
   each prospective purchaser (as designated by such holder) of the Notes,
   upon the request of such holder or prospective purchaser, any information
   required to be provided by Rule 144A(d)(4) under the Securities Act. (This
   covenant is intended to be for the benefit of the holders, and the
   prospective purchasers designated by such holders from time to time, of
   the Notes.)

        (l) The Company will apply the net proceeds from the sale of the Notes
   as set forth under "Use of Proceeds" in the Final Memorandum.

        (m) Until completion of the distribution, neither the Company nor any of
   its Affiliates will take, directly or indirectly, any action designed to
   cause or result in, or which has constituted or which might reasonably be
   expected to cause or result in, stabilization or manipulation of the price
   of any security of the Company to facilitate the sale or resale of the
   Notes.

        (n) For so long as any Notes are outstanding, the Company and its
   subsidiaries will conduct its operations in a manner that will not subject
   the Company or any subsidiary to registration as an investment company
   under the Investment Company Act.

        (o) Each Note will bear a legend substantially as set forth in the Final
   Memorandum under the caption "Notice to Investors" until such legend
   shall no longer be necessary or advisable because the Notes are no
   longer subject to the restrictions on transfer described therein.

        (p) Except as contemplated by the Registration Rights Agreement, the
   Company will not, directly or indirectly, offer, sell, contract to
   sell or otherwise dispose of any debt securities of the Company or
   warrants to purchase debt securities of the Company substantially
   similar to the Notes (other than the Notes offered pursuant to this
   Agreement) for a period of 90 days after the date hereof, without
   the prior written consent of Wachovia Capital Markets, LLC.

        (q) The Company will, promptly after it has notified the Representatives
   of any intention by the Company to treat the Transactions as being a
   "reportable transaction" (within the meaning of Treasury Regulation
   Section 1.6011-4), deliver a duly completed copy of IRS Form 8886 or
   any successor form to the Representatives.

      5. Expenses. (a) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company and the
Guarantors (subject to the last sentence of Section 8 and the proviso in Section
9(b) of this Agreement) will pay or cause to be paid all expenses incident to
the performance of its obligations under this Agreement, including: (i) the
fees, disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the issuance and sale of the Notes and all other
fees or expenses in connection with the preparation of each Memorandum and all
amendments and supplements thereto, including all printing costs associated
therewith, and the delivery of copies

                                      -16-
<PAGE>

thereof to the Initial Purchasers, (ii) all costs and expenses related to the
transfer and delivery of the Notes to the Initial Purchasers, including any
transfer or other taxes payable thereon, (iii) the cost of producing any Blue
Sky or legal investment memorandum in connection with the offer and sale of the
Notes under state securities laws and all expenses in connection with the
qualification of the Notes for offer and sale under state securities laws as
provided in Section 4(d) hereof, including filing fees and the reasonable fees
and disbursements of Counsel for the Initial Purchasers in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of the
Notes, (v) all document production charges and expenses of counsel to the
Initial Purchasers (but not including their fees for professional services) in
connection with the preparation of this Agreement, (vi) the fees and expenses,
if any, incurred in connection with the admission of the Notes for trading in
PORTAL or any appropriate market system, (vii) the costs and charges of the
Trustee and any transfer agent, registrar or depositary, (viii) the cost of the
preparation, issuance and delivery of the Notes, (ix) all costs and expenses
relating to investor presentations, including any "road show" presentations
undertaken in connection with the marketing of the offering of the Notes,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations, travel and lodging expenses of the
officers of the Company and any such consultants, and one-half of the cost of
any aircraft chartered in connection with the road show, and (x) all other costs
and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.

      (b) If the sale of the Notes provided for herein is not consummated
   because any condition to the obligations of the Initial Purchasers set
   forth in Section 6 hereof is not satisfied, because this Agreement is
   terminated pursuant to Section 9 hereof or because of any failure, refusal
   or inability on the part of the Company to perform all obligations and
   satisfy all conditions on its part to be performed or satisfied hereunder
   other than by reason of a default by any of the Initial Purchasers, the
   Company will reimburse the Initial Purchasers upon demand for all
   reasonable documented out-of-pocket expenses (including counsel fees and
   disbursements) that shall have been incurred by them in connection with
   the proposed purchase and sale of the Notes; provided, however, that the
   obligations of the Company under this Section 5(b) shall be in addition
   to, and not in place of, the provisions for expense reimbursement set
   forth in the Amended and Restated Fee Letter, dated January 9, 2005, among
   and between Wachovia Bank, National Association; Wachovia Capital
   Investments, Inc.; Wachovia Capital Markets, LLC; Merrill Lynch Capital
   Corporation; and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

     6. Conditions to the Initial Purchaser's Obligations. The obligations of
the several Initial Purchasers to purchase and pay for the Notes shall be
subject to the accuracy of the representations and warranties of the Company and
each Guarantor in Section 1 hereof, in each case as of the date hereof and as of
the Closing Date, as if made on and as of the Closing Date, to the accuracy of
the statements of the Company's officers made pursuant to the provisions hereof,
to the performance by the Company of its covenants and agreements hereunder and
to the following additional conditions:

      (a) The Initial Purchasers shall have received the following opinions,
   each in form and substance satisfactory to the Initial Purchasers and
   dated the Closing Date:

                                      -17-
<PAGE>

            (i) An opinion of Alston & Bird LLP ("Counsel for the Company") to
   the effect set forth in Exhibit A hereto;

            (ii) An opinion of Troy & Gould, P.C. to the effect set forth in
   Exhibit B hereto;

            (iii) An opinion of the General Counsel of the Company to the effect
   set forth in Exhibit C hereto; and

            (iv) An opinion of Stoel Rives LLP, counsel for Hollywood to the
   effect set forth in Exhibit D hereto.

      (b) The Initial Purchasers shall have received an opinion, dated the
   Closing Date, of Counsel for the Initial Purchasers, with respect to
   the issuance and sale of the Notes and such other related matters as
   the Initial Purchasers may reasonably require, and the Company shall
   have furnished to such counsel such documents as it may reasonably
   request for the purpose of enabling it to pass upon such matters. In
   rendering such opinion, such counsel may rely as to certain matters
   of law upon the opinions referred to in Section 6(a).

      (c) The Initial Purchasers shall have received on each of the date hereof
   and the Closing Date a letter, dated the date hereof or the Closing
   Date, as the case may be, in form and substance satisfactory to the
   Initial Purchasers and Counsel for the Initial Purchasers, from
   Ernst & Young LLP and PricewaterhouseCoopers LLP, independent
   registered public accounting firms, containing statements and
   information of the type ordinarily included in accountants' "comfort
   letters" to underwriters with respect to the financial statements
   and certain financial information contained in each Memorandum,
   including, without limitation, pro forma financial information;
   provided that the letter shall use a "cut-off date" within three
   days of the date of such letter. References to the Final Memorandum
   in this paragraph (c) with respect to either letter referred to
   above shall include any amendment or supplement thereto at the date
   of such letter.

      (d) (i) None of the Company nor any of its subsidiaries nor Hollywood or
   any of its subsidiaries, shall have sustained, since the date of
   their respective latest audited financial statements included in the
   Final Memorandum (exclusive of any amendment or supplement thereto),
   any loss or interference with their respective businesses or
   properties from fire, explosion, flood, accident or other calamity,
   whether or not covered by insurance, or from any labor dispute or
   court or governmental action, order or decree (whether domestic or
   foreign) otherwise than as set forth in the Final Memorandum
   (exclusive of any amendment or supplement thereto); and (ii) since
   the respective dates as of which information is given in the
   Preliminary Memorandum or the Final Memorandum, there shall not have
   been any change in the capital stock (other than issuances pursuant
   to employee benefit plans) or long-term debt of the Company and its
   subsidiaries or Hollywood or any of its subsidiaries except as
   included in the Final Memorandum (exclusive of any amendment or
   supplement thereto), or any change in or effect on or any
   development having a prospective change in or effect on the
   business, operations, properties, assets, liabilities, stockholders'
   equity, earnings, condition (financial or otherwise), results of
   operations or management of the Company and its subsidiaries or
   Hollywood or any of its subsidiaries, whether or not in the ordinary
   course of business,

                                      -18-
<PAGE>

   otherwise than as set forth in each such Memorandum (exclusive of
   any amendment or supplement thereto), the effect of which, in any
   such case described in clause (i) or (ii), is, in the sole judgment
   of the Representatives, so material and adverse as to make it
   impracticable or inadvisable to market the Notes on the terms and in
   the manner described in the Final Memorandum (exclusive of any
   amendment or supplement thereto).

      (e) None of the information set forth in the sections of the Final
   Memorandum entitled "Use of Proceeds" and "Management's Discussion
   and Analysis of Financial Conditions and Results of Operations -
   Movie Gallery - Related Party Transactions" shall have changed, nor
   shall there have been any change in the information with respect to
   the directors and officers of the Company from what is set forth in
   the section of the Final Memorandum entitled "Business - Movie
   Gallery - Management", if the effect of any such change,
   individually or in the aggregate, in the sole judgment of the
   Representatives makes it impracticable or inadvisable to proceed
   with the offering or the delivery of the Notes on the terms and in
   the manner described in the Final Memorandum, exclusive of any
   amendment or supplement thereto.

      (f) The Initial Purchasers shall have received a certificate, dated the
   Closing Date and in form and substance satisfactory to the Initial
   Purchasers, of the Chief Executive Officer and the Chief Financial
   Officer of the Company as to the accuracy of the representations and
   warranties of the Company in this Agreement at and as of the Closing
   Date; that the Company has performed all covenants and agreements
   and satisfied all conditions on its part to be performed or
   satisfied at or prior to the Closing Date; and as to the matters set
   forth in Sections 6(d) and (e).

      (g) The Initial Purchasers shall have received a certificate, dated the
   Closing Date and in form and substance satisfactory to the Initial
   Purchasers, of the Chief Executive Officer and the Chief Financial
   Officer of Hollywood (i) as to the accuracy of the representations
   and warranties relating to Hollywood in this Agreement at and as of
   the Closing Date; (ii) as to the matters set forth in Sections 6(d)
   relating to Hollywood; and (iii) to the effect that the statements
   about Hollywood (including the financial statements of Hollywood)
   included in the Preliminary Offering Memorandum and the Final
   Offering Memorandum do not contain any untrue statement of material
   fact or omit to state any material fact necessary to make the
   statements made therein, in light of the circumstances under which
   they were made, not misleading.

      (h) The Notes shall have received initial ratings of not less than B- by
   Standard & Poor's and B2 by Moody's, and, subsequent to the date
   hereof, there shall not have been any decrease in the rating of the
   Notes by any "nationally recognized statistical rating agency", as
   that term is defined by the Commission for purposes of Rule
   436(g)(2) under the Securities Act, and no such organization shall
   have publicly announced that it has under surveillance or review its
   ratings of the Securities or any notice or public announcement given
   of any intended or potential decrease in any such rating or that any
   such securities rating agency has under surveillance or review, with
   possible negative implications, its rating of the Notes.

      (i) The Notes shall have been designated for trading on PORTAL.

                                      -19-
<PAGE>

      (j) The Notes shall be eligible for clearance and settlement through the
   Depository Trust Company, Clearstream Banking and the Euroclear
   System.

      (k) On or before the Closing Date, the Initial Purchasers and Counsel for
   the Initial Purchasers shall have received such further
   certificates, documents or other information as they may have
   reasonably requested from the Company or Hollywood.

      (l) Simultaneously with the Closing, the Company shall have consummated
   that certain senior credit facility described under the caption
   "Description of New Senior Credit Facility" in the Final Memorandum.

      (m) Simultaneously with the Closing, the Company shall have consummated
   that certain merger with Hollywood as described in the Final
   Memorandum.

      7. Indemnification and Contribution. (a) The Company and each Guarantor
(subject to the last sentence of Section 8 and the proviso in Section 9(b) of
this Agreement), jointly and severally, agrees to indemnify and hold harmless
each Initial Purchaser, its affiliates, directors and officers and each person,
if any, who controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) any Initial Purchaser against any losses,
claims, damages or liabilities, joint or several, to which such Initial
Purchaser or such other person may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Preliminary Memorandum or the Final Memorandum or
any amendment or supplement thereto; or (ii) the omission or alleged omission to
state in the Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto a material fact necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading, and will
reimburse, as incurred, each Initial Purchaser and each such other person for
any legal or other expenses reasonably incurred by such Initial Purchaser or
such other person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and the
Guarantors will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Memorandum, the Final Memorandum or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by such Initial Purchasers through the Representatives
specifically for use therein as set forth in Section 11 hereof; and provided
further, that the foregoing indemnity agreement (except for the expense
reimbursement provisions) with respect to the Preliminary Memorandum shall not
inure to the benefit of any Initial Purchaser who failed to deliver a Final
Memorandum, provided by the Company to the Initial Purchasers in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
Closing Date, to the person asserting any losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Memorandum, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which they were made, if a court of competent
jurisdiction, in a decision not subject to further appeal, determines that (i)
such material misstatement or omission was cured in the Final Memorandum, (ii)
such Final Memorandum

                                      -20-
<PAGE>

was required by law to be delivered at or prior to the written confirmation of
sale to such person and (iii) delivery of such Final Memorandum would have
precluded such person from recovering for such losses, claims, damages and
liabilities.

      (b) Each Initial Purchaser, severally and not jointly, will indemnify and
   hold harmless the Company and the Guarantors and their respective
   affiliates, directors, officers, and each person, if any, who
   controls any of the Company or the Guarantors within the meaning of
   Section 15 of the Securities Act or Section 20 of the Exchange Act
   against any losses, claims, damages or liabilities to which the
   Company, the Guarantors, any such affiliates, directors or officers
   or such controlling person may become subject, insofar as such
   losses, claims, damages or liabilities (or actions in respect
   thereof) arise out of or are based upon (i) any untrue statement or
   alleged untrue statement of any material fact contained in the
   Preliminary Memorandum or the Final Memorandum or any amendment or
   supplement thereto, or (ii) the omission or alleged omission to
   state in the Preliminary Memorandum or the Final Memorandum or any
   amendment or supplement thereto a material fact necessary to make
   the statements therein, in the light of the circumstances under
   which they were made, not misleading, in each case to the extent,
   but only to the extent, that such untrue statement or alleged untrue
   statement or omission or alleged omission was made in reliance upon
   and in conformity with written information furnished to the Company
   by the Initial Purchasers through the Representatives specifically
   for use therein as set forth in Section 11 hereof and, subject to
   the limitation set forth immediately preceding this clause, will
   reimburse as incurred, any legal or other expenses reasonably
   incurred by the Company or the Guarantors or any such affiliates,
   directors or officers or such controlling person in connection with
   investigating, defending against or appearing as a third-party
   witness in connection with, any such loss, claim, damage, liability
   or action in respect thereof.

      (c) As soon as reasonably practicable, after receipt by any person to whom
   indemnity may be available under this Section 7 (the "indemnified
   party") of legal service of the commencement of any action, such
   indemnified party will, if a claim in respect thereof is to be made
   against any person from whom indemnity may be sought under this
   Section 7 (the "indemnifying party"), notify such indemnifying party
   of the commencement thereof; but the failure to so notify such
   indemnifying party will not relieve such indemnifying party from any
   liability which it may have to such indemnified party otherwise than
   under this Section 7 and will affect its liability under this
   Section 7 only to the extent it did not otherwise learn of such
   action and such failure results in the forfeiture by the
   indemnifying party of substantial rights and defenses, and in no
   event will such failure affect the obligation of the indemnifying
   party to reimburse the expenses of the indemnified party as set
   forth in this section. In case any such action is brought against
   any indemnified party, and such indemnified party notifies the
   relevant indemnifying party of the commencement thereof, such
   indemnifying party will be entitled to participate therein and, to
   the extent that it may wish, to assume the defense thereof, jointly
   with any other indemnifying party similarly notified, with counsel
   satisfactory to such indemnified party; provided, however, that if
   the named parties in any such action (including impleaded parties)
   include both the indemnified party and the indemnifying party and
   the indemnified party shall have concluded, based on advice of
   outside counsel, that there may be one or more legal defenses
   available to it and/or other indemnified parties which are different
   from or additional to those available to the indemnifying party or
   that representation of both

                                      -21-
<PAGE>

   parties by the same counsel would be inappropriate due to actual or
   potential differing interests between them, the indemnifying party
   shall not have the right to direct the defense of such action on
   behalf of such indemnified party or parties and such indemnified
   party or parties shall have the right to select a single national
   counsel and one local firm in each jurisdiction to defend such
   action on behalf of such indemnified party or parties. After notice
   from an indemnifying party to an indemnified party of its election
   so to assume the defense thereof and approval by such indemnified
   party of counsel appointed to defend such action, such indemnifying
   party will not be liable to such indemnified party under this
   Section 7 for any legal or other expenses, other than reasonable
   costs of investigation, subsequently incurred by such indemnified
   party in connection with the defense thereof, unless (i) such
   indemnified party shall have employed separate counsel in accordance
   with the proviso to the immediately preceding sentence or (ii) such
   indemnifying party does not promptly retain counsel satisfactory to
   such indemnified party or (iii) such indemnifying party has
   authorized the employment of counsel for such indemnified party at
   the expense of the indemnifying party. After such notice from an
   indemnifying party to an indemnified party, such indemnifying party
   will not be liable for the costs and expenses of any settlement of
   such action effected by such indemnified party without the written
   consent of such indemnifying party. Notwithstanding the foregoing
   sentence, if at any time an indemnified party shall have requested
   an indemnifying party to reimburse the indemnified party for fees
   and expenses of counsel as contemplated by (i), (ii) or (iii) of the
   third sentence of this paragraph, the indemnifying party agrees that
   it shall be liable for any settlement of any proceeding effected
   without its written consent if (x) such settlement is entered into
   more than 30 days after receipt by such indemnifying party of the
   aforesaid request and (y) such indemnifying party shall not have
   reimbursed the indemnified party in accordance with such request
   prior to the date of such settlement. An indemnifying party will
   not, without the prior written consent of the indemnified party,
   settle or compromise or consent to the entry of any judgment in any
   pending or threatened claim, action, suit or proceeding in respect
   of which indemnification may be sought hereunder (whether or not the
   indemnified party or any other person that may be entitled to
   indemnification hereunder is a party to such claim, action, suit or
   proceeding) unless such settlement, compromise or consent includes
   an unconditional release of the indemnified party and such other
   persons from all liability arising out of such claim, action, suit
   or proceeding.

      (d) In circumstances in which the indemnity agreement provided for in the
   preceding paragraphs of this Section 7 is unavailable or
   insufficient, for any reason, to hold harmless an indemnified party
   in respect of any losses, claims, damages or liabilities (including,
   without limitation, any legal or other expenses incurred in
   connection with defending or investigating any action or claim) (or
   actions in respect thereof) ("Losses"), the Company and the
   Guarantors (subject to the last sentence of Section 8 and the
   proviso in Section 9(b) of this Agreement), on the one hand, and the
   Initial Purchasers, on the other, in order to provide for just and
   equitable contribution, agree to contribute to the amount paid or
   payable by such indemnified party as a result of such Losses to
   which the Company and the Guarantors, on the one hand, and the
   Initial Purchasers, on the other, may be subject, (i) in such
   proportion as is appropriate to reflect the relative benefits
   received by the Company and the Guarantors, on the one hand, and the
   Initial Purchasers, on the other, from the offering of the Notes or
   (ii) if the allocation provided by the foregoing clause (i) is
   unavailable for any

                                      -22-
<PAGE>

   reason, not only such relative benefits but also the relative fault
   of the Company and the Guarantors, on the one hand, and the Initial
   Purchasers, on the other, in connection with the statements or
   omissions or alleged statements or omissions that resulted in such
   Losses. The relative benefits received by the Company and the
   Guarantors, on the one hand, and the Initial Purchasers, on the
   other, shall be deemed to be in the same proportion as the total
   proceeds from the offering (before deducting expenses) received by
   the Company bear to the total discounts and commissions received by
   the Initial Purchasers from the Company in connection with the
   purchase of the Notes hereunder as set forth in the Final
   Memorandum. The relative fault of the parties shall be determined by
   reference to, among other things, whether the untrue or alleged
   untrue statement of a material fact or the omission or alleged
   omission to state a material fact relates to information supplied by
   the Company, the Guarantors or the Initial Purchasers, the parties'
   intent, relative knowledge, access to information and opportunity to
   correct or prevent such statement or omission, and any other
   equitable considerations appropriate in the circumstances. The
   Company, the Guarantors and the Initial Purchasers agree that it
   would not be just and equitable if contribution were determined by
   pro rata allocation or by any other method of allocation (even if
   the Initial Purchasers were treated as one entity for such purpose)
   that does not take into account the equitable considerations
   referred to above. Notwithstanding any other provision of this
   paragraph (d), no Initial Purchaser shall be obligated to make
   contributions hereunder that in the aggregate exceed the total
   underwriting discounts and commissions received by such Initial
   Purchaser from the Company in connection with the purchase of the
   Notes hereunder, and no person guilty of fraudulent
   misrepresentation (within the meaning of Section 11(f) of the
   Securities Act) shall be entitled to contribution from any person
   who was not guilty of such fraudulent misrepresentation. The Initial
   Purchasers' respective obligations to contribute hereunder are
   several in proportion to their respective obligations to purchase
   Notes as set forth on Schedule I hereto and not joint. For purposes
   of this paragraph (d), each person, if any, who controls an Initial
   Purchaser within the meaning of Section 15 of the Securities Act or
   Section 20 of the Exchange Act and each other person listed in
   Section 7(a) hereof shall have the same rights to contribution as
   such Initial Purchaser, and each affiliate, director or officer of
   the Company or any Guarantor and each person, if any, who controls
   the Company within the meaning of Section 15 of the Securities Act
   or Section 20 of the Exchange Act, shall have the same rights to
   contribution as the Company and the Guarantors.

      (e) The obligations of the Company and the Guarantors under this Section 7
   shall be in addition to any obligations or liabilities which the
   Company and the Guarantors may otherwise have and the obligations of
   the respective Initial Purchasers under this Section 7 shall be in
   addition to any obligations or liabilities which the Initial
   Purchasers may otherwise have.

    8. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, the Guarantors,
their respective officers, and the several Initial Purchasers set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the Guarantors, their
respective officers or directors or any controlling person referred to in
Section 7 hereof or any Initial Purchaser and (ii) delivery of and payment for
the Notes. The respective agreements, covenants, indemnities

                                      -23-
<PAGE>

and other statements set forth in Sections 5 and 7 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement. Notwithstanding any other provision of this Agreement, the respective
agreements, covenants, indemnities and other statements of the Hollywood
Guarantors and their respective officers set forth in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement, including but
not limited to the agreements, covenants, indemnities and other statements set
forth in Sections 5 and 7 of this Agreement, shall immediately terminate and be
of no further force or effect, and the Hollywood Guarantors and their respective
officers shall have no liability with respect to this Agreement, if the merger
between an affiliate of the Company and Hollywood, as described in the Final
Memorandum, is not completed.

    9.Termination. (a) The Representatives may terminate this Agreement with
respect to the Notes by notice to the Company at any time on or prior to the
Closing Date in the event that (i) the Company shall have failed, refused or
been unable to perform in any material respect all obligations and satisfy in
any material respect all conditions on its part to be performed or satisfied
hereunder at or prior thereto or if, at or prior to the Closing Date (ii)
trading in securities generally on the New York Stock Exchange, the NASDAQ
National Market or in the over-the-counter market, or trading in any securities
of the Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum or maximum prices shall have been established on any
such exchange or market; (iii) there has been a material disruption in
commercial banking or securities settlement, payment or clearance services in
the United States; (iv) a banking moratorium shall have been declared by New
York, North Carolina or United States authorities or (v) there shall have been
(A) an outbreak or escalation of hostilities between the United States and any
foreign power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States, (C) the occurrence of any other calamity
or crisis involving the United States or (D) any change in general economic,
political or financial conditions which has an effect on the U.S. financial
markets or the international financial markets that, in the case of any event
described in this clause (v), in the sole judgment of the Representatives, makes
it impracticable or inadvisable to proceed with the offer, sale and delivery of
the Notes as disclosed in the Preliminary Memorandum or the Final Memorandum,
exclusive of any amendment or supplement thereto.

        (b) Termination of this Agreement pursuant to this Section 9 shall be
   without liability of any party to any other party except as provided in
   Sections 5 and 7 hereof; provided, however, that the Hollywood Guarantors
   shall be entirely without liability under this Agreement in the event of
   such termination.

      10. Defaulting Initial Purchasers. If, on the Closing Date, any Initial
Purchaser defaults in the performance of its obligations under this Agreement,
the non-defaulting Initial Purchasers shall be obligated to purchase the Notes
that such defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase on the Closing Date (the "Remaining Notes") in the respective
proportions that the principal amount of the Notes set opposite the name of each
non-defaulting Initial Purchaser in Schedule I hereto bears to the principal
amount of the Notes set opposite the names of all the non-defaulting Initial
Purchasers in Schedule I hereto; provided, however, that the non-defaulting
Initial Purchasers shall not be obligated to purchase any of the Notes on the
Closing Date if the total principal amount of Notes which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase on such date
exceeds 10% of the

                                      -24-
<PAGE>

total principal amount of Notes to be purchased on the Closing Date, and no
non-defaulting Initial Purchaser shall be obligated to purchase more than 110%
of the principal amount of Notes that it agreed to purchase on the Closing Date
pursuant to this Agreement. If the foregoing maximums are exceeded, the
non-defaulting Initial Purchasers, or those other purchasers satisfactory to the
Initial Purchasers who so agree, shall have the right, but not the obligation,
to purchase, in such proportion as may be agreed upon among them, all the
Remaining Notes. If the non-defaulting Initial Purchasers or other Initial
Purchasers satisfactory to the Initial Purchasers do not elect to purchase the
Remaining Notes, this Agreement shall terminate without liability on the part of
any non-defaulting Initial Purchaser or the Company, except that the Company
will continue to be liable for the payment of expenses to the extent set forth
herein.

      Nothing contained in this Agreement shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company for damages caused by its
default. If other purchasers are obligated or agree to purchase the Notes of a
defaulting or withdrawing Initial Purchaser, the Company or the Representatives
may postpone the Closing Date for up to five full business days in order to
effect any changes in the Transaction Documents or in any other document or
arrangement that, in the opinion of counsel for the Company or Counsel for the
Initial Purchasers, may be necessary.

      11. Information Supplied by Initial Purchasers. The statements set forth
in the fourth paragraph (except for the first sentence thereof), sixth paragraph
(except for the first sentence thereof) and the seventh paragraph under the
heading "Plan of Distribution" in the Preliminary Memorandum and the Final
Memorandum, to the extent such statements relate to the Initial Purchasers,
constitute the only information furnished by the Initial Purchasers to the
Company for the purposes of Sections 1(a) and 7 hereof.

      12. Notices. All communications hereunder shall be in writing and, if sent
to any of the Initial Purchasers, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Wachovia Capital Markets,
LLC, One Wachovia Center, 301 South College Street, Charlotte, North Carolina
28288-0604, Attention: General Counsel, with a copy to Mayer, Brown, Rowe & Maw
LLP, 190 South LaSalle Street, Chicago, Illinois 60603, Attention: James J.
Junewicz and if sent to the Company, shall be delivered or sent by mail, telex
or facsimile transmission and confirmed in writing to the Company at Movie
Gallery, Inc., 900 West Main Street, Dothan, Alabama 36301, Attention: General
Counsel with a copy to Alston & Bird LLP, One Atlantic Center, 1201 West
Peachtree Street, Atlanta, Georgia 30309, Attention: Justin R. Howard.

      13. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the several Initial Purchasers, the Company and the Guarantors and
their respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the several Initial Purchasers, the Company and the Guarantors and
their respective successors and legal representatives, and for the benefit of no
other person, except that (i) the indemnities of the Company contained in
Section 7 of this Agreement shall also be for the benefit of any person or
persons who control any Initial Purchaser within the meaning of Section

                                      -25-
<PAGE>

15 of the Securities Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchasers contained in Section 7 of this Agreement
shall also be for the benefit of the affiliates, directors and officers of the
Company and the Guarantors, and any person or persons who control the Company or
the Guarantors within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act. No purchaser of Notes from any Initial Purchaser shall
be deemed a successor to such Initial Purchaser because of such purchase.

      14. Applicable Law. This Agreement shall be governed by the laws of the
State of New York.

      15. Consent to Jurisdiction and Service of Process. (a) All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, which
jurisdiction is non-exclusive.

        (b) Each party agrees that any service of process or other legal summons
   in connection with any Proceeding may be served on it by mailing a copy
   thereof by registered mail, or a form of mail substantially equivalent
   thereto, postage prepaid, addressed to the served party at its address as
   provided for in Section 12 hereof. Nothing in this Section shall affect
   the right of the parties to serve process in any other manner permitted by
   law.

      16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

            [The remainder of this page is intentionally left blank.]

                                      -26-
<PAGE>

      If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company, the Guarantors
and the Initial Purchasers.

                              Very truly yours,

                              MOVIE GALLERY, INC.

                              By: /s/ Joe Malugen
                                  --------------------------------
                                  Name: Joe T. Malugen
                                  Title: President and Chief Executive
                                         Officer

                              MOVIE GALLERY US, INC.

                              By: /s/ S. Page Todd
                                  --------------------------------
                                  Name: S. Page Todd
                                  Title: Executive Vice President
                                         and Secretary

                              MOVIE GALLERY FINANCE, INC.

                              By: /s/ S. Page Todd
                                  --------------------------------
                                  Name: S. Page Todd
                                  Title: Vice President and
                                         Assistant Secretary

                              MOVIE GALLERY LICENSING, INC.

                              By: /s/ S. Page Todd
                                  --------------------------------
                                  Name: S. Page Todd
                                  Title: Vice President and
                                         Assistant Secretary

                                     -27-
<PAGE>

                              MOVIE GALLERY SERVICES, INC.

                              By: /s/ S. Page Todd
                                 -----------------
                                  Name:  S. Page Todd
                                  Title: Executive Vice President
                                         and Secretary

                                      -28-
<PAGE>

                              M.G.A. Realty I, LLC

                              By: /s/ S. Page Todd
                                  ---------------------------------
                                  Name: S. Page Todd
                                  Title: Executive Vice President
                                         and Secretary

                              M.G. DIGITAL, LLC

                              By: /s/ S. Page Todd
                                  ---------------------------------
                                  Name: S. Page Todd
                                  Title: Executive Vice President
                                         and Secretary

                              MOVIE GALLERY ASSET MANAGEMENT, INC.

                              By: /s/ S. Page Todd
                                  ---------------------------------
                                  Name: S. Page Todd
                                  Title: President

                       HOLLYWOOD ENTERTAINMENT CORPORATION

                              By: /s/ Tim Price
                                  ---------------------------------
                                  Name: Timothy R. Price
                                  Title: Chief Financial Officer

                              HOLLYWOOD MANAGEMENT CORPORATION

                              By: /s/ Tim Price
                                  ---------------------------------
                                  Name: Timothy R. Price
                                  Title: Chief Financial Officer

                                      -29-
<PAGE>

Accepted as of the date hereof.

WACHOVIA CAPITAL MARKETS, LLC

MERRILL LYNCH, PIERCE, FENNER &
     SMITH INCORPORATED

CIBC WORLD MARKETS CORP.

Acting severally on behalf of themselves and the several Initial Purchasers
named in Schedule I hereto

By: WACHOVIA CAPITAL MARKETS, LLC

By: /s/ Ronald F. Bentien, Jr.
    ------------------------------
    Name: Ronald F. Bentien, Jr.
    Title: Vice President

By: MERRILL LYNCH, PIERCE, FENNER &
      SMITH INCORPORATED

By: /s/ David Turlin
    ------------------------------
    Name: David Turlin
    Title: Managing Director

By: CIBC WORLD MARKETS CORP.

By: /s/ Dean Decker
    ------------------------------
    Name: Dean J. Decker
    Title: Managing Director

                                      -30-
<PAGE>

[Note:  Exhibits A, B, C and D to be attached]

                                    Exh. A-1

<PAGE>

                                   SCHEDULE I

                               INITIAL PURCHASERS

<TABLE>
<CAPTION>
                                          Aggregate Principal
                                         Amount of Notes to be
Initial Purchaser                      Purchased from the Company
-------------------------------------  --------------------------
<S>                                    <C>
Wachovia Capital Markets, LLC                 $ 276,250,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated                                  $  32,500,000
CIBC World Markets Corp.                      $  16,250,000

      Total                                   $ 325,000,000
</TABLE>

                                      S-1
<PAGE>

                                  SCHEDULE II

                                   GUARANTORS

Movie Gallery US, Inc.

Movie Gallery Finance, Inc.

Movie Gallery Licensing, Inc.

Movie Gallery Services, Inc.

M.G.A. Realty I, LLC

M.G. Digital, LLC

Movie Gallery Asset Management, Inc.

Hollywood Entertainment Corporation

Hollywood Management Corporation

                                      S-2

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