Document:

PHOTOGEN TECHNOLOGIES, INC.

140 Union Square Drive

New Hope, PA 18938

 

August 18, 2003

 

Xmark
Fund, L.P. and Xmark Fund, Ltd.

152 West 57th
Street, 21st Floor

New York, New York 10019

Attention: Mitchell D. Kaye

 

Dear Mitch:

 

Reference is hereby made to the
(i) Going Forward Agreement, dated May 2, 2003 (the “Going Forward
Agreement”), by and among Photogen Technologies, Inc., a Nevada corporation
(“Photogen”), and Xmark Fund, L.P. and Xmark Fund, Ltd. (collectively,
“Xmark”), (ii) Secured Promissory Notes, dated June 18, 2003 (the
“Notes”), issued by Photogen to Xmark in the aggregate principal amount of
$2,500,000 (the “Note Amount”), (iii) Security Agreement, dated June 18,
2003 (the “General Security Agreement”), made by Photogen in favor of Xmark and
(iv) Patent and Trademark Security Agreement, dated June 18, 2003 (the “IP
Security Agreement” and together with the General Security Agreement, the
“Security Agreements”), made by Photogen in favor of Xmark.  Capitalized terms used but not defined
herein shall have the respective meanings ascribed thereto in the Going Forward
Agreement.

 

Pursuant to
Section 2(b)(i) of the Going Forward Agreement and the Notes, Photogen was
unconditionally obligated to pay Xmark $1,250,000 (the “Initial Principal
Payment”) in cash on August 5, 2003. 
As a result of Photogen’s failure to make the Initial Principal Payment
on August 5, 2003, Xmark delivered a written notice of default (the
“Default Notice”) to Photogen following the close of business on August 5,
2003 and exercised its right to accelerate all of the indebtedness evidenced by
the Notes.

 

In order to induce Xmark to
rescind the Default Notice, Photogen and Xmark hereby agree as follows:

 

1.                                       Payment
of the Notes; Effective Time.

 

(a)                                  Payment of the Initial Principal Payment.  Simultaneously with the execution and
delivery of this letter agreement to Xmark, Photogen shall deliver to Xmark the
Initial Principal Payment by wire transfer of immediately available funds to an
account(s) designated in writing by Xmark.

 

(b)                                 Payment of the Remaining Balance of the Note Amount.  This letter agreement shall not affect
or modify Photogen’s unconditional obligation to pay Xmark the remaining
principal balance of the Note Amount (i.e. $1,250,000)(the “Remaining 

 

 

Principal Amount”), as
evidenced by Section 2(b)(i)(B) of the Going Forward Agreement and the
Notes, on the earlier to occur of (i) November 3, 2003 (the “Second
Principal Date”) or (ii) the consummation of one or more institutional
financings resulting in aggregate gross proceeds to Photogen of at least
$18,000,000.  Notwithstanding clause (i)
of the preceding sentence, Photogen shall have the right to extend the Second
Principal Date by one month (i.e. from November 3, 2003 to
December 3, 2003) for a fee of $50,000 upon providing Xmark with written
notice of its election to so extend the Second Principal Date at least five (5)
days before the Second Principal Date, together with payment of such $50,000
fee by wire transfer of immediately available funds to Xmark.  Photogen shall have the right to continue to
extend the Second Principal Date for additional one month periods not to exceed
April 3, 2004 upon providing Xmark with written notice of its election to
do so at least five (5) days before the then existing Second Principal Date,
together with payment of (i) in the case of the extension of the Second
Principal Date from December 3, 2003 to January 3, 2004, a $50,000
fee and (ii) in the case of any additional one month extension of the Second
Principal Date, a $100,000 fee for each such monthly extension.  Any fees payable by Photogen to Xmark
pursuant to this Section 1(b) of this letter agreement shall be in
addition to and not in lieu or reduction of the Remaining Principal Amount or
any other sums due and owing to Xmark. 
Notwithstanding any extension of the Second Principal Date, the
Remaining Principal Amount shall be immediately due and payable upon
consummation of one or more institutional financings resulting in aggregate
gross proceeds to Photogen of at least $18,000,000.

 

(c)                                  Effective Time.  This letter agreement shall not take effect until
confirmation of receipt of the Initial Principal Payment by Xmark.  If the Initial Principal Payment has not
been received by Xmark by 11:59 p.m. on August 19, 2003, this letter
agreement shall, at Xmark’s option, be null and void and of no further force
and effect.

 

2.                                       Rescission
of the Default Notice.  Upon Xmark’s
receipt of the Initial Principal Payment, the Default Notice shall be rescinded
and of no force and effect, and Xmark acknowledges that it will not declare an
event of default with regard to any other past events of default as to which
Xmark has actual knowledge under the Notes, the Going Forward Agreement or the
Security Agreements (the “Other Existing Defaults”) so long as such Other
Existing Defaults do not continue following the date of this letter
agreement.  The foregoing shall in no
way impair Xmark’s right or ability to declare future events of default under
the Notes, the Going Forward Agreement, or the Security Agreements (including
the declaration of any future event of default due to the continuation of any
Other Existing Default following the date of this letter agreement) or be
deemed to be a waiver or forbearance of any rights or remedies of Xmark upon
the occurrence of a future event of default under the Notes, the Going Forward
Agreement, or the Security Agreements. 
Xmark represents that, as of the date of this letter agreement, it has
not filed a complaint with a court seeking to (i) foreclose on its liens or
(ii) exercise its rights or remedies as a creditor of Photogen, whether
pursuant to the Going Forward Agreement, the Security Agreements or otherwise.

 

2

 

3.                                       Registration
Requirements.

 

(a)                                  Registration Penalty Payments.  Within twenty (20) days of the execution
and delivery of this letter agreement to Xmark, Photogen shall pay to Xmark, in
cash or shares of Photogen Common Stock (valued at the Share Value), $26,248
(the “Outstanding Registration Penalty Payment”) which Outstanding Registration
Penalty Payment represents the amounts currently due and owing, and are in full
satisfaction of Photogen’s obligations, to Xmark pursuant to Section 7 of
the Going Forward Agreement. Following delivery of the Outstanding Registration
Penalty Payment to Xmark, no further registration penalty payments or Late
Registration Shares shall be due and owing to Xmark pursuant to Section 7
of the Going Forward Agreement.

 

(b)                                 Piggy-back Registration.  The obligation of Photogen pursuant to
Section 7(a) of the Going Forward Agreement to use its reasonable best
efforts to register the Registrable Securities for resale by Xmark by the
Registration Date is hereby null and void and of no further force and effect.  In lieu of the obligation of Photogen to use
its reasonable best efforts to register the Registrable Securities for resale,
Photogen shall provide Xmark with the following registration rights:

 

(i)                                     If
Photogen proposes to register Photogen Common Stock under the Securities Act
(excluding (x) that registration statement No. 333-104699 on Form S-1 and any
amendments thereto, with respect to shares of common stock issuable upon the
exercise of options held by Dr. Wolf, (y) a registration on Form S-8 or S-4, or
(z) a registration relating to Photogen Common Stock issuable upon exercise of
employee stock options or in connection with any employee benefit or similar
plan of Photogen), whether or not for sale for its own account, Photogen will
each such time give written notice to Xmark at least twenty (20) days prior to
the anticipated filing date of the registration statement relating to such
registration, which notice shall set forth Xmark’s rights under this
Section 3(b) and shall offer Xmark the opportunity to include in such
registration statement the number of shares of Photogen Common Stock held by
Xmark (the “Xmark Securities”) as Xmark may request (a “Piggyback
Registration”).  Upon the written
request of Xmark made within ten (10) days after the receipt of notice from
Photogen (which request shall specify the number of Xmark Securities intended
to be disposed of by Xmark), Photogen will use its reasonable best efforts to
effect the registration under the Securities Act of all Xmark Securities that
Photogen has been so requested to register by Xmark, to the extent requisite to
permit the disposition of the Xmark Securities.  If, at any time, after giving written notice of its intention to
register Photogen Common Stock pursuant to this paragraph and prior to the effective
date of the registration statement filed in connection with such registration,
Photogen shall determine for any reason not to register such securities,
Photogen shall give written notice to Xmark and, thereupon, shall be relieved
of its obligation to register any Xmark Securities in connection with such
registration.  Xmark acknowledges that
Photogen has informed it that Photogen’s Form 10-QSB for the period ended
June 30, 2003 will not be timely filed with the Securities Exchange
Commission.

 

3

 

(ii)                                  If
a Piggyback Registration involves an underwritten public offering, the number
of shares of Xmark Securities requested to be included in such an underwriting
by Xmark may be reduced (pro rata among Xmark and any other requesting
securityholders who request registration pursuant to piggy-back registration
rights, based upon the total number of shares so requested to be registered by
such requesting holders) if and to the extent that the managing underwriter
shall be of the opinion that such inclusion would adversely affect the
marketing of the securities to be sold by Photogen or the holders of securities
exercising demand registration rights.

 

(iii)                               In
connection with any offering involving an underwriting of shares of Photogen
Common Stock, Photogen shall not be required to include any of the Xmark
Securities in such underwriting unless Xmark accepts and becomes a party to the
terms of the underwriting as agreed upon between Photogen and the underwriters
selected by Photogen (or such parties exercising demand registration rights),
and then only in such quantity as the underwriters determine in their sole
discretion will not jeopardize the success of the offering.

 

(iv)                              In
the event any Xmark Securities are included in a registration statement under
this Section 3(b):

 

(A)                              To
the extent permitted by law, Photogen will indemnify and hold harmless Xmark,
any underwriter (as defined in the Securities Act) in a registration pursuant
to this Section 3(b) and each person, if any, who controls Xmark or the
underwriter within the meaning of the Securities Act or the 1934 Act against
any losses, claims, damages, or liabilities (joint or several) to which they
may become subject under the Securities Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a “Violation”): (i) any
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto; (ii) the omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading; or (iii) any violation by Photogen of the
Securities Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the 1934 Act or any state
securities law; and Photogen will pay to Xmark, the underwriter or controlling
person, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, Photogen shall shall not
be liable to Xmark, the underwriter or controlling person for any such loss,
claim, damage, liability, or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in

 

4

 

connection
with such registration by Xmark, the underwriter or controlling person; provided,
further  however, that the indemnity agreement contained in this
Section 3(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the written consent of Photogen, which written consent shall not be unreasonably
withheld or delayed.

 

(B)                                To
the extent permitted by law, Xmark will indemnify and hold harmless Photogen,
each of its directors, each of its officers who has signed the registration
statement, each person, if any, who controls Photogen within the meaning of the
Securities Act, any underwriter for Photogen in a registration pursuant to this
Section 3(b), any other person selling securities in such registration
statement and any controlling person of any such underwriter or person, against
any losses, claims, damages, or liabilities (joint or several) to which any of
the foregoing persons may become subject, under the Securities Act, the 1934
Act or other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by Xmark for use in connection with such registration; and Xmark will
pay, as incurred, any legal or other expenses reasonably incurred by any person
intended to be indemnified pursuant to this Section 3(b), in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained
in this Section 3(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the written consent of Xmark, which written consent shall not be
unreasonably withheld or delayed. 
Notwithstanding the foregoing, in no event shall the liability of Xmark
be greater in amount than the aggregate dollar amount of the proceeds (net of
all expenses paid by Xmark) received by Xmark upon the sale of Xmark Securities
included in the registration statement giving rise to such indemnification
obligation.

 

(C)                                Promptly
after receipt by an indemnified party under this Section 3(b)(iv) of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 3(b)(iv), deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain one
separate counsel, with the reasonable fees and

 

5

 

expenses to be
paid by the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding if counsel to such
indemnified party is reasonably of such opinion.  The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 3(b)(iv), but
the omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 3(b)(iv).

 

(D)                               If
the indemnification provided for in this Section 3(b)(iv) is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations.

 

(E)                                 Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in any underwriting agreement entered into in connection
with any underwritten public offering as provided above are in conflict with
the foregoing provisions, the provisions in the applicable underwriting
agreement shall control.

 

(F)                                 The
obligations of Photogen and Xmark under this Section 3(b)(iv) shall
survive the completion of any offering of Photogen Common Stock in a
registration statement under this Section 3(b), and otherwise.

 

4.                                       Security
Agreements.

 

(a)                                  The
parties hereby agree that, from and after receipt by Xmark of the Initial
Principal Payment, clause (11) of the definition of Event of Default (as
defined in the Security Agreements) shall be amended and restated in its
entirety to read as follows:

 

“The Grantor
shall pay all or any portion of any principal of, premium or interest on or any
amount payable in respect of any borrowed money indebtedness, whether upon the
maturity date, declaration of a default, event of default or acceleration of
the stated maturity of such borrowed money indebtedness (after the expiration
of any cure period

 

6

 

provided by agreements
governing the obligation) or otherwise, while the Note Amount remains
outstanding, except that the Grantor may make payments of borrowed money
indebtedness to Castle Creek Healthcare Investors, LLC, Brown Simpson Partners
I, L.P. and SDS Merchant Fund, L.P. provided that the Grantor shall pay to the
Secured Parties, simultaneously with each such payment of borrowed money
indebtedness, a percentage of the indebtedness then due and owing under the
Notes, which percentage shall equal the percentage of the borrowed money
indebtedness repaid by the Grantor.”

 

(b)                                 The
parties agree that the following new clause (13) shall be inserted into the
definition of Event of Default:

 

“The failure
by the Grantor to perform in any material respect any obligation of the Grantor
under the letter agreement, dated as of August 18, 2003, by and among
Grantor and the Secured Parties.”

 

(c)                                  The
definition of Obligations under the Security Agreements shall be expanded to
include all obligations and liabilities, whether now or hereafter existing, to
Xmark under this letter agreement and any and all claims relating to or arising
therefrom.

 

5.                                       Waiver
of Claims.  Photogen warrants and
represents to Xmark that its obligations under this letter agreement, the Going
Forward Agreement (including, without limitation, its obligations set forth in
Section 4 of the Going Forward Agreement), the Notes and the Security
Agreements are not subject to any credits, charges, claims, defenses or rights
of offset or deduction of any kind or character whatsoever; and Photogen
releases, waives and discharges Xmark from any and all claims and causes of
action, whether known or unknown and whether now existing or hereafter arising,
including without limitation, any usury claims, that have at any time been
owned, or that are hereafter owned, in tort or in contract by Photogen and that
arise out of any one or more circumstances or events that occurred prior to the
date of this letter agreement.

 

6.                                       No
Solicitation.  From and after the
date hereof and for so long as no Event of Default has occurred and is
continuing, Xmark shall not (i) solicit the submission of any proposal or offer
from any of the third parties (the “Prohibited Parties”) set forth in that
letter, dated of even date herewith (the “Side Letter”), from Photogen to Xmark
and acknowledged in writing by both parties with regard to the purchase and
sale of the Collateral (as defined in the Security Agreements) or the Notes or
(ii) actively engage in substantive negotiations with such Prohibited Parties
with regard to the purchase and sale of the Collateral or the Notes.  Notwithstanding anything herein to the
contrary, nothing in this letter agreement, the Going Forward Agreement, the
Notes or the Security Agreements shall prohibit Xmark from soliciting, selling,
or transferring its first priority security interest in the Collateral and the
liabilities and obligations due and owing to Xmark under this letter agreement,
the Notes, the Going Forward Agreement (including the Put Right) and the
Security Agreements other than to the Prohibited Parties; provided, that any
such solicitation activities are conducted with persons or entities that have
entered into a written agreement with Xmark (naming Photogen as a third party
beneficiary) in which such persons or entities agree not to take any of the
actions prohibited in the first sentence hereof.  Photogen

 

7

 

acknowledges that, prior to the
date hereof, Xmark has engaged in discussions with Amersham plc and Point
Biomedical Corporation concerning the purchase and sale of the Collateral
and/or the Notes.

 

7.                                       Acknowledgment
of Security Interest; Binding Effect of Documents.

 

(a)                                  Photogen
hereby acknowledges, confirms and agrees that Xmark has and shall continue to
have a valid, enforceable and perfected first-priority liens upon and security
interests in the Collateral.

 

(b)                                 Photogen
hereby acknowledges, confirms and agrees that: (i) each of the Going Forward
Agreement, the Notes and the Security Agreements are in full force and effect
as of the date hereof, (ii) the agreements and obligations of Photogen
contained in such documents and in this letter agreement constitute the legal,
valid and binding obligations of Photogen, enforceable against Photogen in
accordance with their respective terms (subject to bankruptcy, insolvency and
other similar laws generally affecting or relating to the enforceability of
creditors’ rights), and Photogen has no valid defense to the enforcement of
such obligations, (iii) this letter agreement does not release Photogen from
its obligations under the Going Forward Agreement (including, without
limitation, its obligations set forth in Section 4 of the Going Forward
Agreement), the Notes and the Security Agreements, except to the extent
expressly modified by the terms of this letter agreement and (iv) Xmark is and
shall be entitled to the rights, remedies and benefits provided for in the
Going Forward Agreement (including, without limitation, those rights, remedies
and benefits set forth in Section 4 of the Going Forward Agreement), the
Notes and the Security Agreements, except to the extent expressly modified by
the terms of this letter agreement.

 

8.                                       Notices.  All notices and other communications
required or permitted to be given pursuant to this letter agreement shall be in
writing signed by the sender, and shall be deemed duly given (a) on the date
delivered if personally delivered, (b) on the date sent by telecopier with
automatic confirmation by the transmitting machine showing the proper number of
pages were transmitted without error, (c) upon receipt by the receiving party
of any notice sent by registered or certified mail (first-class mail, postage
pre-paid, return receipt requested) or (d) on the date targeted for delivery if
delivered by nationally recognized overnight courier or similar courier
service, in each case addressed to Photogen or Xmark, as the case may be, at
the following addresses:

 

If to
Photogen:

 

140 Union
Square Drive

New Hope, PA
18938

Attention:
Chief Financial Officer

Facsimile:
(215) 862-7139)

 

with a copy (which shall not in itself constitute effective notice)
to:

 

8

 

Epstein,
Becker & Green, P.C.

111 Huntington
Avenue

Boston, MA
02199

Attention:
Susan E. Pravda, Esq.

Facsimile:
(617) 342-4001)

 

and

 

Grippo &
Elden

227 W. Monroe
Street

Chicago,
IL  60606

Attention:  Theodore W. Grippo, Esq.

Facsimile:  (312) 558-1195

 

If to Xmark:

152 West 57th
Street, 21st Floor

New York, New
York  10019

Attention:
Mitchell D. Kaye

Facsimile:
(212) 247-1329)

 

with a copy (which shall not in itself constitute effective notice)
to:

 

Lowenstein
Sandler PC

65 Livingston
Avenue

Roseland, New Jersey
07068

Attention:  John D. Hogoboom, Esq.

Facsimile:
(973) 597-2400

 

or to such other address as
either party shall have previously specified in writing to the other party in a
manner compliant with the above provision for giving notice hereunder.

 

9.                                       Entire
Agreement.  This letter agreement,
together with the Side Letter, Going Forward Agreement, the Notes, and the
Security Agreements, constitutes the entire agreement between Photogen and
Xmark regarding the subject matter hereof, there being no other written, oral
or other agreements or understandings between them with respect to the subject
matter hereof.  Except as expressly modified by this letter agreement,
the Going Forward Agreement (including, without limitation, Photogen’s
obligations set forth in Section 4 of the Going Forward Agreement), the
Notes, and/or the Security Agreements shall remain in full force and
effect.  In the event of any
inconsistencies between this letter agreement and the Going Forward Agreement,
the Notes and/or the Security Agreements, this letter agreement shall govern
and the Going Forward Agreement, the Notes and/or the Security Agreements, as
applicable, shall be deemed amended by the terms of this letter agreement to
the extent necessary to resolve any such inconsistencies.

 

9

 

10.                                 No
Third Party Rights.  Nothing in this
letter agreement, express or implied, is intended to confer upon any individual
or entity other than Photogen and Xmark any rights, remedies or obligations
under or by reason of this letter agreement.

 

11.                                 Severability.  The invalidity of any portion of this letter
agreement shall not affect the validity, force or effect of the remaining
portions of this letter agreement.  If
it is ever held that any provision hereunder is too broad to permit enforcement
of such provision to its fullest extent, such provision shall be enforced to
the maximum extent permitted by law.

 

12.                                 Applicable
Law; Jurisdiction; Venue; Waiver of Jury Trial. This letter agreement, and
all matters arising directly or indirectly hereunder, shall be governed by, and
construed in accordance with, the internal laws of the State of New York,
without reference to the choice of law principles thereof.  Any legal action, suit or proceeding arising
out of or relating to this letter agreement or the transactions contemplated
hereby shall only be instituted, heard and adjudicated (excluding appeals) in a
state or federal court located in the Southern District of New York, and each
party hereto knowingly, voluntarily and intentionally waives any objection
which such party may now or hereafter have to the laying of the venue of any
such action, suit or proceeding, and irrevocably submits to the exclusive
personal jurisdiction of any such court in any such action, suit or
proceeding.  Service of process in
connection with any such action, suit or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this letter agreement. 
Photogen and Xmark waive any right to request a trail by jury in any
proceeding arising directly or indirectly hereunder.

 

13.                                 Counterparts.  This letter agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

10

 

 

If the
foregoing accurately reflects our mutual understanding, please so indicate by
executing a counterpart of this letter agreement and returning it to the
undersigned.

 

	
   

  	
  Very truly
  yours,

  
	
   

  
	
   

  
	
   

  	
  PHOTOGEN
  TECHNOLOGIES, INC.

  
	
   

  
	
   

  
	
   

  	
  By:

  	
    /s/
  Taffy J. Williams, Ph.D.

  
	
   

  	
  Name:  Taffy
  J. Williams, Ph.D.

  
	
   

  	
  Title:  President and Chief Executive

  Officer

  

 

	
  ACCEPTED AND
  AGREED:

  
	
   

  
	
  XMARK FUND,
  L.P.

  
	
   

  
	
   

  
	
  By:  

  	
  /s/ Mitchell
  D. Kaye

  	
   

  
	
   

  	
  Name: Mitchell
  D. Kaye

  
	
   

  	
  Title:   Chief
  Investment Officer

  
	
   

  
	
   

  
	
  XMARK FUND,
  LTD.

  
	
   

  
	
   

  
	
  By:  

  	
  /s/ Mitchell
  D. Kaye

  	
   

  
	
   

  	
  Name: Mitchell
  D. Kaye

  
	
   

  	
  Title:   Chief
  Investment Officer

  

 

11Exhibit 10.1

 

FOURTH AMENDMENT TO CREDIT AGREEMENT

 

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT
(the “Fourth Amendment”) is made effective as of the 19th day of May, 2003,
between MOVIE
GALLERY, INC., a Delaware corporation (the “Borrower”), and SOUTHTRUST BANK,
an Alabama banking corporation, as Agent (the “Agent”).  Capitalized terms used herein but not
defined shall have the meanings as set forth in the Credit Agreement, as
amended (as hereinafter defined).

 

WHEREAS, pursuant to
that certain Credit Agreement dated as of June 27, 2001, among Borrower, Agent,
and the other Lender Parties a party thereto (the “Credit Agreement”), Lenders
made available to Borrower, subject to the terms and conditions thereof, (i)
the Revolving Loan in the initial principal amount of up to Sixty-Five Million
and 00/100 Dollars ($65,000,000.00), and (ii) the Swing Line Loan of up to Five
Million and 00/100 Dollars ($5,000,000.00); and

 

WHEREAS, pursuant to
that certain First Amendment to Credit Agreement dated as of September 25, 2001
(the “First Amendment”), the Credit Agreement was amended in order to amend
Section 8.8 of the Credit Agreement, pertaining to Hedge Agreements; and

 

WHEREAS, pursuant to
that certain Second Amendment to Credit Agreement dated as of January 14, 2002 (the
“Second Amendment”), the Credit Agreement was amended in order to amend the
definition of “Permitted Acquisition”; and

 

WHEREAS, pursuant to
that certain Third Amendment to Credit Agreement dated as of August 15, 2002
(the “Third Amendment”), the Credit Agreement was amended in order to, among
other things, (i) allow for certain additional Permitted Acquisitions, (ii)
amend the definition of “Equity Issuance” to not require a mandatory prepayment
in connection with the issuance of 3,900,000 shares of common stock on May 17,
2002, for public offering at a price of $18.25 per share, and (iii) remove the
step-down provision from the definition of “Revolving Loan Amount” (the Credit
Agreement, as amended by the First Amendment, the Second Amendment and the Third
Amendment, hereinafter referred to as the “Credit Agreement, as amended”); and

 

WHEREAS, Agent and
Borrower have agreed to amend the Credit Agreement, as amended, in order to,
among other things, (i) extend the Revolving Loan Maturity Date from July 4,
2004 until July 4, 2005, (ii) amend the Applicable Margin, (iii) amend the
Unused Fee, (iv) add five additional Guarantors, (v) amend the requirement
regarding the prepayment of the Loans in connection with the Net Cash Proceeds
from Asset Dispositions, (vi) delete the requirement that Borrower enter into
Hedge Agreements, and (vii) amend certain of the financial covenants, all as
hereinafter provided.

 

NOW, THEREFORE, in
consideration of One Dollar ($1.00) and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties agree
that the Credit Agreement, as amended, is hereby amended as follows:

 

1.                                       The
Credit Agreement, as amended, is hereby amended by adding the following 

 

1

 

capitalized terms as defined terms in Article
I:

 

“Movie
Gallery Asset Management” means Movie Gallery Asset Management, Inc., a
Delaware corporation.

 

“M.G. Texas”
means M.G. Texas, L.P., a Delaware limited partnership.

 

“M.G.A. Realty”
means M.G.A. Realty I, LLC, a Delaware limited liability company.

 

“Movie
Gallery Licensing” means Movie Gallery Licensing, Inc., a Delaware
corporation.

 

“Movie
Gallery Services” means Movie Gallery Services, Inc., a Delaware
corporation.

 

“Pledge Agreement
- M.G.A.” means that certain Pledge Agreement dated as of May 19, 2003,
made by M.G.A. in favor of Agent, as amended, modified or supplemented from
time to time.

 

“Pledge
Agreement - M.G. Midwest” means that certain Pledge Agreement dated as of
May 19, 2003, made by M.G. Midwest in favor of Agent, as amended, modified or
supplemented from time to time.

 

“Pledge
Agreement - Movie Gallery Finance” means that certain Pledge Agreement
dated as of May 19, 2003, made by Movie Gallery Finance in favor of Agent, as
amended, modified or supplemented from time to time.

 

2.                                       The
Credit Agreement, as amended, is hereby amended by deleting the definitions of
“Applicable Margin”, “Fixed Charge Coverage”, “Guarantors”,
“Revolving Loan Maturity Date”, “Security Documents”, and “Unused
Fee” in their entirety, and by substituting the following new definitions,
respectively, in lieu thereof:

 

“Applicable Margin” means a percentage
based on the Leverage Ratio, as follows:

 

	
  Leverage Ratio

  	
   

  	
  Applicable Margin

  Base Rate Borrowings

  	
   

  	
  Applicable Margin

  LIBOR Rate Borrowings

  	
   

  
	
  Greater than
  or equal to

  1.5 to 1.0, but less than

  2.0 to 1.0

  	
   

  	
  0.75

  	
  %

  	
  2.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  or equal to

  1.0 to 1.0, but less than

  1.5 to 1.0

  	
   

  	
  0.5

  	
  %

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  or equal to

  0.75 to 1.0, but less than

  1.0 to 1.0

  	
   

  	
  0.0

  	
  %

  	
  2.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than
  0.75 to 1.0

  	
   

  	
  0.0

  	
  %

  	
  1.75

  	
  %

  

 

2

 

“Fixed Charge Coverage” means the
ratio of (i) Operating Cash Flow plus Lease Expense, to (ii) Interest Expense,
plus Lease Expense, plus Income Tax Expense (but only to the extent paid), plus
principal payments in respect of Funded Debt scheduled or otherwise required to
have been made, plus dividends paid during any applicable period by any
Borrower Party to any Person other than another Borrower Party.

 

“Guarantors” means M.G.A.,
MovieGallery.com, Movie Gallery Finance, M.G. Midwest, Movie Gallery Canada,
Movie Gallery Asset Management, M.G. Texas, M.G.A. Realty, Movie Gallery
Licensing, Movie Gallery Services, and each other Person who becomes a
Guarantor under this Agreement.

 

“Revolving Loan Maturity Date” means
July 4, 2005, or if earlier, the occurrence of an Event of Default.

 

“Security Documents” means the Pledge
Agreement, the Pledge Agreement - M.G.A., the Pledge Agreement - M.G. Midwest,
the Pledge Agreement - Movie Gallery Finance, and all other pledge or security
agreements or instruments executed and delivered by Borrower or any of its
Subsidiaries pursuant to Section 8.10 or otherwise in connection with the
transactions contemplated hereby, in each case as amended, modified or
supplemented from time to time.

 

“Unused Fee” means the fee payable by
Borrower to Agent for the account of each Lender on each Quarter-End, as
determined by Agent as of such Quarter-End in an amount equal to the product of
(A) the daily average of such Lender’s Unused Revolving Loan Commitment
outstanding on each day during such quarter, multiplied by (B) a percentage
based on the Leverage Ratio as follows:

 

	
  Leverage Ratio

  	
   

  	
  Unused Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  or equal to 1.0 to 1.0

  	
   

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than
  1.0 to 1.0

  	
   

  	
  0.25

  	
  %

  

 

3.                                       The
Credit Agreement, as amended, is hereby amended by deleting Section 5.3(D) in
its entirety, and by substituting in lieu thereof the following new Section 5.3(D):

 

(D)                               Not
later than 180 days after its receipt thereof, Borrower will prepay the
outstanding principal amount of the Loans in an amount equal to 100% of the Net
Cash Proceeds from any Asset Disposition (less any amounts theretofore expended
to acquire assets or properties or otherwise reinvested in its

 

3

 

businesses)
and will deliver to Agent, concurrently with such prepayment, a certificate
signed by its chief financial officer in form and substance satisfactory to the
Agent and setting forth the calculation of such Net Cash Proceeds; provided,
however, that such prepayment shall only be required to the extent the
aggregate amount of Net Cash Proceeds from all such Asset Dispositions made
from and after the Closing Date (less any amounts theretofore expended to
acquire assets or properties or otherwise reinvested) exceeds $3,000,000.00.
Notwithstanding the foregoing, nothing in this subsection (D) shall be deemed
to permit any Asset Disposition not expressly permitted under Section 10.4.

 

4.                                       The
Credit Agreement, as amended, is hereby amended by deleting Section 8.8 in its
entirety.

 

5.                                       The
Credit Agreement, as amended, is hereby amended by deleting Section 9.4 in its
entirety, and by substituting in lieu thereof the following new Section 9.4:

 

9.4                                 Net Worth.  Borrower will not permit Net Worth as of any
Quarter-End, beginning with the Quarter-End of January 5, 2003, to be less than
the sum of (i) $175,000,000, plus (ii) 75% of the aggregate of Net Income
for each fiscal quarter beginning with the Quarter-End of October 6, 2002
(provided that Net Income for any fiscal quarter shall be taken into account
for purposes of this calculation only if positive), plus (iii) 100% of
the aggregate amount of all increases in the stated capital and additional
paid-in capital accounts of Borrower and its Subsidiaries, resulting from the
issuance of Equity Interests (including Equity Interests issued pursuant to the
exercise of options, rights or warrants or pursuant to the conversion of
convertible Equity Interests) or other capital investments after July 7, 2002 (provided
that nothing in this section shall be deemed to permit any stock repurchases
not expressly permitted under Section 10.6(A)(3)), less (iv) 100%
of the aggregate amount paid or payable with respect to any purchase,
redemption, retirement or other acquisition of shares of its capital stock;

 

provided, however, that in all events,
Borrower will not permit Net Worth as of any Quarter-End to be less than $187,000,000
plus (ii) 75% of the aggregate of Net Income for each fiscal quarter
beginning with the Quarter-End of October 6, 2002 (provided that Net Income for
any fiscal quarter shall be taken into account for purposes of this calculation
only if positive).

 

6.                                       The
Credit Agreement, as amended, is hereby amended by deleting Section 10.6(A)(1)
in its entirety, and by substituting in lieu thereof the following new Section
10.6(A)(1):

 

(1)                                  Borrower
may declare and make dividend payments or other distributions to its owners, to
the extent not prohibited under applicable Requirements of Law, so long as no
Default or Event of Default would exist immediately after giving effect
thereto;

 

4

 

7.                                       As
a condition to the effectiveness of this Fourth Amendment (a) Borrower shall
have executed and delivered to Agent, or caused to be executed and delivered to
Agent, a Second Amendment to Pledge Agreement, the Pledge Agreement - M.G.A.,
the Pledge Agreement - M.G. Midwest, the Pledge Agreement - Movie Gallery
Finance, and a Joinder Agreement (Guaranty), together with all stock
certificates and other items required by Agent in connection therewith; (b)
Borrower shall pay to Lender Parties an extension fee in the amount of $97,500.00;
(c) Borrower shall reimburse the Lender Parties for all of the Lender Parties’
fees and expenses, including, but not limited to, any and all filing fees,
recording fees, and reasonable expenses and fees of the Lender Parties’ legal
counsel, incurred in connection with the preparation, amendment, modification
or enforcement of this Fourth Amendment, the Credit Agreement, as amended, and
any and all documents executed and delivered in connection herewith or
therewith; (d) Borrower shall execute and deliver to Agent all further
documents and perform all other acts which Agent reasonably deems necessary or
appropriate to perfect or protect its security for the Loans; and (e) Borrower
shall have delivered to Agent such other documentation, if any, as may be requested
by Agent to satisfy Agent that this Fourth Amendment, and all other documents
and instruments executed by Borrower in connection with this Fourth Amendment
or in furtherance hereof have each been duly authorized, executed and delivered
on behalf of Borrower, and constitute valid and binding obligations of
Borrower.

 

8.                                       Borrower
represents and warrants to Agent that all representations and warranties given
by Borrower in Article VII of the Credit Agreement, as amended, are true and
correct as of the date hereof, except to the extent affected by this Fourth
Amendment.  Borrower represents and
warrants to Agent that Borrower is in full compliance with all of the covenants
of Borrower contained in Articles VIII, IX and X of the Credit Agreement, as
amended, except to the extent affected by this Fourth Amendment.

 

9.                                       Except
as heretofore or herein expressly modified, or as may otherwise be inconsistent
with the terms of this Fourth Amendment (in which case the terms and conditions
of this Fourth Amendment shall govern), all terms of the Credit Agreement, as
amended, and all documents and instruments executed and delivered in
furtherance thereof shall be and remain in full force and effect, and the same
are hereby ratified and confirmed in all respects.

 

10.                                 The
undersigned Guarantors execute this Fourth Amendment to expressly evidence
their assent to all the terms of the Credit Agreement, as amended, and this
Fourth Amendment, and to further acknowledge and agree that the Guaranty
remains in full force and effect and that the “Guaranteed Obligations” under
the Guaranty shall include, without limitation, all obligations of Borrower
under the Credit Agreement, as amended, and as amended by this Fourth
Amendment.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY
LEFT BLANK]

 

5

 

IN WITNESS WHEREOF,
this Fourth Amendment has been duly executed as of the day and year first above
written.

 

	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MOVIE
  GALLERY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
  Its:

  	
    Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  M.G.A., INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
  Its:

  	
    Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MOVIEGALLERY.COM,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
  Its:

  	
    Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MOVIE
  GALLERY FINANCE, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
  Its:

  	
    Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  M.G.
  MIDWEST, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
  Its:

  	
    Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MOVIE
  GALLERY CANADA, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
  Its:

  	
    Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MOVIE
  GALLERY ASSET MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
  Its:

  	
    President

  	
   

  
															

 

6

 

	
   

  	
  M.G. TEXAS,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  M.G.A.,
  INC., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
   

  	
  Its:

  	
    Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  M.G.A.
  REALTY I, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  M.G.
  MIDWEST, INC., its Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
   

  	
  Its:

  	
    Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MOVIE
  GALLERY LICENSING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
  Its:

  	
    Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MOVIE
  GALLERY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ S. Page Todd

  	
   

  
	
   

  	
  Its:

  	
    Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  SOUTHTRUST
  BANK, as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    W. Spencer Ragland

  	
   

  
	
   

  	
  Its:

  	
    Vice President

  	
   

  
													

 

STATE OF
ALABAMA

COUNTY OF HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Executive Vice President of Movie
Gallery, Inc., a Delaware corporation, is signed to the foregoing instrument,
and who is known to me, acknowledged before me that, being informed of the
contents of such instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

7

 

STATE OF ALABAMA

COUNTY OF
HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Executive Vice President of M.G.A.,
Inc., a Delaware corporation, is signed to the foregoing instrument, and who is
known to me, acknowledged before me that, being informed of the contents of
such instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said corporation.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

STATE OF ALABAMA

COUNTY OF
HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Executive Vice President of
Moviegallery.com, Inc., a Delaware corporation, is signed to the foregoing
instrument, and who is known to me, acknowledged before me that, being informed
of the contents of such instrument, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said
corporation.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

STATE OF ALABAMA

COUNTY OF HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Vice President of Movie Gallery
Finance, Inc., a Delaware corporation, is signed to the foregoing instrument,
and who is known to me, acknowledged before me that, being informed of the
contents of such instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

 

STATE OF ALABAMA

COUNTY OF HOUSTON

 

8

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Executive Vice President of M.G.
Midwest, Inc., a Delaware corporation, is signed to the foregoing instrument,
and who is known to me, acknowledged before me that, being informed of the
contents of such instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

STATE OF ALABAMA

COUNTY OF HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Executive Vice President of Movie
Gallery Canada, Inc., a New Brunswick (Canada) corporation, is signed to the
foregoing instrument, and who is known to me, acknowledged before me that,
being informed of the contents of such instrument, he, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

STATE OF ALABAMA

COUNTY OF HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as President of Movie Gallery Asset
Management, Inc., a Delaware corporation, is signed to the foregoing
instrument, and who is known to me, acknowledged before me that, being informed
of the contents of such instrument, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said
corporation.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

STATE OF ALABAMA

COUNTY OF HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Executive Vice President of M.G.A.,
Inc., a Delaware corporation,

 

9

 

as General Partner of M.G. Texas, L.P., a Delaware limited partnership,
is signed to the foregoing instrument, and who is known to me, acknowledged
before me that, being informed of the contents of such instrument, he, as such
officer and with full authority, executed the same voluntarily for and as the
act of said corporation in its capacity as General Partner as aforesaid.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

STATE OF ALABAMA

COUNTY OF HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Executive Vice President of M.G.
Midwest, Inc., a Delaware corporation, as the sole Member of M.G.A. Realty I,
LLC, a Delaware limited liability company, is signed to the foregoing
instrument, and who is known to me, acknowledged before me that, being informed
of the contents of such instrument, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said corporation
in its capacity as sole Member as aforesaid.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

STATE OF ALABAMA

COUNTY OF HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Vice President of Movie Gallery
Licensing, Inc., a Delaware corporation, is signed to the foregoing instrument,
and who is known to me, acknowledged before me that, being informed of the
contents of such instrument, he, as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

STATE OF
ALABAMA

COUNTY OF HOUSTON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that S. Page Todd, whose name as Executive Vice President of Movie
Gallery Services, Inc., a

 

10

 

Delaware corporation, is signed to the foregoing instrument, and who is
known to me, acknowledged before me that, being informed of the contents of
such instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said corporation.

 

Given under my
hand and official seal, this the 19th day of May, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Martha F. Compton

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  7/30/05

  	
   

  
						

 

STATE OF
ALABAMA

COUNTY OF JEFFERSON

 

I, the
undersigned, a Notary Public in and for said County in said State, hereby
certify that W. Spencer Ragland, whose name as Vice President of SouthTrust
Bank, an Alabama banking corporation, is signed to the foregoing instrument,
and who is known to me, acknowledged before me that, being informed of the contents
of such instrument, he, as such officer and with full authority, executed the
same voluntarily for and as the act of said banking corporation.

 

Given under my
hand and official seal, this the 23rd day of June, 2003.

 

	
  [SEAL]

  	
   

  
	
   

  	
  /s/ Elizabeth Corrigan

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  	
  January 10,
  2005

  	
   

  
						

 

11

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