Document:

Amended and Restated Commitment Letter, dated 2/2/05

 Exhibit 10.18 
  

					
	 JPMorgan Chase Bank, N.A.
 270 Park Avenue
 New York, NY 10017
	 	 Credit Suisse First Boston
 Eleven Madison Avenue
 New York, NY 10010
	 	 Citicorp North America, Inc.
 388 Greenwich Street
 New York, NY 10013

			
	 J.P. Morgan Securities Inc.
 270 Park Avenue
 New York, NY 10017
	 	 	 	 Citigroup Global Markets Inc.
 390 Greenwich Street
 New York, NY 10013

  
 December 28, 2004,

 as amended and restated as of 
 February 2, 2005 
  
 Blockbuster Inc.

 1201 Elm Street 
 Dallas, Texas 75270 
  
 Attention of Larry Zine 
 Chief Financial Officer 
  
 Blockbuster Inc. 
 Project Star  
 Amended and Restated Commitment Letter 
  
 Ladies and Gentlemen: 
  
 This amended and restated commitment letter amends and restates the commitment letter dated December 28, 2004, by and among
Blockbuster Inc., JPMorgan Chase Bank, N.A., J.P. Morgan Securities Inc., Credit Suisse First Boston, Citigroup Global Markets Inc. and Citigroup North America, Inc. For all purposes hereof, references to “the date hereof” shall be deemed
to refer to December 28, 2004. 
  
 Blockbuster Inc., a Delaware
corporation (“you” or the “Borrower”), has advised JPMorgan Chase Bank, N.A. (“JPMCB”), J.P. Morgan Securities Inc. (“JPMorgan”), Credit Suisse First Boston (together with its
affiliates, “CSFB”), Citicorp North America, Inc. (“CNAI”) and Citigroup Global Markets Inc. (“CGMI” and, together with JPMCB, JPMorgan, CSFB and CNAI, “we” or
“us”) that you propose to acquire (the “Acquisition”), all the outstanding common stock (the “Shares”) of Hollywood Entertainment Corporation, an Oregon corporation (“Target”). You
have advised us that in the Acquisition, each Share will be exchanged for consideration consisting of $11.50 per Share in cash and shares (or fraction of shares) of Class A 

 
common stock, par value $0.01 per share, of the Borrower (the “BBI Shares”) having a market value (determined as set forth in the
Borrower’s Form S-4 for the BBI Shares to be issued in the Acquisition (the “S-4”)) of $3.00. You have advised us that the Acquisition will be effected either through (a) a tender offer (the “Tender Offer”) by
the Borrower to acquire 100% of the Shares followed by a merger of a wholly-owned special purpose acquisition subsidiary of the Borrower with and into Target (the “Merger”) in a transaction in which each outstanding Share not
acquired in the Tender Offer will be converted into the right to receive the kind and amount of consideration paid per Share in the Tender Offer and each then outstanding option on Shares will be converted into options to purchase BBI Shares or (b)
a single-step merger of the Borrower and the Target (the “Alternative Transaction”). 
  
 In connection with the Acquisition, you have informed us that you intend (a) to amend (the “Amendment”) your Credit Agreement, dated as
of August 20, 2004 (the “Existing Credit Agreement”), among you, the lenders party thereto, JPMCB, as Administrative Agent and Collateral Agent, CNAI, as Syndication Agent, and CSFB, as Documentation Agent, in order to, among other
things, (i) change the pricing applicable to the Tranche A Term Loans and the Revolving Credit Loans under the Existing Credit Agreement, (ii) change the maximum Leverage Ratio (as defined in the Existing Credit Agreement) applicable to the period
ending December 30, 2006, from 3.25 to 1.00 to 3.75 to 1.00, and (iii) provide for a new tranche of senior secured term loans in an aggregate principal amount not to exceed $500,000,000 (the “Tranche C Term Facility”) and (b) to
either (i) issue up to $500,000,000 in aggregate principal amount of senior subordinated notes (the “Notes”) in a public offering or in a Rule 144A or other private placement or (ii) if and to the extent that you do not issue
$500,000,000 in aggregate principal amount of Notes on or prior to the Closing Date, borrow up to $500,000,000 less the gross cash proceeds from the issuance of Notes issued pursuant to the immediately preceding clause (i) in aggregate principal
amount of senior subordinated bridge loans under a new senior subordinated bridge facility (the “Bridge Facility” and, together with the Tranche C Term Facility, the “New Facilities”). The Existing Credit Agreement
as amended by the Amendment is referred to herein as the “Amended Credit Agreement” and the facilities thereunder, the “Amended Credit Facilities”. It is contemplated that the terms of the Amended Credit Facilities
and the Bridge Facility will be as set forth in the Summary of Terms and Conditions of the Amended Credit Facilities and the Summary of Terms and Conditions of the Bridge Facility attached as Exhibit A and Exhibit B, respectively, to this Commitment
Letter (collectively, the “Term Sheets”; capitalized terms used but not defined herein have the meanings assigned to them in the Term Sheets). 
  

In connection with the foregoing, each of JPMCB, CSFB and CNAI (collectively, the “Initial Lenders”) is pleased to advise you of its
several commitment to provide one-third of the principal amount of the New Facilities, on a pro rata basis, on the terms and subject to the conditions set forth or referred to in this Commitment Letter and in the Term Sheets. 
  

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 You hereby engage (a) JPMorgan and CGMI to act as co-lead arrangers and joint bookrunners for each of the
Tranche C Term Facility and the Amendment and CSFB and CGMI to act as co-lead arrangers for the Bridge Facility (JPMorgan, CSFB and CGMI are herein referred to as the “Arrangers”), (b) JPMCB to act as sole administrative agent and
collateral agent for the Tranche C Term Facility, (c) CSFB to act as sole administrative agent for the Bridge Facility, (d) CNAI to act as sole syndication agent for the Tranche C Term Facility, (e) CNAI to act as sole syndication agent for the
Bridge Facility, (f) CSFB to act as sole documentation agent for the Tranche C Term Facility and (g) JPMCB to act as sole documentation agent for the Bridge Facility, in each case on the terms and subject to the conditions set forth or referred to
in this Commitment Letter and in the Term Sheets. Each of us hereby agrees to so act and, in such capacities, to perform the functions and exercise the authority customarily performed and exercised by it in such roles, including in the case of the
Arrangers to use commercially reasonable efforts to obtain the requisite approval of the Amendment by lenders under the Existing Credit Agreement. You agree that JPMorgan will have “left” placement in any and all marketing materials or
other documentation used in connection with the Tranche C Term Facility and CSFB will have “left” placement in any and all marketing materials or other documentation used in connection with the Bridge Facility. It is agreed that no other
agents, co-agents, arrangers or co-arrangers will be appointed, no other titles will be awarded and no compensation (other than compensation referred to herein, in the Term Sheets or in the Fee Letter referred to below) will be paid in connection
with the New Facilities or the Amendment unless you and we shall so agree. 
  
 Each of JPMCB, CSFB and CNAI hereby agrees to vote its loans and commitments under the Existing Credit Agreement in favor of the Amendment. 
  
 Each Initial Lender reserves the right, prior to or after the execution of definitive documentation for the New Facilities,
to syndicate, in consultation with you, all or a portion of its commitments hereunder to one or more financial institutions that will become parties to such definitive documentation (together with the Initial Lenders, the financial institutions
becoming parties to such definitive documentation being collectively referred to as the “Lenders”). Each Initial Lender may assign its commitment hereunder to any of its affiliates or, with your consent (not to be unreasonably
withheld or delayed), to any Lender. Any such assignment to an affiliate will not relieve such Initial Lender from any of its obligations hereunder unless and until such affiliate shall have funded the portion of the commitment so assigned. Any
assignment to a Lender shall release the Initial Lender from the portion of its commitment hereunder so assigned. You understand that each of the New Facilities may be separately syndicated. The Arrangers may commence syndication efforts promptly
upon your execution of this Commitment Letter, and you agree actively to assist the Arrangers in completing a syndication; provided that, a successful syndication will not be a condition to the initial funding of the New Facilities. Such
assistance shall include (a) your using commercially reasonable efforts to ensure that the syndication efforts benefit materially from your existing banking relationships, (b) direct contact between 

  

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your senior management, representatives and advisors and the proposed Lenders, (c) your assistance in the preparation of a Confidential Information
Memorandum (the “Confidential Information Memorandum”) and other marketing materials to be used in connection with the syndication of the New Facilities (including, if requested by the Arrangers, a version thereof containing only
publicly available information and information that is not material with respect to you, the Target or securities issued by you or the Target) and (d) the hosting, with the Arrangers, of one or more conference calls with or meetings of prospective
Lenders. You further agree that, if the Acquisition becomes a negotiated transaction, you will use your commercially reasonable efforts to cause the Target and its senior management, representatives and advisors to assist in the foregoing matters.

  
 The Arrangers will manage, in consultation with you, all
aspects of the syndication, including selection of Lenders, determination of when the Arrangers will approach potential Lenders and the time of acceptance of the Lenders’ commitments, any naming rights, the final allocations of the commitments
among the Lenders and the amount and distribution of fees among the Lenders. To assist the Arrangers in their syndication efforts, you agree promptly to prepare and provide to the Arrangers (and, if the Acquisition becomes a negotiated transaction,
to use your commercially reasonable efforts to cause the Target to provide) all information with respect to Borrower and its subsidiaries, the Target, the Transactions and the other transactions contemplated hereby, including all financial
information and projections (the “Projections”), as the Arrangers may reasonably request in connection with the arrangement and syndication of the New Facilities. 
  
 You hereby represent and warrant (and it shall be a condition to each Initial Lender’s commitment and our agreements
hereunder) that (a) all information other than the Projections (the “Information”) that has been or will be made available to any of us by or on behalf of you or your representatives, when taken as a whole, is or will be, when
furnished (to the best of your knowledge in the case of Information relating to the Target), complete and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements were or are made and (b) the Projections that have been or will be made available to any of
us by or on behalf of you or your representatives, and your affiliates have been and will be prepared in good faith based upon assumptions that were or are reasonable at the time made and at the time the related Projections were or are made
available to any of us (it being understood that projections by their nature are inherently unreliable and that actual results may differ materially from the Projections). You agree that if, at any time prior to and including the date on which
definitive documentation for the New Facilities is executed, any of the representations in the preceding sentence would be incorrect if the Information and Projections were being furnished, and such representations were being made, at such time,
then you will promptly notify us and supplement the Information and the 

  

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Projections so that such representations will be correct under the circumstances. You understand that in arranging and syndicating the New Facilities, we
will be using and relying on the Information and the Projections without independent verification thereof. 
  
 As consideration for the Initial Lenders’ commitments and our agreements hereunder, you agree to pay to us, when due and payable, the nonrefundable
fees set forth in the Term Sheets and in the Fee Letter, dated December 28, 2004, as amended and restated as of February 2, 2005, and delivered herewith, relating to the New Facilities (the “Fee Letter”). 
  
 The Initial Lenders’ commitments and our agreements hereunder are
subject to (a) our not becoming aware of information not previously disclosed to us that is materially inconsistent with the information provided to us prior to the date hereof with respect to the business, operations, assets, financial condition or
operating results of the Borrower and its subsidiaries, taken as a whole, or Target and its subsidiaries, taken as a whole, (b) there not occurring or becoming known to us any event, condition or circumstance that has had or could reasonably be
expected to have a material adverse effect on the business, operations, assets or financial condition of (i) the Borrower and its subsidiaries, taken as a whole, since December 31, 2003 (in each case, other than as disclosed in the Borrower’s
SEC filings made prior to the date hereof or in the Projections furnished to the Arrangers prior to the date hereof) or (ii) the Target and its subsidiaries, taken as a whole, since December 31, 2003 (in each case, other than as disclosed in the
Target’s SEC filings made prior to the date hereof or in the Projections furnished to the Arrangers prior to the date hereof), (c) there not having occurred a material disruption of or material adverse change in financial, banking or capital
market (including, without limitation, high-yield market) conditions that, in the Arrangers’ judgment, could reasonably be expected to materially impair the syndication of any of the New Facilities, the placement of the Notes or the
consummation of the Amendment, (d) our satisfaction that, prior to and during the syndication of the New Facilities, there shall be no competing issues of debt securities or commercial bank or other credit facilities of the Borrower or its
subsidiaries, or, in the event of the Alternative Transaction, the Target or its subsidiaries, being offered, placed or arranged (other than the Notes), (e) the negotiation, execution and delivery of definitive documentation with respect to the New
Facilities and the Amendment reasonably satisfactory to us based on the terms and conditions set forth herein and in the Term Sheets, (f) our having been afforded at least 30 days from the date the Confidential Information Memorandum is first
delivered to prospective Lenders to syndicate the New Facilities and seek consents for the Amendment and (g) the other conditions set forth or referred to in the Term Sheets. Those matters that are not covered by or made clear under the provisions
hereof and of the Term Sheets are subject to the approval and agreement of each of us and you. 
  
 You agree (a) to indemnify and hold harmless each of us, our respective affiliates and the officers, directors, employees, agents, advisors and controlling persons of each of the foregoing and the successors and
assigns of each of the foregoing (each, an “indemnified person”) from and against any and all losses, claims, damages and 

  

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liabilities, joint or several, to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Fee
Letter, the Term Sheets, the Amendment, the Transactions, the New Facilities, the use of proceeds thereof or any related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any
indemnified person is a party thereto, and to reimburse each indemnified person upon demand for any reasonable legal or other expenses incurred in connection with investigating or defending any of the foregoing, provided that the foregoing
indemnity will not as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they are (i) found in a final nonappealable judgment of a court of competent jurisdiction to have resulted from the
willful misconduct, bad faith or gross negligence of such indemnified person or (ii) asserted by an indemnified person solely against one or more other indemnified persons, and (b) to reimburse each of us and our respective affiliates, promptly upon
receipt of a reasonably detailed written invoice, for all reasonable out-of-pocket expenses (including, without limitation, consultants’ fees, syndication expenses, travel expenses and reasonable fees, charges and disbursements of a single U.S.
transaction and documentation counsel and such foreign counsel as may be reasonably required in connection with pledges of stock of foreign subsidiaries) incurred in connection with the New Facilities or the Amendment and any related documentation
(including this Commitment Letter, the Term Sheets, the Fee Letter, the definitive documentation for the New Facilities and the Amendment and any security arrangements in connection therewith) or the administration, amendment, modification or waiver
thereof. Notwithstanding any other provision of this Commitment Letter, no indemnified person shall be liable for any damages arising from the use by others of Information or other materials obtained through electronic, telecommunications or other
information transmission systems (including the internet) (provided that such unauthorized person’s use did not arise from the willful misconduct, bad faith or gross negligence of such indemnified person), and, except as otherwise
provided in the definitive documentation for the New Facilities or the Amendment, neither the Borrower, its subsidiaries, nor any indemnified person will be liable for any special, indirect, consequential or punitive damages in connection with the
New Facilities or the Amendment. 
  
 You acknowledge that we and
our affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which you may have conflicting interests regarding the transactions described herein and
otherwise. 
  
 This Commitment Letter, the Initial Lenders’
commitments and our agreements hereunder shall not be assignable by you without the prior written consent of each of us, and any attempted assignment without such consent shall be void. This Commitment Letter may not be amended or any provision
hereof waived or modified except by an instrument in writing signed by each of us and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall
constitute one agreement. Delivery of an 

  

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executed signature page of this Commitment Letter by facsimile transmission shall be effective as delivery of a manually executed signature page of this
Commitment Letter. This Commitment Letter (including the exhibits hereto) and the Fee Letter are the only agreements that have been entered into by the parties hereto with respect to the New Facilities and the Amendment and set forth the entire
understanding of the parties hereto with respect thereto. This Commitment Letter is intended to be solely for the benefit of the parties hereto and the indemnified persons, and is not intended to confer any benefits upon, or to create any rights in
favor of, any person other than the parties hereto and the indemnified persons. This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York. Each party to this Commitment Letter irrevocably agrees
to waive trial by jury in any suit, action, proceeding, claim or counterclaim brought by or on behalf of any party related to or arising out of the Transactions, the Amendment, this Commitment Letter, the Term Sheets and the Fee Letter or any
related transaction or the performance of services hereunder or thereunder. We may perform the activities described herein through any of our affiliates (including our branches) and the provisions of the second preceding paragraph shall apply with
equal force and effect to any of such affiliates so performing any such activities. 
  
 You agree that you will not disclose, directly or indirectly, this Commitment Letter, the Term Sheets and the Fee Letter, the contents of any of the foregoing or our activities pursuant hereto or thereto to any person
without our prior written approval, except that (a) you may disclose this Commitment Letter, the Term Sheets, the Fee Letter and the contents hereof and thereof (i) to your directors, officers, employees, attorneys, accountants and advisors on a
confidential and need-to-know basis (except that neither the Fee Letter nor the contents thereof may be disclosed to your financial advisors), and (ii) as required by applicable law, compulsory legal process or the rules of the New York Stock
Exchange (in which case you agree to inform us promptly thereof) and (b) after your acceptance of this Commitment Letter and the Fee Letter, you may (i) make such disclosures as you deem appropriate in press releases, any prospectus or other
offering memorandum relating to the Notes or regulatory filings of this Commitment Letter, the Term Sheets and the contents hereof and thereof (but not the Fee Letter or the contents thereof) and (ii) disclose this Commitment Letter, the Term Sheets
and the contents hereof and thereof (but not the Fee Letter or the contents thereof) to the Target’s special committee of independent directors considering the Acquisition (but not the Target itself unless the Target itself, rather than the
Target’s special committee of independent directors, is considering the Acquisition) and its counsel and advisors. 
  
 Each of JPMCB, CSFB and CNAI agrees that it will not disclose to any other person this Commitment Letter, the Term Sheets and the Fee Letter, the contents
of any of the foregoing or its activities pursuant hereto or thereto or any information relating to you furnished to it by or on behalf of you or use it for any purpose (except in connection with the transactions contemplated hereby and other
business relationships between it and you), except that it will be permitted to disclose information: (a) to such of 

  

 7 

 
its affiliates and each of its and their directors, officers, employees, attorneys, accountants and advisors on a confidential and need-to-know basis, (b) as
required by applicable law, compulsory legal process or the rules of the New York Stock Exchange (in which case it agrees to inform you promptly thereof), (c) to the extent requested by any bank regulatory authority with jurisdiction over it, (d) to
the extent such information (i) becomes publicly available other than as a result of a breach of this agreement, (ii) becomes available to it on a non-confidential basis from a source other than you, who, to its knowledge, is not bound by an
obligation of confidentiality with respect to such information or (iii) was available to it on a non-confidential basis prior to its disclosure by you, (e) to the extent you shall have consented to such disclosure in writing, or (f) in connection
with the arrangement and syndication of the New Facilities, to prospective syndicate members that shall have entered into customary confidentiality undertakings reasonably satisfactory to it and you. You acknowledge that we and our affiliates have
no obligation to use in connection with the transactions contemplated hereby or to furnish to you confidential information obtained by us or our affiliates from other companies. 
  
 The Arrangers hereby notify you that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Patriot Act”), they, and each Lender, may be required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower
and other information that will allow the Arrangers and each Lender to identify the Borrower in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective for the Arrangers and each
Lender. 
  
 The compensation, reimbursement, indemnification and
confidentiality provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether definitive documentation with respect to the New Facilities or the Amendment shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or the Initial Lenders’ commitments and our agreements hereunder; provided that to the extent that the Amended Credit Agreement and the Bridge Facility definitive documentation
cover an indemnification claim which is also covered by a term of this Commitment Letter, such term of the Commitment Letter shall not apply to such claim upon the execution of such definitive documentation. 
  
 Please indicate your approval of this amended and restated Commitment Letter
and the amended and restated Fee Letter by returning to us executed counterparts of this amended and restated Commitment Letter and the amended and restated Fee Letter not later than 5:00 p.m., New York City time, on Wednesday, February 2, 2005,
failing which this amended and restated Commitment Letter and our agreements hereunder will terminate. If the closing of the New Facilities and the Amendment shall not have occurred on or before July 31, 2005, this amended and restated Commitment
Letter and the Initial Lenders’ commitments and our agreements hereunder shall automatically terminate unless each of us shall, in its discretion, agree to an extension. 
  

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 We are pleased to have been given the opportunity to assist you on these financings. 
  

					
	 Very truly yours,

	
	 JPMORGAN CHASE BANK, N.A.,

			
	 	 	 by
	 	 /s/ Barry K. Bergman

	 	 	 	 	 Name:  Barry K. Bergman
 Title:    Vice President

  

					
	 J.P. MORGAN SECURITIES INC.,

			
	 	 	 by
	 	 /s/ Robert Dorr

	 	 	 	 	 Name:  Robert Dorr
 Title:    Vice President

  

					
	 CREDIT SUISSE FIRST BOSTON
 acting through its Cayman Islands Branch,

			
	 	 	 by
	 	 /s/ Lauri Sivaslian

	 	 	 	 	 Name:  Lauri Sivaslian
 Title:    Managing Director

			
	 	 	 by
	 	 /s/ William O’Daly

	 	 	 	 	 Name:  William O’Daly
 Title:    Director

  

					
	 CITIGROUP GLOBAL MARKETS INC.,

			
	 	 	 by
	 	 /s/ Robert H. Chen

	 	 	 	 	 Name:  Robert H. Chen
 Title:    Director

  

					
	 CITICORP NORTH AMERICA, INC.,

			
	 	 	 by
	 	 /s/ Robert H. Chen

	 	 	 	 	 Name:  Robert H. Chen
 Title:    Vice President

  

 Accepted and agreed to as of 
 the date first above written: 
  

					
	 BLOCKBUSTER INC.,

		
	 By
	 	 /s/ Larry J. Zine

	 	 	 Name:
 Title:
	 	 Larry J. Zine
 Executive Vice President,
 Chief Financial Officer and
 Chief Administrative Officer

  

 EXHIBIT A 
  
 Blockbuster Inc. 
 Project Star

 Amended Credit Facilities 
 Summary of Principal Terms and Conditions 
  

	 Borrower: 
	 Blockbuster Inc., a Delaware corporation (the “Borrower”). 

  

	 Transactions: 
	 The Borrower has advised JPMorgan (as defined below), CSFB (as defined below) and CGMI (as defined below) (collectively, the
“Arrangers”) that it proposes to acquire (the “Acquisition”) all the outstanding common stock (the “Shares”) of Hollywood Entertainment Corporation, an Oregon corporation
(“Target”). In the Acquisition, each Share will be exchanged for consideration consisting of $11.50 per Share in cash and shares (or fraction of Shares) of Class A common stock, par value $0.01 per share, of the Borrower (the
“BBI Shares”) having a market value (determined as set forth in the S-4) of $3.00. The Acquisition will be effected through a tender offer (the “Tender Offer”) by the Borrower to acquire 100% of the Shares followed
by a merger of a wholly owned special purpose acquisition subsidiary of the Borrower (“Acquisition Co.”) with and into Target (the “Merger”) in a transaction in which each outstanding Share not acquired in the
Tender Offer will be converted into the right to receive the kind and amount of consideration paid per Share in the Tender Offer and each then outstanding option on Shares will be converted into options to purchase BBI Shares. Alternatively, the
Acquisition may occur through a single-step merger of the Borrower and the Target (the “Alternative Transaction”). In connection with the Acquisition, (a) the Borrower and the Existing Lenders will amend (the
“Amendment”) the existing Credit Agreement, dated as of August 20, 2004 (the “Existing Credit Agreement”), among the Borrower, the lenders party thereto (the “Existing Lenders”), JPMCB (as defined
below), as Administrative Agent and Collateral Agent and CNAI (as defined below), as Syndication Agent, and CSFB, as Documentation Agent, in order to, among other things (i) change the pricing applicable to 

  

 the Tranche A Term Loans and the Revolving Credit Loans (each as defined below) under the Existing
Credit Agreement, (ii) change the maximum Leverage Ratio (as defined in the Existing Credit Agreement) applicable to the period ending December 30, 2006, from 3.25 to 1.00 to 3.75 to 1.00 and (iii) provide for the new tranche of senior secured term
loans described below (the Existing Credit Agreement as amended by the Amendment, the “Amended Credit Agreement” and the facilities under the Amended Credit Agreement, the “Amended Credit Facilities”), (b) the
Borrower will either (i) issue up to $500,000,000 in aggregate principal amount of senior subordinated notes (the “Notes”) in a public offering or in a Rule 144A or other private placement or (ii) if and to the extent that the
Borrower does not issue $500,000,000 in aggregate principal amount of Notes on or prior to the Closing Date, borrow up to $500,000,000 less the gross cash proceeds from the issuance of Notes issued pursuant to the immediately preceding clause (i) in
aggregate principal amount of senior subordinated bridge loans under a new senior subordinated bridge facility (the “Bridge Facility”) described in Exhibit B to the Commitment Letter to which this Exhibit A is attached, (c) the
Borrower will issue, pursuant to the S-4, declared effective by the Securities and Exchange Commission, BBI Shares to holders of Shares, (d) in connection with the Tender Offer, the Borrower will offer to purchase (the “Debt Tender
Offer”) any and all of the Target’s issued and outstanding 9.625% Senior Subordinated Notes due 2011 (the “Target 2011 Notes”) and will concurrently solicit consents from the holders thereof (the “Consent
Solicitation”) to amend the indenture governing the Target 2011 Notes to eliminate the significant restrictive covenants and certain default provisions contained therein, (e) in connection with the Tender Offer, the Borrower will, or will
cause Acquisition Co. or Target to, purchase all of the Target 2011 Notes validly tendered and not withdrawn in connection with the Debt Tender Offer (the “Debt Tender Purchase”), (f) the Borrower will refinance certain indebtedness
of the Target (such refinancing, together with the Debt Tender Offer, the “Target Debt  
  

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	 	 Refinancing”, and such other Target indebtedness, together with the Target 2011 Notes, the “Target Existing Debt”)
and (g) fees and expenses incurred in connection with the foregoing (including premiums and consent fees paid in connection with the Debt Tender Offer and Consent Solicitation and any “break-up” fees payable in connection with the Target
terminating its existing merger agreement with Movie Gallery, Inc. and entering into an agreement with the Borrower) (the “Transaction Costs”) will be paid. The transactions described in this paragraph, together with the execution,
delivery and performance of the definitive documentation with respect thereto, are collectively referred to herein as the “Transactions”. 

  

	 Co-Lead Arrangers and Joint Bookrunners: 
	 J.P. Morgan Securities Inc. (“JPMorgan”) and Citigroup Global Markets Inc. (“CGMI”).

  

	 Administrative Agent: 
	 JPMorgan Chase Bank, N.A. (“JPMCB” and, in such capacity, the “Agent”). 

  

	 Syndication Agent: 
	 Citicorp North America, Inc. (“CNAI”). 

  

	 Documentation Agent: 
	 Credit Suisse First Boston (“CSFB”), acting through its Cayman Islands Branch. 

  

	 Lenders: 
	 A syndicate of banks, financial institutions and other entities arranged by the Arrangers in consultation with the Borrower (collectively, the
“Lenders”). 

  

	 Facilities: 
	 (A) The Amended Credit Agreement will continue to provide for (i) the existing Tranche A term loan facility (the “Tranche
A Term Facility”), in an aggregate amount of $100,000,000 (the loans thereunder, the “Tranche A Term Loans”), (ii) the existing Tranche B term loan facility (the “Tranche B Term Facility” and together with
the Tranche A Term Facility, the “Existing Term Facilities”), in an aggregate amount of $550,000,000 (the loans thereunder, the “Tranche B Term Loans” and, together with the Tranche A Term Loans and the Tranche C
Term Loans, the “Term Loans”) and (iii) the existing credit facility (the “Revolving Credit Facility”) in an aggregate amount of $500,000,000 (the loans 

  

 3 

	 	 thereunder, the “Revolving Credit Loans”, and such amount, the “Revolving Credit Commitment”).

  

	 	 (B) The Amended Credit Agreement will provide for a new Tranche C term loan facility (the “Tranche C Term
Facility”), in an aggregate amount of $500,000,000 (the loans thereunder, the “Tranche C Term Loans”). 

  

	 Purpose: 
	 The proceeds of the Tranche C Term Loans, together with cash on hand, borrowings under the Revolving Credit Facility, the proceeds of the issuance
of the Notes or the borrowings under the Bridge Facility and the Target’s expected cash balance, will be used by the Borrower (a) on or promptly after the date the Tender Offer is consummated (the “Closing Date”, which
term will mean the date of consummation of the Alternate Transaction, if it is consummated), solely (i) to pay the cash consideration payable to holders of Shares (the “Tender Cash Purchase Price”) acquired pursuant to the
Tender Offer (the “Stock Tender Purchase”) and to pay cash in lieu of fractional BBI Shares otherwise issuable in the Tender Offer, (ii) to finance the Debt Tender Purchase (to the extent available funds of the Target are
insufficient to pay the purchase price payable thereunder) and (iii) to refinance the Target Existing Debt, (b) on the date the Merger is consummated, to pay a portion of the cash consideration (the amount of such consideration, together with the
Tender Cash Purchase Price, the “Cash Purchase Price”) payable in respect of the Shares not acquired in the Tender Offer and to pay cash in lieu of fractional BBI Shares otherwise issuable in the Merger and (c) to pay Transaction
Costs. In the event the Alternative Transaction is consummated, the proceeds of the Tranche C Term Loans, together with cash on hand, borrowings under the Revolving Credit Facility, the proceeds of the issuance of the Notes or the borrowings under
the Bridge Facility and the Target’s expected cash balance, will be used on the Closing Date to pay the cash consideration payable in the Alternative Transaction and cash in lieu of fractional BBI Shares otherwise issuable in the Alternative
Transaction as well as to finance the items 

  

 4 

	 	 described in the immediately preceding clauses (a)(iii) and (c). 

  

	 Availability: 
	 The entire amount of the Tranche C Term Facility will be available on the Closing Date. In the case of the Tender Offer, proceeds of such drawing
required to be applied to the Cash Purchase Price in the Merger will be placed in a cash collateral account pending such application. Amounts borrowed under the Tranche C Term Facility that are repaid or prepaid may not be reborrowed.

  

	 	 The Revolving Credit Facility will continue to remain available in accordance with the terms of the Existing Credit Agreement.

  

	 Interest Rates and Fees: 
	 As set forth on Annex I hereto. 

  

	 Maturity and Amortization: 
	 The Existing Term Facilities will mature and amortize in the manner provided in the Existing Credit Agreement. The Tranche C Term Facility will
mature on August 20, 2011, and will amortize on the same basis as the Tranche B Term Facility. 

  

	 Guarantees: 
	 Consistent with the Existing Credit Facility, all obligations of the Borrower under the Amended Credit Facilities and interest rate protection or
other hedging arrangements entered into with any Lender (or affiliates thereof) will be unconditionally guaranteed (the “Guarantees”) by each existing and each subsequently acquired or organized Domestic Subsidiary (as defined in
the Existing Credit Agreement), including the Target and its subsidiaries. Concurrently with the consummation of the Tender Offer or the Alternative Transaction, as applicable, the Target and each of its domestic subsidiaries will provide a
Guarantee of the Tranche C Term Facility, the Existing Term Facilities and the Revolving Credit Facility and all other obligations under the Amended Credit Agreement. 

  

	 Security: 
	 Consistent with the Existing Credit Facility, the Amended Credit Facilities will be secured by pledges of stock of each existing and each
subsequently acquired or organized Domestic Subsidiary and 

  

 5 

	 	 Significant Foreign Subsidiary (as defined in the Existing Credit Agreement); provided that (i) with respect to Significant Foreign
Subsidiaries such pledge will be limited to 65% of their voting stock (it being understood that, with respect to the Australian Significant Foreign Subsidiary, such pledge will be effected in the same manner as in the Existing Credit Agreement) and
(ii) in the event the Tender Offer is consummated, stock of the Target will be excluded from the Collateral to the extent necessary to comply with margin regulations (collectively the “Collateral”). 

  

	 Mandatory Prepayment: 
	 As set forth in the Existing Credit Agreement; provided that (a) Loans under the Existing Term Facilities and the Tranche C Term Facility
will be prepaid with 100% of the net cash proceeds received from the issuance of indebtedness and (b) the sale, transfer, assignment or other disposition of common stock of the Target will be excluded from the definition of “Prepayment
Event” to the extent necessary to comply with margin regulations. Notwithstanding the foregoing, until all amounts outstanding under the Bridge Facility are repaid, proceeds received from the issuance of indebtedness or equity will first be
applied to repay amounts outstanding under the Bridge Facility prior to the repayment of Term Loans. 

  

	 	 Mandatory prepayments shall be allocated pro rata among the Tranche A Term Facility, the Tranche B Term Facility and the Tranche C Term Facility.
All prepayments allocated to Loans under the Tranche C Term Facility shall be applied ratably to the remaining scheduled principal installments of such Loans. 

  

	 Optional Prepayment: 
	 As set forth in the Existing Credit Agreement. All voluntary prepayments of Tranche C Term Loans effected with the proceeds of a substantially
concurrent issuance or incurrence of indebtedness in connection with a repricing or refinancing of all or any portion of the Tranche C Term Loans shall be accompanied by a prepayment fee of 1.0% of the aggregate amount of any such prepayment made on
or 

  

 6 

	 	 prior to the first anniversary of the Closing Date. 

  

	 Representations and Warranties: 
	 Substantially similar to those provided for in the Existing Credit Agreement and others to be mutually agreed upon (including, without limitation,
those relating to the Acquisition, the Tender Offer, the Merger, the Alternative Transaction and documentation relating thereto). 

  

	 Conditions Precedent to Initial Borrowing: 
	 The availability of the Tranche C Term Facility and the effectiveness of the Amendment shall be conditioned upon (a) all documentation entered
into in connection with the Acquisition, including any merger agreement, being reasonably satisfactory to the Lenders and (b) the satisfaction of conditions substantially similar to those contained in the Existing Credit Agreement and the applicable
conditions set forth in Exhibit C to the Commitment Letter. 

  

	 Affirmative Covenants: 
	 Substantially as set forth in the Existing Credit Agreement, except that the Borrower will be permitted to use the proceeds of Tranche C Term
Loans as set forth under “Purpose” above and, in the event of the consummation of the Tender Offer, the Borrower will be required to use its commercially reasonable efforts to consummate the Merger as soon as possible after the Closing
Date (which covenant will not restrict the pledge or disposition of the common stock of the Target). 

  

	 Negative Covenants: 
	 Substantially as set forth in the Existing Credit Agreement; provided that indebtedness represented by the Tranche C Term Facility, the
Notes and the Bridge Facility will be permitted, and the negative covenants will be modified so as not to apply to the common stock of the Target, to the extent required to comply with margin regulations. 

  

	 Selected Financial Covenants: 
	 Financial covenants as set forth below: 

  

	 	 (a) Fixed Charge Coverage Ratio (as defined in the Existing Credit Agreement) of not less than 1.35 to 1.00 on a rolling four-quarter basis; and

  

	 	 (b) Leverage Ratio (as defined in the Existing 

  

 7 

	 	 Credit Agreement) on the last day of any fiscal quarter ending during any period set forth below not to exceed the ratio set forth opposite such
period: 

  

			
	 Period

	  	Maximum Ratio

	 Through December 30, 2006
	  	3.75 to 1.00
		
	 From December 31, 2006
 through December 30, 2007
	  	3.00 to 1.00
		
	 From December 31, 2007
 through December 30, 2008
	  	2.75 to 1.00
		
	 December 31, 2008
 and thereafter
	  	2.50 to 1.00

  

	 Events of Default: 
	 Substantially as set forth in the Existing Credit Agreement. 

  

	 Voting: 
	 As set forth in the Existing Credit Agreement. 

  

	 Effectiveness of Documentation: 
	 The effectiveness of the Amended Credit Facilities will require (a) the approval of the Required Lenders (as defined in the Existing Credit
Agreement) and (b) the execution of the Amendment by each Lender providing a portion of the Tranche C Term Loan Facility. 

  

	 Cost and Yield Protection: 
	 As set forth in the Existing Credit Agreement. 

  

	 Assignments and Participations: 
	 As set forth in the Existing Credit Agreement. 

  

	 Expenses and Indemnification: 
	 As set forth in the Existing Credit Agreement. 

  

	 Governing Law and Forum: 
	 New York. 

  

	 Counsel to Agent and Arrangers: 
	 Cravath, Swaine & Moore LLP. 

  

 8 

 ANNEX I 
 To Exhibit A 
  

	 Interest Rate Options: 
	 The Tranche C Term Loans shall bear interest at the option of the Borrower at the Adjusted LIBO Rate (as defined in the Existing Credit Agreement)
plus 3.00% per annum or the Alternative Base Rate (as defined in the Existing Credit Agreement) plus 2.00% per annum. 

  
 In connection with the Amendment, (a) the Applicable Margin (as defined in the Existing Credit Agreement) with respect to the Tranche B Term Loans will
be revised to provide that such Loans shall bear interest at the option of the Borrower at the Adjusted LIBO Rate plus 3.00% per annum or the Alternative Base Rate plus 2.00% per annum and (b) the Applicable Margin with respect to the Tranche A Term
Loans and the Revolving Credit Loans will be revised as follows: 

									
	 	  	Leverage
Ratio

	  	Eurodollar
Spread

	 	 	ABR
Spread

	 
	 Category I
	  	32.50x	  	2.50	%	 	1.50	%
	 Category II
	  	<2.50x
32.25x	  	2.25	%	 	1.25	%
	 Category III
	  	<2.25x
32.00x	  	2.00	%	 	1.00	%
	 Category IV
	  	<2.00x
31.50x	  	1.75	%	 	0.75	%
	 Category V
	  	<1.50x
31.00x	  	1.50	%	 	0.50	%
	 Category VI
	  	<1.00x	  	1.25	%	 	0.25	%

  

	 Interest Periods for LIBOR Loans: 
	 As set forth in the Existing Credit Agreement. 

  

	 Interest Payment Dates: 
	 As set forth in the Existing Credit Agreement. 

  

	 Default Rate: 
	 As set forth in the Existing Credit Agreement. 

  

	 Letter of Credit Fees: 
	 As set forth in the Existing Credit Agreement. 

  

 EXHIBIT B 
  
 Project Star 
 $500,000,000 Senior
Subordinated Bridge Loans 
 Summary of Principal Terms and Conditions1 
  

	 Borrower: 
	 The Borrower under the Amended Credit Facilities. 

  

	 Bridge Loans: 
	 Senior Subordinated Bridge Loans (the “Bridge Loans”). At the option of the Lenders, the Bridge Loans may be replaced by, or
originally made in the form of, notes on identical economic terms. 

  

	 Co-Lead Arrangers: 
	 Credit Suisse First Boston (“CSFB”) and Citigroup Global Markets Inc. 

  

	 Administrative Agent: 
	 CSFB. 

  

	 Syndication Agent: 
	 Citicorp North America, Inc. 

  

	 Documentation Agent: 
	 JPMorgan Chase Bank, N.A. 

  

	 Uses of Proceeds: 
	 The proceeds of the Bridge Loans will be used by the Borrower together with the proceeds of the Tranche C Term Facility, cash on hand, borrowings
under the Revolving Credit Facility and the Target’s expected cash balance (a) on or promptly after the date the Tender Offer is consummated (the “Closing Date”, which term will mean the date of consummation of the Alternative
Transaction, if it is consummated) (i) to pay the cash consideration payable to holders of Shares acquired pursuant to the Tender Offer and to pay cash in lieu of fractional BBI Shares otherwise issuable in the Tender Offer, (ii) to finance the Debt
Tender Purchase (to the extent available funds of the Target are insufficient to pay the purchase price payable thereunder) and (iii) to refinance the Target Existing Debt, (b) on the date the Merger is consummated, to pay a portion of the cash
consideration payable in respect of the Shares not acquired in the Tender Offer and to pay cash in lieu of fractional BBI Shares otherwise issuable in the Merger and (c) to pay Transaction Costs. 

  

 1All capitalized terms used but not defined herein have the meanings given to them in the Commitment Letter to which this term
sheet is attached, including Exhibit A thereto. 

	 	 In the event the Alternative Transaction is consummated, the proceeds of the Bridge Loans, together with the proceeds of the Tranche C Term
Facility, cash on hand, borrowings under the Revolving Credit Facility and the Target’s expected cash balance will be used on the Closing Date to pay the cash consideration payable in the Alternative Transaction and cash in lieu of fractional
BBI Shares otherwise issuable in the Alternative Transaction as well as to finance the items described in the immediately preceding clauses (a)(iii) and (c). 

  

	 Principal Amount: 
	 Up to $500,000,000. 

  

	 Subordination: 
	 The Bridge Loans will constitute senior subordinated indebtedness of the Borrower and will be subordinated to the prior payment in full in cash of
all obligations existing under the Amended Credit Facilities. 

  

	 Guarantees: 
	 Each existing and subsequently acquired or organized subsidiary of the Borrower that is a guarantor of the Amended Credit Facilities will
guarantee the Bridge Loans on a senior subordinated basis, with the guarantee of each such guarantor under the Bridge Loans subordinated to all obligations under the Amended Credit Facilities. 

  

	 Interest Rates: 
	 Interest for the first three month period commencing on the Closing Date shall be payable at the higher of (i) the London interbank offered rate
for U.S. dollars (for a three month interest period) (the “LIBO Rate”) plus 650 basis points and (ii) the Treasury Rate (as defined below) plus 507 basis points. “Treasury Rate” means (a) the rate borne by direct
obligations of the United States maturing on the eighth anniversary of the Closing Date or (b) if there are no such obligations, the rate determined by linear interpolation between the rates borne by the two direct obligations of the United States
maturing closest to, but straddling, the eighth anniversary of the Closing Date, in each case as published by the Board of Governors of the Federal Reserve System. Thereafter, interest shall be payable with respect to each subsequent three month
period at the interest rate applicable during the prior three month period plus 50 basis points. 

  

 2 

	 	 Notwithstanding anything to the contrary set forth above, at no time shall the per annum interest rate on the Bridge Loans, Senior Subordinated
Term Loans (as defined below) or the Senior Subordinated Exchange Notes (as defined below) exceed a per annum interest rate equal to the Reference Bond Yield (as defined below) plus 300 basis points (the “Total Cap”). In addition,
that portion, if any, of any interest payment representing a per annum interest rate in excess of the Reference Bond Yield plus 200 basis points (the “Cash Cap”) may be paid by capitalizing such excess portion of interest as
additional Bridge Loans. 

  

	 	 The “Reference Bond Yield” shall equal the average bid “Yield to Worst” for the Borrower’s 9.00% Senior Subordinated
Notes due 2012 as of the third business day prior to the Closing Date, based on bids received by each of the Arrangers, as determined by the Administrative Agent. 

  

	 Interest Payments: 
	 Interest on the Bridge Loans will be payable in cash (except as provided above), quarterly in arrears. 

  

	 Default Rate: 
	 The applicable interest rate plus 2.0%. 

  

	 	 Notwithstanding anything to the contrary set forth herein, in no event shall any cap or limit on the yield or interest rate payable with respect
to the Bridge Loans, Senior Subordinated Term Loans or Senior Subordinated Exchange Notes (including any limit upon the amount of interest payable in cash) affect the payment in cash of any default rate of interest in respect of any Bridge Loans,
Senior Subordinated Term Loans or Senior Subordinated Exchange Notes. 

  

	 Conversion and Maturity: 
	 On the first anniversary of the Closing Date (the “Conversion Date”), any Bridge Loan that has not been previously repaid in full
will be automatically converted into a senior subordinated term loan (each a “Senior Subordinated Term Loan”) due on the date that is eight years after the Closing Date (the “Maturity Date”). At any time on or after
the Conversion Date, at the option of the applicable Lender, the Senior Subordinated Term Loans may be exchanged in whole or in part for senior subordinated exchange notes (the “Senior Subordinated Exchange Notes”) having an equal
principal amount; provided that the Borrower 

  

 3 

	 	 shall not be obligated to issue Senior Subordinated Exchange Notes in any single tranche until it has received requests in respect of such tranche
in an aggregate principal amount of at least $40,000,000. 

  

	 	 The Senior Subordinated Term Loans will be governed by the provisions of the Bridge Loan Documents (as defined below) and will have the same terms
as the Bridge Loans except as expressly set forth on Annex I hereto. The Senior Subordinated Exchange Notes will be issued pursuant to an indenture that will have the terms set forth on Annex II hereto. 

  

	 Mandatory Prepayment: 
	 The Bridge Loans shall be prepaid with, subject to certain agreed exceptions, (i) the net proceeds from the issuance of the Securities (as defined
in the Fee Letter); (ii) the net proceeds from the issuance of any debt or equity securities or other indebtedness (subject to exceptions to be agreed upon) by the Borrower or the Target or any of their respective subsidiaries (with such proceeds
being applied to repay the Bridge Loans prior to the repayment of loans outstanding under the Amended Credit Facilities); and (iii) the net proceeds from any asset sales (to be defined) by the Borrower or the Target or any of their respective
subsidiaries in excess of the amount required to be paid to the Lenders under the Amended Credit Facilities. The Borrower will also be required to prepay the Bridge Loans following the occurrence of a Change of Control (to be defined) at 100% of the
outstanding principal amount thereof. 

  

	 Optional Prepayment: 
	 The Bridge Loans may be prepaid, in whole or in part, at par plus accrued and unpaid interest upon not less than 5 days’ prior written
notice, at the option of the Borrower at any time. 

  

	 Right to Resell Bridge Loans: 
	 Each Lender shall have the absolute and unconditional right to resell or assign the Bridge Loans held by it in compliance with applicable law to
any third party at any time. 

  

	 Representations and Warranties: 
	 The definitive documentation relating to the Bridge Loans (the “Bridge Loan Documents”) will contain representations and
warranties relating to the Borrower and its subsidiaries that are usual and customary for transactions of this nature or reasonably required by the 

  

 4 

	 	 Arrangers for this transaction in particular, including but not limited to those specified under the caption “Representation and
Warranties” in Exhibit A to the Commitment Letter to which this Exhibit B is attached, with such changes as are appropriate in connection with the Bridge Loans. 

  

	 Conditions Precedent to Initial Borrowing: 
	 Substantially the same as set forth in Exhibit A (except as otherwise set forth in Exhibit C) to the Commitment Letter to which this Exhibit B is
attached. 

  

	 Covenants: 
	 The Bridge Loan Documents will contain covenants relating to the Borrower and its subsidiaries that are usual and customary for transactions of
this nature or reasonably required by the Arrangers for this transaction in particular, including but not limited to those specified under the captions “Affirmative Covenants” and “Negative Covenants” in Exhibit A to the
Commitment Letter to which this Exhibit B is attached, with such changes as are appropriate in connection with the Bridge Loans. 

  

	 Event of Default: 
	 Customary for the type of transactions proposed and others to be reasonably specified by the Arrangers relating to the Borrower and its
subsidiaries, including, but not limited to, nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; cross default and cross acceleration; bankruptcy;
material judgments; ERISA events; actual or asserted invalidity of guarantees; material misrepresentations in the Bridge Loan Documents; or material breach under any agreement with the Arrangers or any of their respective affiliates in connection
with any aspect of the Transactions or in the payment of fees to the Arrangers in connection therewith, in each case with grace periods and thresholds to be agreed upon. 

  

	 	 In case an Event of Default shall occur and be continuing, the holders of at least 33-1/3% (a majority when the Arrangers, or their respective
affiliates, hold a majority of the aggregate principal amount of the Bridge Loans) in aggregate principal amount of the Bridge Loans then outstanding, by notice in writing to the Borrower, may declare the principal of, and all accrued interest on,
all Bridge Loans to be due and payable immediately. If a bankruptcy event of the Borrower occurs, the principal of and accrued interest on the Bridge Loans will be immediately due and 

  

 5 

	 	 payable without any notice, declaration or other act on the part of the holders of the Bridge Loans. An acceleration notice may be annulled and
past defaults (except for monetary defaults not yet cured) may be waived by the holders of a majority in aggregate principal amount of the Bridge Loans. 

  

	 Governing Law: 
	 New York. 

  

	 Counsel to the Arrangers: 
	 Cravath, Swaine & Moore LLP. 

  

 6 

 ANNEX I 
 To Exhibit B 
  
 Project Star 
 Senior Subordinated Term Loans 
  

	 Maturity: 
	 The Senior Subordinated Term Loans will mature on the date that is eight years after the Closing Date. 

  

	 Interest Rate: 
	 The Senior Subordinated Term Loans will bear interest at an interest rate per annum (the “Senior Subordinated Term Loan Interest
Rate”) equal to the sum of the Conversion Rate, determined quarterly, plus the Conversion Spread (each determined as set forth below), provided that the Senior Subordinated Term Loan Interest Rate for any such Senior Subordinated
Term Loan shall not at any time exceed a rate equal to the Total Cap. To the extent interest payable on the Senior Subordinated Term Loans on any quarterly interest payment date is at a rate that exceeds the applicable Cash Cap, the Borrower shall
have the option to pay such excess interest by borrowings of additional Senior Subordinated Term Loans with a principal amount equal to such excess portion of interest. Interest shall be payable on the last day of each fiscal quarter of the Borrower
and on the Maturity Date, in each case payable in arrears and computed on the basis of a 360-day year. 

  

	 	 The “Conversion Rate”, as determined on the Conversion Date and at the beginning of each subsequent quarterly interest period,
means the per annum rate equal to the LIBO Rate plus [____]2 basis points.

  

	 	 The “Conversion Spread” will equal, with respect to any Senior Subordinated Term Loan, 0.50% during the three month period
commencing on the Conversion Date for such Senior Subordinated Term Loan and shall increase by 0.50% per annum at the beginning of each subsequent three month period. 

  

 2The spread over the LIBO Rate with respect to any Senior Subordinated Term Loan will be determined so that, on the Conversion Date for such senior Subordinated
Term Loan, the sum of such spread and the LIBO Rate will be equal to the interest rate in effect for the Bridge Loan converted into such Senior Subordinated Term Loan immediately prior to such Conversion Date. 
  

	 Covenants and Events of Default: 
	 Upon and after the Conversion Date, the Covenants and Events of Default applicable to the Senior Subordinated Exchange Notes will also be
applicable to the Senior Subordinated Term Loans. 

  

 2 

 ANNEX II to 
 Exhibit B 
  
 Project Star

 Senior Subordinated Exchange Notes 
  

	 Issue: 
	 The Senior Subordinated Exchange Notes will be issued under an Indenture capable of being qualified under the Trust Indenture Act of 1939, as
amended. 

  

	 Maturity: 
	 The Senior Subordinated Exchange Notes will mature on the date that is eight years after the Closing Date. 

  

	 Interest Rate: 
	 The Senior Subordinated Exchange Notes will bear interest at a fixed rate equal to the interest rate on the Senior Subordinated Term Loan
surrendered in exchange for such Senior Subordinated Exchange Note as of the date of such exchange; provided that any Lender that surrenders Senior Subordinated Term Loans in exchange for Senior Subordinated Exchange Notes may elect to
receive such Senior Subordinated Exchange Notes in the form of multiple tranches of Senior Subordinated Exchange Notes (with such tranches bearing different interest rates and having different maturities, ranking and other terms, all as determined
by the Arrangers), so long as the weighted average interest rate of such tranches does not exceed the weighted average interest rate of such surrendered Senior Subordinated Term Loans; provided that the Borrower shall not be obligated to issue
Senior Subordinated Exchange Notes in any single tranche until it has received requests in respect of such tranche in an aggregate principal amount of at least $40,000,000. 

  

	 Optional Redemption: 
	 Senior Subordinated Exchange Notes will be non-callable until the fourth anniversary of the Closing Date (subject to customary “equity
clawback provisions”). Thereafter, each Senior Subordinated Exchange Note will be callable at par plus accrued interest plus a premium equal to one half of the coupon on such Senior Subordinated Exchange Note, which premium shall decline
ratably on each yearly anniversary of the Closing Date to zero on the date that is two years prior to the maturity of the Senior 

  

	 	 Subordinated Exchange Notes. 

  

	 Repurchase Upon a Change of Control: 
	 The Borrower will be required to repurchase the Senior Subordinated Exchange Notes following the occurrence of a Change of Control (to be defined)
at 101% of the outstanding principal amount thereof. 

  

	 Defeasance Provisions: 
	 Substantially identical to the Borrower’s existing 9.00% senior subordinated note indenture. 

  

	 Modification: 
	 Substantially identical to the Borrower’s existing 9.00% senior subordinated note indenture. 

  

	 Registration Rights: 
	 The Borrower shall file, within 90 days after each issuance of Senior Subordinated Exchange Notes (the date of each such issuance, an
“Issue Date”), and will use commercially reasonable efforts to cause to become effective, as soon thereafter as practicable, an exchange offer registration statement or a shelf registration statement with respect to such Senior
Subordinated Exchange Notes so issued (each such registration statement, a “Registration Statement”). If a Registration Statement is filed, the Borrower will keep such Registration Statement effective and available (subject to
customary exceptions) until it is no longer needed to permit unrestricted resales of the Senior Subordinated Exchange Notes to which such Registration Statement relates; provided that in no event shall the Borrower be required to keep such
Registration Statement effective and available for more than two years after the date on which the interest rate applicable to the Senior Subordinated Term Loans would have been equal to the Total Cap. The Borrower shall cause (i) the Registration
Statement with respect to the Senior Subordinated Exchange Notes issued on the first Issue Date to be declared effective by the date (the “First Effectiveness Date”) that is 120 days from the first Issue Date and (ii) each
Registration Statement with respect to any Senior Subordinated Exchange Note issued subsequent to the first Issue Date to be declared effective by the date (each, a “Subsequent Effectiveness Date” and, together with the First
Effectiveness Date, an “Effectiveness Date”) that is 60 days from the date of issue of such Senior Subordinated Exchange Note, 

  

 2 

	 	 provided that any Subsequent Effectiveness Date shall be extended to 120 days from the date of issue of such Senior Subordinated Exchange
Note to the extent that the Borrower receives written notice that the Registration Statement to which such Senior Subordinated Exchange Note relates will be reviewed by the Securities and Exchange Commission. Any failure on the part of the Borrower
to cause any Registration Statement to be declared effective in accordance with the time periods in the preceding sentence is referred to as a “Registration Default”. In the event of a Registration Default with respect to any Senior
Subordinated Exchange Note, the Borrower will pay liquidated damages in the form of increased interest of 0.50% per annum on the principal amount of such Senior Subordinated Exchange Note to the holder of such Senior Subordinated Exchange Note, to
the extent that such holder is unable to freely transfer such Senior Subordinated Exchange Note, from and including the applicable Effectiveness Date to but excluding the effective date of the Registration Statement with respect to such Senior
Subordinated Exchange Note. On the 90th day after the Effectiveness Date with respect to any such Senior Subordinated Exchange Note, the liquidated damages shall increase by 0.50% per annum and, on each 90-day anniversary of the Effectiveness Date
thereafter, shall increase by 0.50% per annum to a maximum increase in interest of 2.00% per annum (such damages to be payable by issuing additional Senior Subordinated Exchange Notes, if the interest rate thereon exceeds the Cash Cap). The Borrower
will also pay such liquidated damages to the holder of a Senior Subordinated Exchange Note for any period of time (subject to customary exceptions) following the effectiveness of the Registration Statement with respect to such Senior Subordinated
Exchange Note that such Registration Statement is not available for sales thereunder. All accrued liquidated damages will be paid in arrears on each quarterly interest payment date. 

  

	 Covenants: 
	 Substantially identical to the Borrower’s existing 9.00% senior subordinated note indenture. 

  

 3 

	 Events of Default: 
	 Substantially identical to the Borrower’s existing 9.00% senior subordinated note indenture. 

  
  

 4 

 EXHIBIT C 
  
 Blockbuster Inc. 
 Project Star

 Amended Credit Facilities 
 Senior Subordinated Bridge Facility 
  
 Summary
of Additional Conditions Precedent 
  
 Except as otherwise set
forth below, the effectiveness of the Amendment and the initial borrowing under each of the Tranche C Term Facility and the Bridge Facility, as applicable, shall be subject to the following additional conditions precedent: 
  
 1. Either the Tender Offer or the Alternative Transaction shall be
consummated in accordance with applicable law, in accordance in all material respects with the terms described in the Commitment Letter and otherwise on terms and conditions reasonably satisfactory to the Lenders. 
  
 2. In the event the Tender Offer is consummated, each condition to the
consummation thereof set forth in the draft S-4 dated February 2, 2005 delivered to the Agent and the Arrangers shall have been satisfied, and no such condition shall have been waived, modified or amended without the written consent of the Lenders.

  
 3. The S-4 shall have become effective under the Securities
Act of 1933, as amended, and no stop order suspending the effectiveness of the S-4 shall have been issued nor shall there have been proceedings for that purpose initiated or threatened and all BBI Shares issuable pursuant to the Tender Offer, the
Merger and any Alternative Transaction, as applicable, shall have been approved for listing by the New York Stock Exchange and shall have received all necessary securities law authorizations. 
  
 4. Either the Alternative Transaction shall have been consummated or the
Borrower shall have acquired pursuant to the Tender Offer a number of Shares that, on a fully diluted basis, enables the Borrower, acting alone, promptly to effect shareholder approval of the Merger, either pursuant to a merger agreement
satisfactory to the Lenders entered into between the Borrower and the Target and approved by the Target’s board or without the approval of the Target’s board of directors (unless the Target’s board has been replaced by Borrower
nominees), under applicable law and the charter and by-laws of the Target, and the cash per share consideration to be paid for the Shares in connection with the Tender Offer and the Merger or the Alternative Transaction, as applicable, shall not
exceed $11.50 unless the Lenders shall have consented thereto. 
  
 5. The Lenders shall be satisfied that any shareholders’ rights plan, each similar plan or charter or by-law provision and each anti-takeover or similar statute (including, without limitation, all “control transactions”,
“business combinations”, “control-share acquisitions” and similar provisions of the Oregon Business Corporation Act) are and 

  

 
will be inapplicable to the Tender Offer, the Merger and the other Transactions (or, if applicable, the Alternative Transaction). 
  
 6. There shall be no litigation relating to the Acquisition or the other
Transactions or other litigation that could reasonably be expected to materially and adversely affect the benefits to be derived by the Borrower from the Acquisition or otherwise could reasonably be expected to have a material adverse effect as
described in paragraph 17 below. There shall be no governmental or judicial action, actual or threatened, that could reasonably be expected to restrain, prevent or impose materially burdensome conditions on the Acquisition, the other Transactions or
the operation of the Borrower’s and Target’s businesses, or to materially and adversely affect the benefits to be derived by the Borrower from the Acquisition. The Borrower shall have received all required governmental and third party
approvals of the Acquisition and the other the Transactions, and all applicable Hart-Scott-Rodino and other waiting periods shall have expired, in each case without the imposition of materially burdensome conditions on the Acquisition or the other
Transactions or the operation of the Borrower’s and Target’s businesses or which could reasonably be expected to materially and adversely affect the benefits to be derived by the Borrower from the Acquisition. 
  
 7. The consummation of the Transactions, including all borrowings under the
Tranche C Term Facility and the issuance of any BBI Shares, shall not (a) violate any applicable law, statute, rule or regulation (including Regulation U of the Board of Governors of the Federal Reserve System) or (b) conflict with, or result in a
default or event of default or prepayment event under, (i) any indenture or other agreement relating to any material indebtedness of the Borrower, the Target or any of their subsidiaries (other than (A) the Target Existing Debt to be repaid on the
Closing Date and (B) the Target 2011 Notes) or (ii) any other material agreement of the Borrower, Target or any of their subsidiaries, including any agreement with Viacom Inc. 
  
 8. All amounts outstanding under the existing credit agreement of Target shall have been, or shall substantially
simultaneously with the initial borrowing under the New Facilities be, repaid in full and such credit agreement and all liens and security interests granted in connection therewith shall have been terminated. The Borrower shall (or shall have caused
its subsidiaries or Target to) have purchased (or substantially with the initial borrowing under the New Facilities shall purchase) each of the Target 2011 Notes validly tendered (and not withdrawn) pursuant to the Debt Tender Offer at a price
reasonably satisfactory to the Lenders (and, if fewer than all the outstanding Target 2011 Notes shall have been so purchased, the indenture governing the Target 2011 Notes shall have been amended pursuant to the Consent Solicitation), all in
accordance with applicable law and on terms reasonably satisfactory to the Lenders; provided that the Borrower shall (or shall have caused its subsidiaries or Target to) have purchased (or substantially with the initial borrowing under the
New Facilities shall purchase) at least a majority in aggregate principal amount of the outstanding Target 2011 Notes. 
  

 2 

 9. The Target and each of its domestic subsidiaries shall have provided (a) a Guarantee of the
obligations under the Amended Credit Agreement, (b) a senior subordinated guarantee of the Borrower’s Senior Subordinated Notes due 2012 (the “Borrower Existing Notes”) and (c) a senior subordinated guarantee of the Bridge
Facility. The Target and its subsidiaries shall have become Restricted Subsidiaries under the indenture governing the Borrower Existing Notes. 
  
 10. With respect to the Bridge Facility, the Amendment and the Tranche C Term Facility shall have become effective and the Borrower shall have effectuated
the initial Borrowing under the Tranche C Term Facility. With respect to the Tranche C Term Facility, (a) the Amendment shall have become effective and (b) either the Borrower shall have (i) issued the Notes and/or (ii) if and to the extent that the
Borrower does not issue $500,000,000 in aggregate principal amount of Notes, the Bridge Facility shall have become effective and (c) the Borrower shall have received $500,000,000 from the issuance of the Notes and/or borrowings under the Bridge
Facility. 
  
 11. After giving pro forma effect to the
Transactions and the borrowings under the New Facilities, (a) no Default or Event of Default (each term as defined in the Existing Credit Agreement) shall exist and (b) the Borrower shall be in compliance with all financial covenants contained in
the Amended Credit Agreement. Each of the conditions to borrowings under Section 4.02 of the Existing Credit Agreement shall be satisfied as of the Closing Date. 
  
 12. After giving effect to the Transactions, the Borrower and its subsidiaries shall have outstanding no indebtedness or
preferred stock other than (a) the loans and other extensions of credit under the Amended Credit Facilities and the Bridge Facility, (b) the Borrower Existing Notes and the Notes and (c) other limited indebtedness to be agreed upon (including
existing capital lease obligations and other ordinary course indebtedness and, subject to the provisions of paragraph 8 above, the Target 2011 Notes). 
  
 13. The Agent shall have received (a) pro forma consolidated balance sheets of the Borrower, the Target and their respective subsidiaries after giving
effect to the Transactions and (b) consolidated income statement, cash flow and balance sheet projections for the Borrower for each year until the final maturity of the Amended Facilities, after giving effect to the Transactions; and such balance
sheets and projections shall not be materially inconsistent with the projections heretofore furnished to the Lenders. 
  
 14. In the case of the Amendment and Tranche C Term Loans, the Borrower, the Target, and the Target’s domestic subsidiaries shall have executed and
delivered satisfactory definitive financing documentation (including a pledge agreement covering any additional Collateral) and the collateral and guarantee requirement under the Amended Credit Facility shall be satisfied. 
  

 3 

 15. The Agent shall have received certificates from the chief financial officer of the Borrower
certifying that the Borrower and its subsidiaries, on a consolidated basis after giving effect to the Transactions, is solvent. 
  
 16. With respect to the Bridge Facility, (a) the Investment Bank (as defined in the Fee Letter) shall have received, not later than 30 days prior to the
Closing Date, a complete printed preliminary prospectus or preliminary offering memorandum or preliminary private placement memorandum that is suitable for use in a customary road show relating to the offering of securities that contains all
financial statements (including all audited financial statements, all unaudited financial statements (which shall have been reviewed by the independent accountants for the Borrower as provided in Statement on Auditing Standards No. 71 or No. 100, as
applicable) and all appropriate pro forma financial statements prepared in accordance with, or reconciled to, generally accepted accounting principles in the United States and prepared in accordance with Regulation S-X under the Securities Act), and
all other data (including selected financial data) that the Securities and Exchange Commission would require in a registered offering of securities or that would be necessary for the Investment Bank to receive customary “comfort”
(including “negative assurance” comfort) from independent accountants in connection with the offering of securities and (b) upon delivery of such preliminary prospectus, offering memorandum or private placement memorandum, the Borrower
shall have caused senior management personnel reasonably satisfactory to the Investment Bank to have participated in a customary road show. The Borrower shall have given the Investment Bank no less than 25 calendar days written notice of the
scheduled Closing Date and afforded a period of at least 20 calendar days immediately preceding the Closing Date to seek to place the Notes with qualified purchasers thereof. 
  
 17. There not having occurred any event, condition or circumstance that has had or could reasonably be expected to have a
material adverse effect on the business, operations, assets or financial condition of (a) the Borrower and its subsidiaries, taken as a whole, since December 31, 2003 (in each case, other than as disclosed in the Borrower’s SEC filings made
prior to the date hereof or in the Projections furnished to the Arrangers prior to the date hereof) or (b) the Target and its subsidiaries, taken as a whole, since December 31, 2003 (in each case, other than as disclosed in the Target’s SEC
filings made prior to the date hereof or in the Projections furnished to the Arrangers prior to the date hereof). 
  
 18. The Agent under the Tranche C Term Facility and the Agent under the Bridge Facility shall have received all fees and other amounts due and payable on
or prior to the Closing Date, including reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by under the Commitment Letter, the Term Sheets, the
Fee Letter or any definitive documentation relating thereto. All fees in respect of the Amendment shall have been paid. 
  

 4Form of Indemnification Agreement

 Exhibit 10.24 
  
 INDEMNITY AGREEMENT 
  
 This Indemnity Agreement (“Agreement”) is by and between Blockbuster Inc., a Delaware corporation (the “Company”), and
                     (“Indemnitee”), and shall be effective as of December 8, 2004 (the date of its approval by the Board of
Directors of the Company). 
  
 RECITALS 
  
 WHEREAS, highly competent persons have become more reluctant to serve
publicly-held corporations as directors or officers or to serve at the request of publicly-held corporations as directors or officers of another entity or as fiduciaries for employee benefit plans, unless they are provided with adequate protection
through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation or on behalf of the corporation’s benefit plans; and

  
 WHEREAS, the Board of Directors of the Company (the
“Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its
subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being
increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The Amended and Restated Bylaws of the
Company (the “Bylaws”) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”). The Bylaws
and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect
to indemnification; and 
  
 WHEREAS, the uncertainties relating to
such insurance and to indemnification have increased the difficulty of attracting and retaining such persons; and 
  
 WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the
Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future; and 
  

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 WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to
indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and 
  
 WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws
of the Company and any resolutions adopted pursuant thereto, and shall not be deemed to be a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and 
  
 WHEREAS, Indemnitee does not regard the protection available under the Company’s Bylaws and insurance as adequate in
the present circumstances, and may not be willing to serve as an officer, director or other fiduciary without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Company on the condition that he be so indemnified; 
  
 NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

  
 Section 1. Services to the Company. Indemnitee agrees
to serve [as a [director][officer] of the Company] [at the request of the Company, as a [director] [officer] of another entity] [fiduciary for an employee benefit plan]]. Subject to any other legal or contractual obligation binding upon Indemnitee,
Indemnitee may at any time and for any reason resign from such position, whereupon the Company shall have no obligation under this Agreement to continue Indemnitee in such position. Nothing in this Agreement shall be deemed to create an employment
contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee, nor shall the existence of this Agreement modify any of the terms under which Indemnitee may (if applicable) be employed, by the Company (or any of its
subsidiaries or any Enterprise). Except as may be otherwise provided, as applicable, (a) in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), (b) in any formal severance policies duly
adopted by the Board, or, (c) under the Company’s Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), the Company’s Bylaws, or the DGCL, Indemnitee acknowledges and agrees that, if
Indemnitee is an employee of the Company, such employment is “at will” and Indemnitee may be discharged at any time for any reason, with or without cause. The foregoing notwithstanding, this Agreement shall continue in full force and
effect after Indemnitee has ceased to serve [as a [director][officer] of the Company][at the request of the Company, as a [[director] [officer] of another entity] [fiduciary for an employee benefit plan]] for the period specified in Section 15
below. 
  
 Section 2. Definitions. As used in this
Agreement: 
  

 -2- 

 (a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of
this Agreement of any of the following events: 
  
         i. Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing
fifteen percent (15%) or more of the combined voting power of the Company’s then outstanding securities; 
  
         ii. Change in Board of Directors. During any period of two (2) consecutive years (not including any period
prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a
transaction described in Sections 2(a)(i), 2(a)(iii) or 2(a)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a least a majority of the members of the Board; 
  
         iii. Corporate Transactions.
The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the surviving entity outstanding immediately after
such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; 
  
         iv. Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company
or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; and 
  
         v. Other Events. There occurs any other event of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting
requirement. 
  
 For purposes of this Section 2(a), the following
terms shall have the following meanings: 
  
 (A)
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 (B) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company, (ii) 
  

 -3- 

 any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and
(iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 
  
 (C) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange
Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity. 
  
 (b) “Corporate Status” describes the status of a person who is or
was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of
the Company. 
  
 (c) “Disinterested Director” means a
director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee. 
  
 (d) “Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee
benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary. 
  
 (e) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 13(d) only, Expenses incurred by Indemnitee in connection with the
interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee. 
  
 (f) “Independent Counsel” means a law
firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this Agreement, the Company’s Bylaws or the DGCL, or of other indemnitees 

  

 -4- 

 
under similar indemnification agreements, the Company’s Bylaws or the DGCL), or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify
such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. 
  
 (g) The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, in which
Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting as director or
officer of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other
enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement; except one initiated by an
Indemnitee to enforce his rights under this Agreement. 
  
 (h)
Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the
Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to
the best interests of the Company” as referred to in this Agreement. 
  
 Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all
Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful. 
  

 -5- 

 Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this
Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to
which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification. 
  
 Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to
the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in
part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or
matter. If the Indemnitee is not wholly successful in such Proceeding, the Company also shall indemnify Indemnitee against all Expenses reasonably incurred in connection with a claim, issue or matter related to any claim, issue, or matter on which
the Indemnitee was successful. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter. 
  
 Section 6. Indemnification For
Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which
Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. 
  
 Section 7. Additional Indemnification. 
  
 (a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if
Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, 

  

 -6- 

 
judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding. 
  
 (b) For purposes of Section 7(a), the meaning of the phrase “to the
fullest extent permitted by applicable law” shall include, but not be limited to: 
  
         i. to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision
of any amendment to or replacement of the DGCL, and 
  
         ii. to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may
indemnify its officers, directors and agents. 
  
 Section 8.
Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee: 
  
 (a) for which payment has actually been made to or on behalf of Indemnitee
under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or 
  
 (b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of
the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(a) hereof), or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other
incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act; or 
  
 (c) except as provided in Section 13(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding)
initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of
any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law. 
  
 Section 9. Advances of Expenses. In accordance with (i) the pre-existing requirement of Section 5.02 of Article V of
the Bylaws of the Company and (ii) the permissive provisions of Section 5.07 of the Bylaws of the Company, and notwithstanding any provision of this Agreement to the contrary, the Company shall advance, to the extent not prohibited by law, the
Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such 

  

 -7- 

 
advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be
made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all reasonable
Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify for advances upon the execution
and delivery to the Company of this Agreement which shall constitute an undertaking providing that the Indemnitee undertakes to repay the advance to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the
Company. This Section 9 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 8. 
  
 Section 10. Procedure for Notification and Defense of Claim. 
  
 (a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek
indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding
and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such action, suit or proceeding. The omission by Indemnitee to notify the Company hereunder
will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this
Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. 
  
 (b) The Company will be entitled to participate in the Proceeding at its own expense. If requested by Indemnitee, the
Company shall also defend Indemnitee, at Company’s sole cost and expense, with experienced legal counsel reasonably acceptable to Indemnitee, in connection with any matter with respect to which Indemnitee seeks indemnification or advancement of
Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. 
  
 Section 11. Procedure Upon Application for Indemnification. 
  
 (a) Upon written request by Indemnitee for indemnification pursuant to Section 10(a), a determination, if required by
applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee; or (ii) if a Change in Control shall not 

  

 -8- 

 
have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested
Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written
opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be
made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons
or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or
Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne solely by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. 
  
 (b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 11(a) hereof, the
Independent Counsel shall be selected as provided in this Section 11(b). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee
advising him of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of
Directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may
be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may
be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel
unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 10(a)
hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have
been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person 

  

 -9- 

 
selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person
so appointed shall act as Independent Counsel under Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 13(a) of this Agreement, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing). 
  
 Section 12. Presumptions and Effect of Certain Proceedings. 
  
 (a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity
making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of
this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that
presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct. 
  
 (b) Subject to Section 13(e), if the person, persons or entity empowered or selected under Section 11 of this Agreement to determine whether Indemnitee is
entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by
law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty
(30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section 12(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 11(a) of this Agreement and if (A) within fifteen
(15) days after receipt by the Company of the request for such determination the Board of Directors has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy five
(75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making 

  

 -10- 

 
such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii)
if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 11(a) of this Agreement. 
  
 (c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful. 

 
 (d) Reliance as Safe Harbor. For purposes of any determination of
good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of
the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert
selected with the reasonable care by the Enterprise. The provisions of this Section 12(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of
conduct set forth in this Agreement. 
  
 (e) Actions of
Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. 

 
 Section 13. Remedies of Indemnitee. 
  
 (a) Subject to Section 13(e), in the event that (i) a determination is made
pursuant to Section 11 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 11(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 or the
last sentence of Section 11(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 7 of this Agreement is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification, (vi) the Company fails to defend Indemnitee as provided in Section 10(b) of this Agreement within ten (10) after Indemnitee’s request for such defense, or (vii) in the
event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any 

  

 -11- 

 
litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee, in whole or in part, the benefits provided or intended to be
provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of his entitlement to such indemnification, advancement of Expenses, or defense. Alternatively, Indemnitee, at his option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 13(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to
enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration. 
  
 (b) In the event that a determination shall have been made pursuant to Section 11(a) of this Agreement that Indemnitee is
not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 13 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced
by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 13 the Company shall have the burden of proving Indemnitee is not entitled to indemnification, advancement of Expenses, or defense,
as the case may be. 
  
 (c) If a determination shall have been
made pursuant to Section 11(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law. 
  
 (d) The Company shall,
to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are not valid, binding and enforceable
and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that the Indemnitee not be required to incur legal fees or other Expenses
associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the
Indemnitee hereunder. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited
by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification, advance of Expenses, or defense from the Company under this Agreement, the Company’s Bylaws, or the
DGCL, or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether 

  

 -12- 

 
Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be. 
  
 (e) Notwithstanding anything in this Agreement to the contrary, no
determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding. 
  
 Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation. 
  
 (a) The rights of indemnification and, if applicable, defense, and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company’s Certificate of Incorporation, the Company’s Bylaws, any agreement, a vote of stockholders or a
resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee
in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification, defense or advancement of Expenses than would be afforded
currently under the Company’s By-laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to
be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy. 
  
 (b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents
of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance
with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company
has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies, and to provide any defense of Indemnitee required
thereunder. 
  
 (c) In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, 

  

 -13- 

 
including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. 
  
 (d) The Company shall not be liable under this Agreement to make any payment
of amounts otherwise indemnifiable hereunder (or for which advancement is provided) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. 

 
 (e) The Company’s obligation to indemnify, defend or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise
shall be reduced by any amount Indemnitee has actually received as indemnification, defense or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other
enterprise. 
  
 Section 15. Duration of Agreement. This
Agreement shall continue until and terminate upon the later of: (a) 10 years after the date that Indemnitee shall have ceased to serve (i) as a director or officer of the Company, (ii) at the request of the Company, as a director or officer of
another entity or (iii) at the request of the Company, as a fiduciary for an employee benefit plan or (b) 1 year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification, defense
or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 13 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the
benefit of Indemnitee and his heirs, executors and administrators. 
  
 Section 16. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the
intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. 
  
 Section 17. Enforcement. 
  
 (a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to serve [as a [director][officer] of the Company] [, at the request of the 

  

 -14- 

 
Company, as a [[director] [officer] of another entity] [fiduciary for an employee benefit plan]], and the Company acknowledges that Indemnitee is relying
upon this Agreement in serving [as a [director] [officer] of the Company] [, at the request of the Company, as a [[director] [officer] of another entity] [as a fiduciary for an employee benefit plan]]. 
  
 (b) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a
supplement to and in furtherance of the Certificate of Incorporation of the Company, the Bylaws of the Company, applicable law and any indemnification agreements (if any) previously entered into between the Company and the Indemnitee in connection
with the Company’s separation from Viacom, Inc. and its affiliates, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder. 
  
 Section 18. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding
unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

  
 Section 19. Notice by Indemnitee. Indemnitee agrees
promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of
Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise. 
  
 Section 20. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified
or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed
or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received: 
  
 (a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

  
 (b) If to the Company to: 
  
 Blockbuster Inc. 
 1201 Elm Street, Suite 2100 
 Dallas, Texas 
 75270 
  

 -15- 

 Attention: General Counsel 
  
 or to any other address as may have been furnished to Indemnitee by the Company. 
  
 Section 21. Contribution. To the fullest extent permissible under
applicable law, if the indemnification or defense provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying and defending Indemnitee, shall contribute to the amount incurred by
Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents (other than Indemnitee)) and Indemnitee in connection with such event(s) and/or transaction(s). 
  
 Section 22. Applicable Law and Consent to Jurisdiction. This Agreement
and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by
Indemnitee pursuant to Section 13(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably Corporation
Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of Newcastle, Delaware 19808 as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding
against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive,
and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum. 
  
 Section 23. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall
for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of
this Agreement. 
  
 Section 24. Construction. In the event
of any ambiguity or inconsistency contained in this Agreement, the parties hereto acknowledge and agree that this 

  

 -16- 

 
Agreement, as between the Company and Indemnitee, shall be construed against the Company, as the party who caused this Agreement to be prepared, given the
facts and circumstances that gave rise to this Agreement, as more fully set forth above in the recitals to this Agreement 
  
 Section 25. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of
the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 -17- 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of February
    , 2005. 
  

					
	 BLOCKBUSTER INC.

		
	 By:
	 	  

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 
	
	 INDEMNITEE

	
	  

	 Name:
	 	 
		
	 Address:
	 	 
	
	  

	
	  

  

 -18-

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