August 20, 2007
CapitalSource Finance LLC
0000 Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: Special Investments Group - Portfolio Manager
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxx Van der Xxxx
Xxxxxxxx Ingersoll & Rooney P.C.
One Oxford Centre 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx Van der Veer
Phone: (000) 000-0000
Fax: (000) 000-0000
Re: Second Lien Credit and Guaranty Agreement dated as of March 8, 2007 (the
"Second Lien Credit Agreement") among Movie Gallery, Inc. (the "Borrower"),
Certain Subsidiaries of the Borrower, as Guarantors, Various Lenders, Xxxxxxx
Sachs Credit Partners L.P., as Lead Arranger and Syndication Agent, and
CapitalSource Finance LLC, as Administrative Agent and Collateral Agent
Ladies and Gentlemen:
This letter is being provided as the Borrower's notice of a PIK Election
pursuant to Section 2.5(f) of the Second Lien Credit Agreement. Unless
otherwise defined herein, capitalized terms used herein shall have the
meanings ascribed to them in the Second Lien Credit Agreement. The Borrower
hereby gives notice to the Administrative Agent that it is making a PIK
Election with respect to the entire principal amount of the Loans for the
Interest Period commencing 15 days from today.
MOVIE GALLERY, INC.
By:___________________________
Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
