THIRD AMENDMENT TO LOAN AND
SECURITY AGREEMENT
THIS THIRD AMENDMENT TO LOAN AND SECURITY
AGREEMENT (this “ Amendment ”), dated as of
July 30, 2009, is entered into between WACHOVIA CAPITAL
FINANCE CORPORATION (WESTERN), a California corporation, as Agent
and Lender (in such capacities, “ Lender ”),
IMAGE ENTERTAINMENT, INC., a Delaware corporation (“
Borrower ”), EGAMI MEDIA, INC., a Delaware corporation
(“ Egami ”), IMAGE ENTERTAINMENT (UK), INC., a
Delaware corporation (“ Image (UK) ” and
together with Egami, collectively, “ Guarantors
”).
A. Borrower, Guarantors, Home Vision
Entertainment, Inc., a Delaware corporation (which has since been
merged with and into Borrower), and Lender have previously entered
into that certain Loan and Security Agreement dated May 4,
2007 as amended by that certain First Amendment to Loan and
Security Agreement dated as of April 28 2008, and as amended
by that certain Second Amendment to Loan and Security Agreement
dated as of June 23, 2009 (as amended, the “ Loan
Agreement ”), pursuant to which Lender has made certain
loans and financial accommodations available to Borrower. Terms
used herein without definition shall have the meanings ascribed to
them in the Loan Agreement.
B. Borrower, Guarantors and Lender now wish
to amend the Loan Agreement on the terms and conditions set forth
herein.
C. Borrower and Guarantors are entering
into this Amendment with the understanding and agreement that,
except as specifically provided herein, none of Lender’s
rights or remedies as set forth in the Loan Agreement is being
waived or modified by the terms of this Amendment.
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants herein contained, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as
follows:
1. Consent . Pursuant to the terms
of Section 9.9(g) of the Loan Agreement, Borrowers may not
amend, modify, alter or change the terms of the Indebtedness owing
to Portside Growth and Opportunity Fund (“ Portside
”). For purposes of Section 9.9(g) of the Loan
Agreement, Lender hereby consents to: (i) Borrower entering
into that that certain Second Amendment to Exchange Agreement,
dated as of July 30, 2009, by and between Borrower and
Portside; and (ii) Borrower executing that certain Amended and
Restated Senior Secured Convertible Note, dated as of July 30,
2009, in favor of Portside; in each case, in the form attached
hereto as Exhibit A.
2. Effectiveness of this Amendment
. Lender must have received the following items before this
Amendment is effective.
(a) Amendment . This Amendment,
fully executed in a sufficient number of counterparts for
distribution to all parties.
(b) Amendment Fee . An amendment
fee in the amount of $50,000 which shall be due and payable by
Borrower, and fully earned by Lender, on the date of this
Amendment.
(c) Representations and Warranties
. The representations and warranties set forth herein and in the
Loan Agreement must be true and correct.
(d) Other Required Documentation.
All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been
delivered or executed or recorded and shall be in form and
substance satisfactory to Lender.
3. Representations and Warranties .
Borrower and Guarantors represent and warrant as
follows:
(a) Authority . Each of Borrower
and Guarantors has the requisite corporate power and authority to
execute and deliver this Am
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