EXHIBIT 10.2
AMENDMENT NUMBER THREE TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), is entered into as of August 28, 2001, between FOOTHILL CAPITAL
CORPORATION, a California corporation ("Foothill"), with a place of business
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and IMAGE ENTERTAINMENT, INC., a California corporation ("Borrower"),
with its chief executive office located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with reference to the following facts:
WHEREAS, Borrower has requested that Foothill amend that certain Loan and
Security Agreement dated as of December 28, 1998, between Foothill and Borrower
(the "Agreement") as set forth herein; and
WHEREAS, Foothill is willing to so amend the Agreement in accordance with
the terms and conditions hereof.
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises contained herein, Foothill and Borrower hereby agree as follows:
SECTION 1. DEFINED TERMS.
Capitalized terms used herein and otherwise defined herein shall have
the meanings ascribed in them in the Agreement.
SECTION 2. AMENDMENTS TO THE AGREEMENT.
(a) Section 3.3 of the Agreement is hereby amended and restated in its
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entirety as follows:
3.3 Term; Automatic Renewal. This Agreement shall become effective on
the execution and delivery hereof by Borrower and Foothill and shall continue in
full force and effect for a term ending on the date (the "Renewal Date") that is
3 years from the Closing Date and automatically shall be renewed for successive
1 year periods thereafter, unless sooner terminated pursuant to the terms
hereof. Either party may terminate this Agreement effective on the Renewal Date
or on any 1 year anniversary of the Renewal Date by giving the other party at
least 60 days prior written notice by registered or certified mail, return
receipt requested. The foregoing notwithstanding, Foothill shall have the right
to terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants to Foothill that (a) the
execution, delivery and performance of this Amendment and of the Agreement, as
amended by this Amendment, are within its corporate powers, have been duly
authorized by all necessary corporate action, and are not in contravention of
any law, rule, or regulation, or any order, judgment, decree, writ, injunction,
or award of any arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any contract or undertaking to which it is a party
or by which any of its properties may be bound or affected, and (b) this
Amendment and the Agreement, as amended by this Amendment, constitute Borrower's
legal, valid, and binding obligation, enforceable against Borrower in accordance
with its terms.
SECTION 4. CONDITIONS PRECEDENT TO AMENDMENT.
The satisfaction of each of the following, on or before August 28,
2001, unless waived or deferred by Foothill in its sole discretion, shall
constitute conditions precedent to the effectiveness of this Amendment:
(a) The representations and warranties in this Amendment, the
Agreement as amended by this Amendment, and the other Loan Documents shall be
true and correct in all in all respects on and as of the date hereof, as though
made on such date (except to the extent that such representations and warranties
relate solely to an earlier
date);
(b) Other than Borrower's failure to maintain minimum availability
under the Agreement in excess of $3,000,000, no Event of Default or event which
with the giving of notice or passage of time would constitute an Event of
Default shall have occurred and be continuing on the date hereof, nor shall
result from from the consummation of the transactions contemplated herein;
(c) No injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
governmental authority against Borrower or Foothill; and,
(d) All other documents, agreements, instruments, 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 Foothill and its counsel.
(e) The due execution and delivery of this Amendment by the each party
hereto.
SECTION 5. FURTHER ASSURANCES.
Borrower shall execute and deliver all agreements, documents, and
instruments, in form and substance satisfactory to Foothill, and take all
actions as Foothill may reasonably request from time to time fully to consummate
the transactions contemplated under this Amendment and the Agreement, as amended
by this Amendment.
SECTION 6. MISCELLANEOUS.
(a) Upon the effectiveness of this Amendment, each reference in the
Agreement to "this Agreement," "hereunder," "herein," "hereof" or words of like
import referring to the Agreement shall mean and refer to the Agreement as
amended by this Amendment.
(b) Upon the effectiveness of this Amendment, each reference in the
Loan Documents to the "Loan Agreement," "thereunder," "therein," "thereof" or
words of like import referring to the Agreement shall mean and refer to the
Agreement as amended by this Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the laws of the State of California.
(d) This Amendment can only be amended by a writing signed by both
Foothill and Borrower.
(e) This Amendment may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Amendment. Delivery of an
executed counterpart of this Amendment by telefacsimile shall be equally as
effective as delivery of an originally executed counterpart of this Amendment.
Any party delivering an executed counterpart of this Amendment by telefacsimile
also shall deliver an original executed counterpart of this Amendment but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment.
(f) This Amendment reflects the entire understanding of the parties
with respect to the transactions contemplated hereby and shall not be
contradicted or qualified by any other agreement, oral or written, before the
date hereof.
IN WITNESS WHEREOF, the parties hereto have cause this Amendment to be
duly executed as of the date first written above.
IMAGE ENTERTAINMENT, INC.,
a California corporation
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
IN WITNESS WHEREOF, the parties hereto have cause this Amendment to be
duly executed as of the date first written above.
IMAGE ENTERTAINMENT, INC.,
a California corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President